Although many governments have used the ideology of economic rationalism to justify restructuring the welfare state, dismantling Canadian social programs has been motivated by far more than concern about high public debt. Federal/provincial politics and especially the fear that the Quebec separatist movement will shatter the Canadian federation have been primary motives in federal reform. Yet rather than focusing on the political necessity for reform, Canadian governments have used 'objective' economic arguments to gain acceptance for their policies. By using the discourse of economic rationalism and through careful timing of reforms, they have been able to make unpopular changes to the decision-making structures and programs. Although these reforms may now appear to be minor, it is argued that further restructuring will be hastened by several structural changes to the state and to funding arrangements. Underlying this discussion is the argument that basing a social policy almost exclusively on economic rationalism is unwise and dangerous from the point of view of social justice and equity.