Ontario is one step closer to a guaranteed minimum income plan
Countries around the world, from Finland to Namibia to the Netherlands and Kenya, are trying something so simple that it just might work: Handing out cash, no strings attached, to its citizens. They’re all testing out versions of universal basic income. And now Canada is joining the club.
Guaranteed minimum income, universal basic income, ‘mincome’ — they’re all variations of the same program. It provides individuals with an annual stipend to either supplant or complement existing social programs. It can be universal, given to everyone no matter their income, or targeted toward low-income Canadians, providing recognition for previously unpaid work like child-rearing or artistic endeavours.
It is, in a way, a negative income tax. And it won’t come cheap. Providing just low income people with a basic income could cost roughly $35 billion, while expanding the program to every Canadian could cost as much as $500 billion.
It’s not one size fits all, however. A plan for an Ontario pilot project would give members of three communities — one in the north, one in the south, and at one First Nations community — a no-strings-attached cheque for $1,320 per month over three years. PEI is planning on a similar endeavour.
A consultation, wrapped up this week, suggests Ontario should boost that number to $1,689.
The 35,000 respondents were divided on whether the pilot should give recipients the suggested 75 percent of the low-income measurement — a metric that is similar, but not the same, as the poverty line — or 100 percent of that total, nearly $23,000. Many agreed that the pilot should lift people out of poverty and complement existing social assistance programs. And they agreed with a recommendation that disabled recipients of Ontario’s basic income should receive an extra $500 per month.
Guy Caron, a contender for the leadership of the New Democratic Party, would, if he makes it to 24 Sussex Drive, implement a taxable basic income supplement that would essentially “top-up” the income of Canada’s working poor, who make up 70 percent of impoverished Canadians.
As work becomes increasingly precarious, political support is growing. The government of PEI endorsed the idea, and the federal Liberal Party has adopted a resolution supporting the policy — although the government has declined to pursue a federal initiative.
Manitoba’s mincome experiment
Politicians have toyed with the idea dating back to the 1930s. One pilot project got off the ground in the 1970s, which saw 1,000 residents of Dauphin, Manitoba receive a basic income under a provincial NDP and Pierre Trudeau’s Liberals federally.
Single recipients were given $3,386 per year, while families of two received $4,907 — adjusted for inflation, that’s $16,000 and $20,000, respectively.
University of Manitoba professor Evelyn Forget published an analysis of the program in 2011 and found it resulted in an 8.5 percent drop in hospital visits, fewer work-related injuries, and fewer psychiatric hospitalizations and mental-health consultations.
Forget’s research also indicates that new mothers stayed out of the labour force longer to look after their newborns in an era when maternity benefits were poor. Some teenagers also wound up finishing high school rather than entering the workforce, which they might have done if their families weren’t receiving mincome.
But economic uncertainty and a shifting political climate ended all that in the late 70s. Oil shocks and stagflation saw Conservative parties elected both federally and provincially, Forget writes, bringing “mincome to an end without implementation of the anticipated universal basic income proposal.”
The case for basic income in 2017
It’s no coincidence that the basic income idea has come roaring back now.
Finance Minister Bill Morneau has, on multiple occasions, told young Canadians to get used to working precariously — going from contract to contract, working part-time or in other unstable conditions that keeps people from accessing aspects of the social safety net.
While numbers from February appear to buck that trend — when 105,000 full-time jobs were added and 90,000 part-time jobs were axed — around 40 percent of Canadians still work part-time while half of all workers in Toronto and Hamilton have precarious jobs.
Ontario’s proposal follows in the footsteps of a pilot project implemented in the mid-70s that “radically” reduced poverty for recipients who were over the age of 65, according to Hugh Segal, a former senator and an author of the Ontario recommendations.
Caron’s plan is meant to help Canadians’ reach the low-income cut-off — an income threshold calculated with the consumer price index where, if a family falls below it, they are likely to spend much more of their income on basic needs.
“You give people unconditional cash transfers to help support their life, their kids do better in school; the adults are less stressed.”
Sheila Regehr, Chair of Basic Income Canada Network, said that Canada’s social safety net was built at a time when everyone was expected to have a “decent job.” But with the rise of precarious work and as automation is poised to give millions Canadian human jobs to Canadian robots — one estimate found that up to 7.5 million Canadian jobs are vulnerable over the next 15 years — she said we need to do a lot more to reorganize society and address these “early, canary-in-the-coal-mine warning signals.”
“Our governments, of all stripes lately, have been competing for ‘middle class’ votes. Sadly, [they have] really neglected a lot of the concerns of low-income people and people who are really bearing the brunt of the changing economy.”
Basic income might make those conditions more bearable. The Canadian Centre for Policy Alternatives found that basic income could protect people from precarious employment, give value to unpaid work — often done by women — and act as a replacement for full employment while shifting bargaining power from capital to labour.
National interest “unprecedented”
Apart from the provincial pilot projects, Jim Mulvale, the dean of the University of Manitoba’s faculty of social work, called federal support for basic income “unprecedented.”
It’s unusual for such a broad policy initiative to get buy-in from members of every party.
The Green Party has supported a version of basic income for years and over 10,000 Canadians signed a petition in support of the project late last year. They join Segal, who sat in the Senate as a Conservative, the Liberal Party membership who voted for the initiative, and the legions of New Democrats who have endorsed the idea.
And yet, Jean-Yves Duclos, federal Minister for Children, Families, and Social Development, declined to launch the idea on the federal level, arguing that the provinces are best-fit to administer a basic income. “The federal government is ready to help the provinces by sharing data we own through Stats Can,” Mathieu Filion, Duclos’ communications director, told Vice News.
But some dispute whether Canada’s provincial governments can actually take on basic income. Regehr said that “anybody who has a remote grasp of the tax structure in Canada would understand that Ontario and Quebec might be the only provinces who could conceive of trying to go it alone on something like this.
“Based on our history and evidence of the programs that we’ve run that have worked, they are run out of the federal government with provincial and territorial cooperation. They all run that way — the seniors programs, the child benefit programs.”
Others say the costs are too prohibitive for it to be universal. The University of Toronto’s Mowat Centre found that it would cost around $500-billion to provide a universal basic income of $15,000 to every Canadian — nearly doubling all federal expenditures.
The Mowat Centre report recommends that guaranteed annual income shouldn’t replace other social assistance programs.
Mulvale thinks that, in the short to medium term, Canada should use a targeted basic income where only low-income folks would receive the benefit — the lower your income, the higher the benefit would be. He said that, when only low-income working people receive the guaranteed income, estimates put the cost at around $35-billion.
Regehr said Canada already has the framework in place for a basic income program in cash transfer programs including the Guaranteed Income Supplement for seniors and the Canada child benefit.
“You give people unconditional cash transfers to help support their life, their kids do better in school; the adults are less stressed; you have a buffer in case you lose your job,” she said. “You’re not on easy-street, you’re not having a good time. But you don’t risk losing everything.”
Cover: Shannon Stapleton/REUTERS