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Speech on Basic Income Motion

Honourable Senators I rise today to speak on my motion on a basic income pilot project.

That the Senate encourage the federal government, after appropriate consultations, to sponsor along with one or more of the provinces/territories a pilot project, and any complementary studies,  to evaluate the cost and impact of implementing a national basic income program based on a negative income tax for the purpose of helping Canadians to escape poverty.

As we know and I have mentioned in this chamber a number of times we have immense challenges in our country when it comes to poverty. We have families that struggle to pay the rent. We have children that can’t afford school supplies or go on school trips. We also have many that can’t afford to put good food on the table and have to rely on donations at the Food Bank just to feed their families.

Honourable Senators, according to Statistics Canada 1 in 7 Canadians live in poverty. That’s over 5 million people.  With over 1 million being children. 

There are over four million people in need of decent affordable housing according to Canada Mortgage and Housing Corporation (CMHC).  And there are an estimated 150,000 to 300,000 people that are homeless according to the Canadian Alliance to End Homelessness.

In 2015, according to Food Banks Canada almost 900, 000 Canadians used food banks every month, with over 1/3 of those being children. Despite this 1 in 7 children go to school hungry every day according the Breakfast Club of Canada.

When it comes to health the Canadian Medical Association declared that “poverty makes us sick.” In their 2013 report they showed that over half “…of health outcomes can be attributed to the social determinants of health.” Such social determinants as poverty, housing and homelessness. 

We also have increasing income and wealth inequality that is changing the very nature of our society. The Conference Board of Canada gives Canada a “C” grade for inequality, ranking us 12th out of 17 countries studied. 

Between 1980 and 2005, earnings for those in the top income group increased by over 16 %. Not so for the bottom income group as they saw their income fall by 20%.  For the middle, their earnings were basically stagnant.

The top 20% of Canadians now account for 70 % of all total wealth.

This is staggering. For many people - our fellow citizens - every day is a battle.  Dreams are diminished, hopes are dashed.  I remember the words of social activist Michael Creek who experienced poverty, when he said: “Poverty steals from your soul leaving you with little or no hope.  It robs you of all that can be good in life.  It leaves you isolated, lonely and hungry.  Every day is a struggle.”

So make no mistake - poverty continues to rage in our communities.  It continues to have a stranglehold on Canadian families, and particularly hard hit are single men, especially since the 2008 recession, aboriginal people, visible minorities, lone mothers and the disabled. 

I remind Honourable Senators of the Senate Social Affairs Committee report entitled In From the Margins: A Call to Action on Poverty, Housing and Homelessness that was unanimously adopted by the Senate in 2010. Our Committee found that decades of social policy making, by all levels of government - well-meaning as it may have been - has resulted in two equally devastating results.

First, even when all of the programs are working as they should, the resulting income is often only enough to simply maintain them in poverty. 

Second, at their worst, existing policies and programs actually entrap people in poverty, creating unintended but nonetheless perverse effects that make it almost impossible to escape the reliance on income security programs or homeless shelters.

That is why we need a new way. A new approach.

The In From the Margins report called for a study of a basic income or a guaranteed annual income, as it has also been known, but that was not pursued by government. Hopefully this time will be different.

If passed, through this motion, we would encourage the new government to test a basic income based on a negative income tax. It would be a tax credit administered through the tax system where if someone earns or receives less than the poverty line they would simply be topped up to a point above the poverty line.

Now this wouldn’t be the good life Honourable Senators. But is would ensure that all Canadians would have income that pays for the basic necessities of life, food, clothing, and decent shelter. It would provide a floor, a foundation, that low income people could then build upon for a better life.

This idea is supported by many Canadians. A 2013 poll by Environics found that 52 per cent of Canadians are in favour of a basic income. This support does not fall along a particular party line or political philosophy. People from across the political spectrum are in favour.

Conservative economist Milton Friedman was a proponent of a basic income. He said “governmental action to alleviate poverty is justified…a floor under the standard of life of every person in the community.”

Our former colleague, Conservative Senator Hugh Segal, Green Party Leader Elizabeth May, Alberta NDP Finance Minister Joe Ceci and Quebec Liberal Minister of Employment and Social Solidarity François Blais are among the many who have expressed support for the idea.

We also see that communities across the country are supporting the idea.  Many mayors have shown support, including Halifax’s Mayor Mike Savage, Calgary’s Mayor Naheed Nenshi, and Edmonton’s Mayor Don Iveson. The City of Kingston just passed a resolution calling for a national conversation and encouraged all levels of government to work together to “consider, investigate, and develop a basic income guarantee for all Canadians.”  We also have organizations like the Canadian Medical Association, the Canadian Public Health Association, and the Canadian Association of Social Workers among others that are calling for action along these lines.

We can see that a growing number of Canadians realize that the way we have dealt with the scourge of poverty has failed and we need a new way.

They realize that there may be a lot of positives to this approach. A basic income is a simpler and more transparent administrative approach to fighting poverty than currently exists and it would extend benefits to those who are currently not covered by social assistance programs such as the working poor. Instituting a basic income could be a 'stimulus' initiative by immediately injecting money into the economy. Also as Glen Hodgson, from the Conference Board of Canada said, “a basic income could strengthen the opportunity for labour force engagement and social mobility, especially for young people and disadvantaged groups living in poverty.”

In the 1970’s, a basic income program was piloted in Manitoba, mainly in the town of Dauphin, known as Mincome. Research done by Professor Evelyn Forget from University of Manitoba found that “hospital visits dropped 8.5 per cent. 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 showed that by and large it was new mothers and teenagers who worked less. Mothers stayed home with their babies longer. Youth worked less but spent more time in school and graduated in higher numbers. Overall, attachment to the workforce remained strong.

In the USA, basic income pilot projects began in the late 1960’s and took place in North Carolina, Iowa, and Indiana, among others. Research showed similar results to Dauphin. Hospital visits decreased with only a marginal effect of decreased work hours from secondary and tertiary earners (women and Youth).  Women had longer maternity leaves and youth stayed in school longer and their school scores increased.

More recently, Brazil created a basic income in 2003 called the Bolsa Familia. It was a country wide basic income that reached 46 million people. It contributed to a 20% drop in inequality, improved education outcomes and improved health outcomes.

Honourable senators, looking at these results we could see not only a upsurge in the living conditions for our most vulnerable but we could also realize a decrease in costs. As we know poverty is costing each and every one of us - forcing up our tax bills, depressing the economy, increasing health care bills and breeding alienation and crime. 

A 2008 study guided by economists and policy experts Don Drummond,  Judith Maxwell and James Milway,  estimated that poverty costs this country about seven and a half billion dollars every year in health care costs alone and between $8 and $13 billion in lost productivity.  All told, they set poverty’s bill at $30 billion annually.  And that doesn’t include the costs of social welfare administration by the provinces.

On the other hand, the now closed National Council of Welfare, put the poverty gap in Canada at $12 billion in 2011. That is what they said it would take to bring everyone up to the poverty line. $12 billion or $30 billion. Which one makes more economic sense?

But let’s not get a head of ourselves. Let’s take this step by step. We need a pilot project that can provide new Canadian data; that can determine how such a system should function in this day and age and what the benefits and costs would be.

Cost estimates of a pilot project can vary depending on how the program is designed and the level of support provided. The Manitoba experiment cost $17 million.

In conclusion, moving forward we need to adopt a simple, common sense premise: that social programs should lift people out of poverty, not keep them there. Poverty is not benign.  It affects us all.  It costs us all.   We spend a lot of money and don’t get the results we should. We need a new way forward.

A basic income is a new approach. A new path that has shown great potential. Let’s get the evidence. Let’s study this approach. If proven, we not only end poverty but we spend smarter, more efficiently and effectively