Basic income pilot programs advocated in time for Canada's 150th birthday


By Doreen Nicoll 

Trying to support a family while holding down several part-time jobs. Accepting short-term contracts without benefits. Working full time but earning wages so low your annual income falls below the poverty line. Trying to survive month to month on inadequate unemployment insurance or social assistance payments. This is what life is like for many Canadians. Unfortunately, the numbers of financially disadvantaged Canadians continues to grow as precarious employment becomes the new normal.

Financial insecurity is at the root of many personal and societal problems. Individuals and families are liable to experience inadequate housing, greater food insecurity, poorer health, significantly greater health-care costs, bouts of depression and suicidal thoughts arising from hopelessness. While society is challenged by increasing homelessness, hunger, health-care costs, demands on judicial and correctional services. Yet, the solution to situational and chronic poverty is quite simple — Canadians need a Guaranteed Livable Income (GLI).

The low income cut-off in 2011 for a single person living in a large urban centre was $23,289 before taxes. For two persons, it was $29,004. A family of four was $43,292. According to Statistics Canada, one in 10 Canadians live in poverty. That’s 3.2 million Canadians, including 634,000 children.

In Ontario, a couple where both spouses are disabled receives $1,153 a month, or $13,836 annually, to live on from the Ontario Disabilities Support Program. In Alberta a single mother of one on disability receives $1,168 per month or $14,016 annually. This amount is topped up by child tax credits and GST rebates raising their annual income to $20,521. The father of the child may be required to make child support payments, but the province claws back support payments up to the amount equivalent to the mother’s disability payments. In other words, the child most likely does not see a penny of her court-ordered child support.

At $11.25 per hour, Ontario has the highest minimum wage rate for provinces. Working full time for 35 hours per week for 52 weeks per year at minimum wage provides an annual income of $20,475 before taxes. Anyone earning this amount lives 12 per cent below the low-income cut-off. Two-income earners fair better because $40,950 is 41 per cent above the cut-off. If both parents make minimum wage a family of four has an annual income of $40,950 and lives 5 per cent below the low-income cut-off.

New Brunswick has the lowest minimum wage at $10.30. Single persons are trying to survive on 20 per cent less than the low-income cut-off while a family of four is 13 per cent below this floor. At $12.50 per hour the Northwest Territories has the highest minimum wage in the country. But, even that leaves a single person 2 per cent below the floor and a family of four only 5 per cent above the above the cut-off. Although this doesn’t sound so bad, the territories are unique due to extenuating factors, like exorbitant prices for housing and food that need to be taken into account.

Dauphin, Manitoba was home to a unique experiment from 1974 to 1979. The Mincome Pilot, or Manitoba Basic Guaranteed Annual Income Experiment, provided 1,300 families with annual incomes ranging from 3,800 to 5,800 for three years. The provincial government under Ed Schreyer (NDP) along with the federal government under Pierre Elliot Trudeau (Liberal) funded the program. By all accounts it was a great success.

Concerns that a guaranteed income would be a disincentive to work were proven wrong. Participation in the workforce continued as usual with two exceptions; new mothers stayed out of the workforce longer to care for their children, and teenagers who would normally have quit school to help support their families stayed in school.

Other win-win situations emerged from this study. People were more likely to wait for a job that was a good fit rather than taking the first position available which could mean being underemployed or accepting dangerous work. Meanwhile hospital visits declined 8.5 per cent; there were fewer work-related injuries, mental health issues, and incidents of domestic abuse. If ever a policy was a “real no brainer,” it’s the GLI.

The Negative Income Tax (NIT) model tops up the income of those falling below a designated minimum-income floor. While the Universal Basic Income (UBI) model gives every citizen a fixed, non-taxable payment above which any additional income is taxed. Both models rely on people filing yearly income tax returns — even if they have no income. The provincial welfare system is the only program that would become redundant.

Former Conservative Senator Hugh Segal has been championing the NIT model. According to Segal, if each person were given $12,000 to $15,000 per year, the annual cost would be about $30 billion or less than 10 per cent of the federal budget. That is a pittance compared to the $86 billion poverty costs Canadians annually.

Ideally, the GLI would be implemented in conjunction with a federal living wage policy to ensure full-time employees earn annual incomes that fall significantly above the poverty line. In addition, every level of government should mandate that government employees, and contracted individuals, be paid a living wage.

The shift in labour markets toward precarious employment is here to stay. The GLI means an individual or family has access to adequate funds for housing and food as required. Over four million adults and children are living with food insecurity. GLI could lower this number by 1.2 million individuals. This in turn would result in significant savings within the health-care system alone.

When families have enough income to take care of their basic needs cost savings are also realized in the legal and correctional systems. According to the National Crime Prevention Centre, “Most prisoners suffer from social disadvantages. In 1998, 37 per cent of inmates had an education below the grade 10 level (19 per cent for other adult Canadians); 52 per cent were unemployed at the time of their offence (versus 10 per cent unemployment for other adult Canadians).”

Dr. Andrew Pinto, a Public Health and Preventive Medicine specialist and family physician at St. Michael’s Hospital in Toronto, is part of a team of doctors working to improve the health and lives of people living with poverty. He teamed up with Segal to give clinical support to the benefits of a GLI. Together Segal and Pinto want to improve the public’s knowledge and understanding of GLI and show that it’s a logical extension of the current health-care system that will ultimately lead to significant cost savings in health care, education and the justice system.

Segal and Pinto would like to see 10 pilot projects introduced across the country in time to celebrate Canada’s 150 birthday in 2017. In fact, Calgary mayor Naheed Nenshi, Edmonton mayor Don Iveson and several groups on Prince Edward Island are interested in hosting pilot programs.

This election is the perfect time to raise the issue of a GLI. Recipients would finally have the financial means to support themselves, and their families, in a manner that preserves their dignity. Segal refers to GLI as, “Quantitative easing for the common person, as opposed to big banks and car companies, which provides liquidity when required.”

GLI is an achievable goal that needs to be part of the discussion this election. Be sure to ask the candidates in your riding if they support a Guaranteed Living Income that’s provided universally and unconditionally to ensure every Canadian can live with the health, dignity, respect and self-determination that they deserve.

— This article originally ran on Rabble here.