The time for basic income is now: An overhaul to Canada’s social net is long overdue

Canada once again may be missing a historic opportunity. The COVID-19 pandemic is a flashpoint, a situation that begs for a basic income to address the cracks through which millions of Canadians continue to fall through. And yes, protect those workers who have recently lost their employment and household income.

On March 27, the Trudeau government announced that Canadians would be receiving a basic income of $2,000 to help them deal with the COVID-19 crisis — well, not in so many words, of course. The government’s response is actually called the Canada Emergency Response Benefit (CERB), but it may as well be called the Emergency Basic Income.

Socio-economic sinkholes have formed across the country from the erosion of Canada’s social and health security programs, and traditional employment. Globalization and neo-liberal policies have favoured corporate and business priorities over human and community well-being. Income inequality has been rising for decades, precarious work has become the job offering of choice of more employers. Jobs with benefits and pensions grow fewer and fewer. Individuals and families alike are exhaustively treading water, struggling to simply stay afloat.

Employment insurance is only available to 38 per cent of the workforce today, so it too is an antiquated program, created for an economy and workforce that no longer exist. It has run its course. Our provincial welfare programs — Ontario Works and Ontario Disability Support Program created by the Mike Harris government in the 1990s — are but unemployment and poverty traps laden with layers of bureaucracy, confusion and very little humanity. They legislate people to poverty and make it near impossible to escape.

Now we’re confronted by a pandemic that is causing havoc and emotional strain to our health-care system, our economy and our society at large. Lockdowns, business closures, layoffs, social distancing, the cancellation of arts, sports, cultural events, libraries and educational institutions — our economy is choking and could be in shambles by the time COVID-19 has moved on. And yes, we will recover, but there will be another pandemic or world catastrophe with which to contend. The COVID-19 pandemic has only exacerbated the need for a national basic income.

CERB will be delivered by Service Canada and the Canada Revenue Agency, and will provide temporary income support for workers who have ceased working due to COVID-19 with $500 a week for up to 16 weeks. The government has targeted April 6 as the date when it can start accepting applications. This temporary basic income program will run for four months, and if needed, Parliament will be recalled before or during summer months to debate and vote on an extension. The federal government’s package is worth $107 billion, including income supports, wage subsidies and tax deferrals.

And it seems everyone is looking for financial help of some kind from the federal government in this time of COVID-19 crisis — workers, small businesses, charities, even big corporations. But one very large group of vulnerable Canadians has been pushed to the sidelines and in some cases completely ignored — those living in poverty and chained to the welfare traps, the homeless and some post-secondary students. These people are not eligible for the emergency rescue package. They have far fewer resources and opportunities than they should.

Ontario’s basic income pilot, short-circuited prematurely by the Doug Ford government, saw 4,000 people from three very different communities — Hamilton/Brant, Thunder Bay and Lindsay — receive income up to $1,417 a month ($17,000/year for a single adult), approximately 75 per cent of the poverty line, less 50 per cent of any earned income over the three-year program. The early results were presented in a recent report by McMaster University researchers were what many anticipated, suggesting a similar trajectory as the landmark basic income program in Manitoba in the 1970s — MINCOME. McMaster’s research revealed substantial change in the lives of the pilot participants — improved general and mental health, better food options, improved living conditions, opportunities to enrol in post-secondary education and training, even start a business. For people who spend years on short-term contracts with no job security, no pension or benefits, basic income provides an element of economic security. It bridges the gaps between short-term contracts, essentially providing an insurance policy against things that can happen to anybody — including the onslaught of a pandemic.

During Manitoba’s MINCOME program’s five-year duration, hospital visits dropped by 8.5 per cent with an estimated savings in health care of more than $4.6 billion. There were fewer incidents of work-related injuries, and fewer emergency room visits from motor vehicle accidents and domestic violence. Additionally, there were reductions in the rates of psychiatric hospitalization and the number of mental illness-related consultations with health professionals.

The Senate Committee on Social Affairs reported in 2009, “the system that is intended to lift people out of poverty is substantially broken, often entraps people in poverty, and needs an overhaul.” More recently, in February, Liberal Sen. Kim Pate asked the Canadian Senate to support the implementation of a guaranteed basic income in Canada. Former Progressive Conservative Sen. Hugh Segal is the architect of Ontario’s basic income pilot launched by Premier Kathleen Wynne’s Liberal government. Canada’s Green party also supports basic income as do members of the federal NDP and Liberal parties.

In the US, political leaders from all stars and stripes have expressed their support for a common dream of basic income, from President Richard Nixon, Martin Luther King Jr. to Democrat presidential candidates Andrew Yang and Bernie Sanders. Newark, Milwaukee and Stockton, California are among the cities currently testing versions of a basic income. In October 2019, Stockton officials released preliminary findings of their program, which indicated participants were spending the money on necessities like food, utility bills and gasoline. Proponents of universal basic income cite these early findings as proof people wouldn’t spend the money on frivolous items. Chicago is also considering a universal basic income program.

Basic Income Canada Network (BICN), recently published a report advocating for a basic income of $22,000 for a single person and $31,113 for a couple (divided between individuals). It works similar to existing child benefits and the Ontario pilot. Benefits are reduced gradually as other income rises, in this case using a modest 40 per cent reduction rate. Families with the lowest income would see their disposable income increase by more than 350 per cent, which is especially important for singles under 65 who have very little income security now. It would ensure that all Canadians have an income that covers the basic necessities — food, clothing and decent shelter. It would provide a floor, a foundation that low income people could then build upon for a better life. Poverty is almost eliminated, at zero in some cases.

In 1989, the House of Commons voted to end child poverty by the year 2000. Yet here we are today where one in seven people or 4.8 million Canadians live in poverty, including 1.2 million children under 18 who live in low-income households, a figure that has stayed virtually unchanged for a decade. Another 150,000 to 300,000 Canadians are homeless. Hamilton’s poverty rate has declined to 14.5 per cent for adults 18 to 64 years, but it remains high for children under 17 years (21 per cent) and even higher for children five years and under (23 per cent). In 2019, close to 900,000 Canadians used food banks every month, and over one third of those were children.

Opponents of basic income often point to its financial cost and potential work disincentive, despite the lack of any empirical evidence. According to the Canada Without Poverty 2019 annual report, poverty is estimated to cost $72 billion to $86 billion a year when factoring health care, criminal justice and lost productivity. Poverty’s drain on health care alone may now approach $40 billion per year, and yet the cost to lift every person living below poverty in Canada is estimated to be only $32 billion per year.

It is Canadians between the ages of 18 and 64, our workforce and the people who hold the fabric of society together, who are not protected from economic and societal disasters like the one we are experiencing today.

A 2016 Angus Reid survey on basic income reported 67 per cent of respondents expressed support for a guaranteed income of $30,000 a year per adult. But it seems the political will in this country is lacking despite national support. We have the research and facts. We’ve had successful pilots. We’ve seen the same positive outcomes in countries around the world who have basic income programs. We know our Child Tax Benefit, a basic income for families with children, has removed hundreds of thousands of children from poverty.

Canada has the systems in place to implement a basic income program, to get money to people without too much change — the Canada Revenue Agency. A basic income would work as a tax credit administered through the taxation system similar to the GIS. If someone earns less or has less than the poverty line, they would simply be topped up to a point above the poverty line.

The time for BI has come. Governments around the world are implementing measures to address the financial fallout of the COVID-19 crisis, which essentially amount to emergency basic income. In fact, Spain has recently declared it will be instituting a basic income that will be a “permanent instrument” that “lasts forever.” Canada has missed the opportunity to be the first in the world to announce a permanent basic income, but we can settle for second in this case. In fact, we’re calling on the Canadian federal government to make Canada the first nation in North America to lead and declare that it is instituting a permanent basic income. There is no returning to the world we knew only a month ago. As Gwynne Dyer pointed out in a recent column, “The current emergency may be fostering the rise of ideas previously seen as too radical to contemplate, but no one is saying universal basic income, yet.” Well, Spain is, and Basic Income Hamilton is, and we think you should too.

Jeffrey C. Martin and Lisa Alfano are Co-chairs, Basic Income Hamilton.

John Mills is with Ontario Basic Income Network and Basic Income Canada Network.

Article was published by The Hamilton Spectator on 7 April 2020.