I recently tabled a motion in the Senate calling on the federal government to create a pilot project that would test a basic income in Canada. Basic income, also known as a guaranteed annual income, shows great promise in dealing with an increasing poverty crisis in this nation.
Canadians face immense challenges. Many families struggle to pay rent; they can’t afford their children’s school supplies or school trips. Many rely on food banks just to feed their families.
One in seven Canadians live in poverty. That’s over five million people – including over one million children. And an estimated 150,000 to 300,000 people are homeless. Last year, close to 900,000 Canadians used food banks every month, with over one-third of those children.
Increasing income and wealth inequality is changing the core of our society. The Conference Board of Canada graded Canada at “C” for inequality, ranking us 12th out of 17 countries studied.
But why a basic income?
What we have done for far too long is simply not working. Even with all the social supports in place, the resulting income is often only enough to maintain a family in poverty. At their worst, existing policies and programs actually entrap people in poverty.
A basic income would work as a tax credit administered similar to the Guaranteed Income Supplement for seniors. If someone is below the poverty line, they would be topped up to a point above that line.
This wouldn’t result in the good life but it would ensure that all Canadians have an income that covers the basic necessities: clothing, food and decent shelter. It would provide a foundation that low-income people could build on for a better life.
This idea is supported by a majority of Canadians, according to a 2013 Environics poll. And people across the political spectrum support a basic income.
Conservative economist Milton Friedman was a proponent of basic income, as is former Conservative Sen. Hugh Segal. On the other end, Green Party Leader Elizabeth May, Alberta NDP Finance Minister Joe Ceci, and Quebec Liberal Employment and Social Solidarity Minister François Blais support the idea.
Communities across the country are coming on board. Many provincial, territorial and municipal leaders that have publicly supported basic income or pilot projects to that end. As well, organizations like the Canadian Medical Association are calling for action on inequality.
A basic income is a simpler and more transparent approach to fighting poverty than our current patchwork of social programs. It would extend benefits to those who are not covered by social assistance programs, such as the working poor. And introducing a basic income could have a stimulus effect by quickly injecting money into the economy.
In the 1970s, Canada piloted a basic income program known as ‘Mincome,’ primarily in the town of Dauphin, Man. Research done by Evelyn Forget from the University of Manitoba found that as a result “hospital visits dropped 8.5 percent. Fewer people went to the hospital with work-related injuries and there were fewer emergency room visits from car accidents and domestic abuse. There were also far fewer mental health visits.”
What about employment? Research shows that only new mothers and teenagers worked less with a basic income. Mothers stayed home with their babies longer. Youth worked less but spent more time in school and graduated in higher numbers. Overall, labour force attachment remained strong.
Canada could see a great upsurge in the living conditions of our most vulnerable if a basic income were employed, and we could realize a decrease in costs.
Poverty costs us all – as much as $30 billion a year by one estimate – by slowing the economy, forcing up our tax bills, increasing healthcare costs and crime.
The now closed National Council of Welfare put the poverty gap in Canada at $12 billion in 2011. That is what it would take to get everyone up to the poverty line.
We need a pilot project that can provide new and robust Canadian data, that can determine how such a system would function today, and that would make clear the benefits and costs.
A basic income is a new path that shows great potential. Let’s study this approach and get the evidence. If proven, we not only end poverty but we spend smarter, more efficiently and effectively.
Art Eggleton is a Canadian senator and former mayor of Toronto and member of Parliament.