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Human capital policy has come to be seen as something of a panacea: acting both as a necessary input for modern growth and an effective tool for redistribution. Canada has moved strongly in the direction of linking redistribution and human capital investment. In this paper, I investigate the empirical evidence and theoretical arguments behind the claim that increasing skills investment opportunities and tying transfers to human capital investments while decreasing traditional income support will ultimately lead to a more equal, more just society. Whether this is true, of course, will depend on the notion of justice one adopts. One of my goals in this paper is to examine the implications of the kind of policy path Canada is following under different notions of fairness. I conclude that both empirical evidence and fairness considerations indicate that human capital policy does not make good redistributive policy. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the relationship between the substantial changes in tax and transfer programs and the movements in after-tax income inequality over the 1980s and 1990s. We show that in the 1980s, tax and transfer programs became more redistributive, offsetting substantial increases in market income inequality. In the 1990s, the tax and transfer system stopped undoing the increases in market income inequality, leading after-tax income inequality to rise. Even so, tax and transfer programs were more redistributive in 2000 than in the 1980s. Much of the changes occurred at the provincial level, with social assistance payments first increasing (in the late 1980s) then decreasing (in the late 1990s) and with surtaxes on high-income earners being first imposed and subsequently removed. [ABSTRACT FROM AUTHOR]