Basic income: The future of Canadian trials and implementations

This was the final project for a class I took in the summer of 2019, to propose a policy reform agenda that would improve the lives and well-being of Canadians.

Politics. Affect. You. Those we elect to power determine the circumstances of our income, our community, our environment, culture, laws, housing, access to food and water, and absolutely, positively, our health.

1 in 6 Canadians don’t know where their next meal is coming from. 1 in 5 can’t afford prescribed medication. 1 in 7 live in poverty, and all these are much higher for racialized and Indigenous people. And children. The opioid and suicide epidemics decimating our young people, have political solutions. The present and historical genocide and systemic injustices endured and resisted by the Indigenous peoples of this land, have political solutions. Politics is life and death for millions of Canadians, every single day.

Transcript with citations

Honourable ministers Morneau, Duclos, Taylor and Bains, thank you so much for joining me via webinar to hear this proposal. And you too, Justin. Please address any questions you might have via twitter.

Canada’s social safety net is frayed to the breaking point. Our income security structures are crumbling. Canadian income inequality remains rampant (Statistics Canada, 2018; Broadbent Institute, 2019; Campaign 2000, 2017), social crises like homelessness and food insecurity are rapidly growing (Gaetz, Dej, Richter & Redman, 2016; PROOF, 2016), and good jobs are disappearing fast (OECD, 2011; Yalnizyan, 2013; IPSOS, 2016). We need to change our approach to income security in this country.

Who administers and funds the social safety net? Is funding adequate? What benefits or services are provided?

Social assistance involves all levels of government. The federal government provides the universal child care benefit, the Canada pension plan, old age security and employment insurance. Provincial governments provide disability support and healthcare, and both provincial and municipal governments play roles in housing supports.

What is the problem being addressed or solved?

We could just make our social assistance programs more generous, broader and more effective. We could make programs less means-tested and more universal. Or we simply guarantee a minimum level of income for anyone who falls below it.

Funding is not only grossly inadequate to lift people out of poverty, but grotesquely mismanaged and poorly distributed. Our means-tested social assistance structures treat people like children and keep them entrenched in cycles of poverty, where they are punished for attempts to build a better life like finding a job, and systematically smacked back down (Martin, 2017a; Kennelly, 2017; Culbert & Sherlock, 2018).

Who is left out?

Our current income security structures, policies and programs provide too little financial support, leave tens of thousands to fall through the cracks, disincentivize people from improving their situations, reproduce inequalities across generations, and balance the heaviest burdens of our society on the backs of the most vulnerable (Meili, 2012; Forget, 2017; Hick, 2014; Campaign 2000, 2017; Knoll & Meili, 2015).

If you start going to work on social assistance, you can lose everything (E.g., Hick, 2014, Martin, 2016, Forget, 2017). If you decide to go back to school, you can lose everything (E.g., Hick, 2014, Martin, 2016, Forget, 2017). You can be punished for having too many people in the house, or a spouse, or not being able to fill out dozens of arcane forms every month (E.g., Hick, 2014, Martin, 2016, Forget, 2017).

“Social assistance programs that have been designed actually not just to help people who are not working, but discourage people from working because they claw back dollar for dollar any assistance that people are getting when they go to work, create really perverse incentives around people engaging with the labour market at all” (Martin, 2016).

What social inequalities or social injustice are being reinforced and solved? Which are not? What gaps would it fill? Who was missing before, who will now be included?

This is the gradient of poverty and health. People in Canada who live in the poorest neighbourhoods live about 13 years less than people in the richest neighbourhoods (Meili, 2012; Tjepkema, Wilkins & Long, 2003; Raphael, 2002; DeLuca & Kanaroglou, 2015; Marmot, 2015), and it’s even greater when you factor-in disability.

“The gradient means we’ve got to make common cause between not poor, and poor. If there’s a seventeen-year gap in disability-free life expectancy it means the average person has eight fewer years of healthy life expectancy” (Marmot, 2016).

Is money life and death? There’s so many other problems; how could just giving people money make a real difference?

“In the real world, the social determinants of health pile on, on top of the same people, and interact and intermingle with each other in really important ways, so that poverty leads to poor school readiness, leads to lower educational attainment, which limits people’s job prospects, which are further narrowed by racism, which leads to stress and chronic illness, which makes it hard to keep a full-time job, which leads to more poverty.” (2:40-3:10). (Martin, 2016).

Poverty isn’t the inability to live large. it’s not big houses, fast cars and fancy clothes. Poverty is the inability to live a healthy life at all, or at least to have any decent kind of shot at it (Marmot, 2015; Marmot, 2016; Meili, 2012; Meili & Martin, 2016; Martin, 2017a; Forget, 2019; Knoll & Meili, 2015; Knoll & Martin, 2017). The opposite of poverty isn’t wealth; it’s justice.

But poverty and inequality aren’t just morally impermissible, deeply unjust and contrary to everything we claim to stand for as Canadians – they’re extremely expensive. Our unnecessary spending on socioeconomic costs like healthcare and law enforcement are ineffective, counterproductive and unnecessary (Ivanova, 2011; Laurie, 2008; Plante & Sharp, 2014; Knoll, Plante & Partridge, 2017). The avoidable, annual costs of poverty have been calculated at up to 9.2 billion in British Columbia (Ivanova, 2011), up to 3.8 billion in Saskatchewan (Plante & Sharp, 2014), and up to 13.1 billion in Ontario (Laurie, 2008).

That works out to about one thousand dollars per year, per person for the Ontario study, two thousand dollars per year, per person for the British Columbia study, and just under four thousand dollars per year, per person for the Saskatchewan study. No national studies have been yet completed, but scaling up to the population of Canada, that gives us an average cost of poverty of more than 90 billion dollars per year. That’s a lot of wasted resources.

So we urgently need to address the crises of poverty and inequality, and we know social assistance is ineffective, wasteful and thoroughly problematic. But there’s an alternative: a universal basic income. The concept is simple.

If someone earns less money than a certain level that we decide no human should fall below, we make up the difference so that they do. A guaranteed basic income keeps you at that level even if you lose your job, or get a job, or get sick, or go back to school. It removes the paternalism of social assistance and replaces it with stability, predictability and real security.

People will just spend that money on drugs and beer. They can’t be trusted.

How did… this is a closed webinar. Anyway it turns out-

“It turns out actually when you support low-income people in getting up out of poverty, they will use that money as you would wish that they would, and there’s no need to spend extra money trying to police how they do it” (Knoll, Forget, Yalnizyan & Martin, 2017).

People will stop working if they don’t need to scrape and claw for every penny. And we need them constantly desperate, or this capitalism thing literally won’t work.

“It not only creates an incentive for people to work, and is much less judgmental and invasive into peoples’ life choices in terms of how they spend their money” (Knoll et al, 2017).

Whatever. It sounds like like communism. What even is the ideology behind basic income?

The ideology of a universal basic income guarantee depends entirely on its implementation. Neoliberal conservatives like Richard Nixon and Milton Friedman advocated for it. Radical progressives like Carole Pateman and Erik Olin Wright. Centrist private business magnates like Elon Musk, Mark Zuckerberg and Pierre Omidyar have advocated for it. The ideology comes into play, in whether a basic income is sufficient to lift people out of poverty and thrive as equal citizens, or squash social assistance into a singular, manageable allowance for base subsistence (Mendleson, 2016; Paikin & Segal, 2018).

And basic income is not just for the poor. With the rapidly changing nature of work in Canada toward greater precarity and less security (E.g., Standing, 2018; Paikin & Forget, 2019), about half of Canadians living paycheck-to-paycheck (IPSOS, 2016), and more uncertainty than ever, this is a solution for everyone. Otherwise what we’ll see is-

“What we’ll see is greater inequality, we’ll see a declining middle class, more and more people slipping into low income categories, and less able to offer their children and their families the kinds of opportunities that we’ve taken for granted for a number of years.” (Knoll et al, 2017).

What is the history of the policy? Have there been changes? Are there examples of it happening elsewhere?

Dr. Evelyn Forget has become almost synonymous with basic income in the Canadian context, from her research showing the social and health benefits of a pilot program that ran for five years in Manitoba. A limited version has also been tried in Finland, which Forget spoke on just a few months ago.

“One of the key findings was that people who received a basic income engaged in more pro-social behaviour. That is, they had greater trust in one another. They were more likely to trust government, to trust the organizations and the institutions in society. I think that allowing people to participate fully in society encourages them to become productive and healthful neighbours. I think we all want to become part of the same community that we live in” (Palkin & Forget, 2019).

The most striking fact from Forget’s findings in the Canadian context?

“We saw an 8.5% decrease in hospitalizations, kids stayed in school longer, there were fewer outpatient visits particularly around issues relating to mental health in the healthcare system, people had children later and they had fewer children. I mean if we discovered a drug that reduced hospitalizations by 8.5% we would be putting it in the water.” (Martin, 2016).

I still say it would make people lazy, stop working, and bring the whole system down. People can’t be trusted.

“Universal basic income test runs done in Canada in the 70s showed that about 1% of the recipients stopped working, mostly to take care of their kids. On average, people reduced their working hours by less than ten per cent. The extra time was used to achieve goals like going back to school, or looking for better jobs.” (Kurzgesagt, 2017).

More recently, the Ontario government ran a pilot project in the cities of Hamilton, Thunder Bay and Lindsay, where people had their income topped up to cut offs at about $17,000 for a single person and $24,000 for a couple. Since social assistance programs were rolled into the program it was not enough to raise people out of the low-income measure or low-income-cut-off levels, but it was enough to lift people to the market-basket-measure line, and out of definitional poverty (Hick, 2014). (CITE OTHERS?!) It was cancelled this spring however, one year early.

“People signed up expecting it would last a full three years” (The National, 2019). “It wasn’t long enough to open that door and actually get halfway there. It’s like you’re almost there, and it was taken away” (Jeganathan, 2018).

Aside from the stress and hardship of those who had the rug pulled out from under them, there were severe problems with the pilot project that undermined it’s ability to provide us with the sort of useful data that could have informed whether or not to roll out the policy nation-wide.

First off, it was too short. We don’t know how factors like work disincentives could play out the long-term (Forget, 2018; Mason, 2018; Hamilton & Mulvale, 2019),  a downside which already began to decrease during the last years of the Manitoba experiment in the 70s (Forget, 2011; Forget, 2018).

Secondly, the Ontario government wasn’t able to access social assistance records because of privacy barriers (Mason, 2018), and didn’t even have tax records until after participants were signed on and enrolled.  The actual enrolment process was pretty slapdash too, sending out letters to solicit participation (Mason, 2018).

All this amounted to an incredible self-selection bias, which even with the best quality data, which we absolutely did not get, would have been almost impossible to use (Mason, 2018).

Despite it’s short run and problematic implementation, the Ontario basic income pilot still demonstrated a lot of promise for this type of policy, and the human benefits we saw in the pilot’s run have been staggering. Folks struggling with homelessness got off the street. Folks suffering chronic income insecurity found a little stability, and were able to take control of their lives (E.g., Hamilton & Mulvale, 2019; Monsebraaten, 2018). The cold got warm, the hungry got fed, and the test communities got a lot healthier (E.g., Hamilton & Mulvale, 2019; Monsebraaten, 2018). It’s a call to action for another try – a real try.

What exactly are you proposing?; Who would you consult?

I’m not an economist. For a policy this important, a program this complex and a project this big, we should take advantage of every possible resource. Dr. Forget is an obvious choice, as is the prolific author and co-founder of the Basic Income Earth Network, Guy Standing. We’d want to bring in experts on poverty, inequality and the monumentous impacts they have on health and well-being, like Michael Marmot, Danielle Martin, Richard Wilkinson, Joseph Stiglitz and Armine Yalnizyan. Basic income experts who can take lead roles to navigate political obstacles will also be vital, like former conservative senator Hugh Segal, and NDP leadership candidate Guy Caron.

What I’m proposing is a sufficiently prepared, adequately sized, intelligently conducted pilot program to determine how cost-effective and beneficial a nation-wide universal basic income would be to our society. This is exactly what many experts proposed in 2016, as advice for the Ontario pilot (E.g., Forget, Marando, Surman & Urban, 2016; Laidley, 2016; Khanna, 2016).

We need a lot of really good data. I would tentatively suggest starting with about a quarter-million people, geographically diversified, with each set of cities randomly assigned to be either the control group or the test group. It doesn’t have to be these cities, but they should have similar population sizes, demographics and other factors we can control for. We’d want to adjust the parameters like the amount of income support given, to see the impacts of raising people above the market-basket poverty line, above the low-income line, and beyond.

Similar or smaller tests could be run concurrently or subsequently to flesh out this information better. After the initial run, we could expand the trial to larger cities to see if the data trends scale up.

What resources or capital would be required? Who would be responsible for rolling it out? How exactly do you expect to pay for this?

If we decide to raise people up to the low-income measure, we’d be looking at about 475 million for the first three years, gross (E.g., Parliamentary Budget Officer, 2018). Rolling in social assistance makes it about 250 million (E.g., Parliamentary Budget Officer, 2018). Roll out is simple once we determine the participants: checks in the mail. If we can learn how to eradicate poverty for just 250 million dollars, it will be one of the greatest bargains humanity has ever struck.

Factoring in the costs of poverty we’re already paying, we may very well discover that the pilot turns out to be cost-neutral (Ivanova, 2011; Laurie, 2008; Plante & Sharp, 2014; Knoll, Plante & Partridge, 2017), that giving everyone enough money to live on actually costs us nothing at all, or gives us a return back. This has some mind blowing implications for a national roll-out.

“The parliamentary budget officer said it would probably be on a national basis, to eradicate poverty, about 43 billion a year on the national account. The national account is in excess of 350 billion dollars a year, it’s less than 10%” (Paikin & Segal, 2018).

But that’s the gross cost (Parliamentary Budget Officer, 2018). Once a basic income brings people up out of poverty, social assistance programs would no longer apply. We spend more than 23 billion annually on social assistance (Paikin & Segal, 2018).

Twenty or so billion dollars. The Canada Child Benefit already costs us about that much. The Canada Pension Plan already costs that much. Tax expenditures for the rich cost us 122 billion dollars each year (Parliamentary Budget Officer, 2019).

“If we can afford 122 billion dollars for income assistance for people like you and me, can we afford 23 billion dollars to provide income assistance for lower income people?” (Paikin & Forget, 2019).

And again, that’s the cost before we see the return on investment from reducing or even eliminating poverty in Canada.

“You’re spending a whole lot of money treating the consequences of poverty. If we can take some of that money and allocate it to families up front so they can lead reasonable lives, I think you’d see the returns downstream” (Paikin & Forget, 2019).

In case you don’t remember from earlier – that could very well be up to 90 billion dollars a year! (Ivanova, 2011; Laurie, 2008; Plante & Sharp, 2014; Knoll, Plante & Partridge, 2017).

Why am I doing this?

I was born into the care system. But I had the obscene luck to be adopted into a wonderfully supportive family and community that wrapped around me and lifted me up. In my life and work I’ve met many others born into the care system who were not so lucky. Lives full of extraordinary hardship, of addictions, homelessness, incarceration and worse. Folks who really never had a decent shot at a healthy life. In what world is that okay? In what Canada should a child’s chance at life be up to a dice toss, when it doesn’t have to be? Not my Canada. Basic income isn’t a long shot. It’s our moonshot. And we should take it.

 

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