Motion to Encourage the Government to Evaluate the Cost and Impact of Implementing a National Basic Income Program
The speech below is a supplementary speech to Seantor Eggleton’s original speech on his motion, which was given in the Senate on February 25th, 2016:
What I’m asking you to do is not to make a final a decision on whether you support or do not support a permanent basic income. I am saying it is worthy of being tested. It is worthy of the pilot projects that are now being considered by provinces.
We did a pilot project previously. It was done in Manitoba back in the 1970s. It was called “Mincome.” It was done primarily in the city of Dauphin, Manitoba. It proved that in fact there are advantages to a basic income or guaranteed annual income program. Hospital visits dropped. Visits to people in medical professions and costs in those medical professions, particularly when it came to mental illness, with less stress as a result of this program, all showed savings in the health care system.
Workforce attachment has always been an issue for a lot of people with guaranteed income or a basic income program. Will people just leave their jobs, stay at home and live off that money? That experiment proved that workforce attachment was still quite strong. The only people that dropped off the workforce to any great degree were new mothers who wanted to stay at home and look after their children. This is before there were those types of benefits under the CPP that one can get today.
There were also teenagers who actually went back to school, got a better education, ended up going into the workforce and were able to earn a greater amount of money, having graduated in higher numbers.
What is needed today is current data. This experiment was 40 years ago. We need current data for today, and we have better methods of assembling information and being able to analyze that data.
At the same time, these pilot projects, or it could be a single project, help to build confidence. They help to provide the kind of evidence base that we need to be able to make a final decision on whether this is the way to move forward.
When it comes to income security, the federal government is very much involved with income security, and with a number of programs. One of them is very much akin to a basic income program. It is the Guaranteed Income Supplement, or GIS, for seniors. In fact, when that was added on to the CPP and the OAS payments back in late 1970s, it took the poverty rate among seniors from 30 per cent down to 5 per cent.
We also have additional programs like the Canada Child Benefit and the Working Income Tax Benefit, which are all part of income security, but none of them in total have been able to make a dent in terms of poverty, aside from seniors poverty, in this country.
The support for doing these pilot projects is gaining momentum. Ontario announced in their last budget they intend to do that. As a volunteer, they got our former colleague Hugh Segal to write a paper on how that project might proceed. Quebec is looking at the matter as well. In P.E.I., all the party leaders — the NDP, Liberal and Conservative leaders of that province — all said that they would like to engage in a pilot project relevant to basic income. There are mayors and counsellors right across this country in major cities who have also come on board.
A study done a couple of years ago by Environics found that 52 per cent of the people they polled indicated they thought it was something worth pursuing.
Why is this kind of momentum happening? Why are people talking about this now and saying, “Let’s look at it a little further and see if it will work”? I’d say there are three reasons for this. First is the persistence of poverty. Statistics Canada says that one in seven Canadians live below the poverty line. That’s 5 million people in this country, and 1 million of them are children. Back in 1989, the House of Commons said it wanted to eliminate child poverty by the year 2000. Today, child poverty is actually a higher percentage than it was then.
So there is still a long way to go. The Canada Child Benefit has certainly helped a lot, but there are certainly still of lot of children it is not bringing out of poverty.
Almost 900,000 people use food banks every month, and 38 per cent of the people who depend upon food banks are children. Four million are in need of decent, affordable housing in this country, and there are thousands of homeless people struggling with street life. For these people, our fellow citizens, every day is a battle with insufficient income, unaffordable housing, inadequate clothing and unsatisfactory nutrition.
It affects people’s health. The Canadian Medical Association has picked up on that by saying that “poverty makes us sick.” They noted that the lowest income quartile has twice the health care costs as the highest quartile in this country. One in seven children are going to school hungry in this country. There are dreadful living conditions for much of the Aboriginal population. There is greater vulnerability to poverty for them, persons with disabilities, single parents, new immigrants and people of colour. How shameful it is in a country as rich as Canada that we have so many of these poverty indicators.
Make no mistake: Poverty is not being defeated or diminished. It still had as a stranglehold on many Canadian lives. As our former colleague Hugh Segal said, “Our present system doesn’t fight poverty; it institutionalizes it.”
Poverty doesn’t just affect the poor. Poverty affects us all. Study after study has indicated that this is costing taxpayers billions and billions of dollars every year. And homelessness: It’s been proven many times again that it’s three to four times more costly to leave someone on the street than to give them housing with supports.
The kind of system we’ve developed is failing. I particularly would single out social welfare, a system that is degrading, stigmatizes people, marginalizes people and it is one that should be replaced with a better safety net.
Another Senator, David Croll, said back in 1970 that “we’re pouring billions of dollars every year into a social welfare system that merely treats the symptoms of poverty but leaves the disease itself untouched.”
It’s time to take a new path. It’s time to end the indignity, the stigma and marginalization of the current social welfare system. It fails us from a social perspective; it fails us from an economic perspective. It’s time to explore a new direction.
The second reason that I think we are seeing rising momentum to support basic income or at least the pilot projects is rising inequality. A wide gap in wealth and income levels has evolved in the past three decades in this country. Our society is becoming more unequal. When you have the top 100 CEOs in this country making on average $9.2 million a year and the average salary of a Canadian is just over $47,000, you can see that the prosperity is not being shared. Also, twenty per cent of the population controls 68 per cent of the wealth.
City neighbourhoods are becoming more polarized — a threat I would suggest to our social fabric.
In Toronto’s Leaside neighbourhood, there is 4 per cent child poverty. You take a five-minute drive into the Thorncliffe area and child poverty is 53 per cent.
In Hamilton, two neighbourhoods five kilometres apart have a 21-year difference in life expectancy. In one neighbourhood, the life expectancy is 83; five kilometres away, it’s only 62.
The third reason that basic income is gaining momentum is that the labour market is changing. Globalization, outsourcing, new technology, automation, robotics, artificial intelligence — all of these things are coming into play in terms of changing the labour market as we have known it. There’s a substantial loss of manufacturing jobs — blue-collar jobs — being replaced by precarious employment: more part-time work, fewer benefits. People are without the kind of secure, well-paying jobs that they’ve had in the past.
Professor Richard Florida at the University of Toronto says we are in the midst of the greatest, most thorough economic transformation in all of history. The Mowat Centre recently reported that 42 per cent of employment in Canada is at high risk of automation in the next two decades, particularly with new artificial intelligence and robotic technologies.
Those three reasons — poverty, inequality and the changing labour market, together with a feeble economy — contribute to the growing stress for many people to make ends meet as they live paycheque to paycheque, which half our population does. Insufficient pensions, too much household debt — these all lead to greater anxiety and a search for a better safety net.
What would a basic income pilot look like? Hugh Segal, in his report to the Province of Ontario, says it should be based on a negative income tax, like a refundable tax credit. It should top people up who are below whatever poverty line is determined in the pilot project to be followed. He believes that we can prove that a basic income would reduce poverty more effectively, encourage work, reduce stigmatization, and produce better health outcomes and better life chances for recipients. For example, people on social welfare would go from 45 per cent of the low-income measure to 75 per cent of the low-income measure. He would top up people on the disabled benefits program as well.
He suggests that all participation be voluntary; no individual should be made worse off during or after the pilot as a result of participation in the pilot. All personal data collected or assessed would be kept private by a research team. Aggregate data in the form of preliminary results once it starts to flow must be accessible to Ontarians in a transparent fashion.
So he has outlined a program that the province says it’s going to put forward; $25 million has been put into its budget to do this. But they do need the cooperation of the federal government, as will other provinces that may wish to enter into this.
In talking about this kind of program, we’re talking about income security. But there is more to the programs in terms of the social supports provided by the different orders of government. I want to make it clear that while basic income would replace provincial welfare and would have to be blended with or replace some other programs of a similar nature that add to the income of people of low income, we’re still going to need social support programs.
We’re still going to need programs for affordable housing; childcare; employment supports, such as training and adult re-education; and supports for disabled seniors. I believe that, in the long run, if we get by the pilot stage, we can operate a system more efficiently and effectively and at no greater cost than it is today. There will be transitional costs but, in the short term, certainly all of the social security money, whether for income security or social supports, needs to be left on the table by the provinces, by the federal government, to make sure that people will be better off, not worse off.
Let me say in summary that I believe all Canadians should have sufficient income to pay for the necessities of life: food, clothing and decent shelter. I think we would all subscribe to that. A basic income won’t provide for the good life, but it will lift people out of poverty. It should give them a better foundation and a stronger platform in which to move themselves forward, and their families, into a better life, better job opportunities, more education, less stress — certainly in being able to provide for those necessities. It should move people off the costly welfare rolls and the indignities involved to an income tax managed formula — a negative income tax — and top them up to a better position.
The current systems certainly aren’t working. It’s time to explore something new. So let’s get the evidence; let’s study this approach. If proven, we will not only end poverty and reduce inequality, but we will spend smarter, more efficiently and more effectively.