While the recession may technically draw to a close in the third quarter, its reverberations will be felt for some time. Most notably, recovery will be sluggish relative to that in the wake of past recessions. Unemployment will continue to rise into 2010 as re-hiring proceeds slowly and more workers enter the labour force. A slower pace of trend economic growth also means greater stress on government budgets. The pace of government spending will have to be lowered in the near future or there will be ongoing structural deficits. These are indeed substantial challenges, but such stresses may nonetheless shape a “transformative” response. Here, a “transformative response” is defined as an evolution of social programs so as to better respond to present circumstances and to better support economic performance in the longer-term.