A basic income for everyone?

The patched-together income security programs put in place to deal with the COVID-19 crisis have left many people wondering whether we came close to offering Canadians a guaranteed minimum income. Maybe this is the right time for us to examine that concept more thoroughly.

A new 2020 level book by Winnipeg economist Evelyn l. Forget entitled Basic Income for Canadians: From the COVID-19 emergency to Financial Security for all—available at the Library—makes the for case for a basic income for all, and costs it out.

The idea of a basic income appeals to some on the left of the spectrum, in that it offers some social justice in taking from the rich and giving to the poor, allowing the poor to Iive with more dignity; but also to some on the right, who see if as a effective replacement for all kinds of costly social programs, and also a means by which the well-to-do can keep their earnings in good conscience knowing the less well off are provided for. Opponents of a basic income have pointed to its cost, and worried that low end jobs will go unfilled as people prefer to stay home and live on their state-supplied income.

Any serious discussion of a basic income plan has to be grounded in its cost; in turn, the cost depends upon the assumptions you make as to its design. Ms. Forget lists the level of the income guarantee; the rate at which stater suppled income is phased down and out to account for other income; whether it should be an individual or a family benefit, how long it should continue for; how it should be paid out: whether wealth apart from income should be accounted for, and how other income support programs would be affected as critical questions.

But design attempts have been made. In 2018, the (independent of government) Parliamentary Budget Office costed a model based on paying individual Canadians between the ages of 18 and 64 $16, 989 and couples $24,027. This assumes that income security programs for children and seniors would stay in place, Net of all the costs saved by ending superfluous federal and provincial income support programs, it would cost $23 billion annually. That is about the same amount as the federal government’s annual expenditure on employment insurance, and less than it spends on the Canada Child Benefit.

Ms. Forget presents another model developed in 2019 by Chandra Pasma and Sheila Regehr, an age 18-64 program that would pay a benefit of $22,000 for an individual and $31,113 for a couple, declining by 40 cents for every dollar earned. The gross cost of such a program would be $134 billion annually. However, the authors suggest a way to pay for it by eliminating the GST credit, non refundable tax credits and the Canada Workers Benefit; and imposing tax increases on the income of corporations of 5 per cent and small businesses of three per cent. Tax increases on individuals in higher tax brackets are also included.

Ms Forget also notes that other measures such as a wealth tax or an increase in HST rates could be used. The bottom line is that a universal basic income is “not costless, but affordable if we choose to pay for it.”

The book, says Dr. Forget “is an invitation to think hard about how Canadians support people who need help and how tax revenue is collected from others to pay for it. Basic income redistributes income from the wealthy to the less wealthy; that is its purpose. Not everyone will gain financially, Everyone, however, will gain by living in a society that treats people with dignity, where all children have the ability to reach their potential, and in which all Canadians can share the economic wealth of the country.”

It would be a shame if the pandemic, which has brought us to a new appreciation of those low income Canadians doing work that is essential, were somehow to derail debate about a basic income. It would especially be a shame if the issue did not become the subject of debate during our current general election.

The NDP platform states that it will “In time…work to expand all income security programs to ensure everyone in Canada has access to a guaranteed livable basic income. Making the creation of a guaranteed livable basic income a priority will strengthen our social safety net and finally ensure dignity, security and peace of mind for everyone in Canada.” The Greens haven’t published a 2021 platform, but they are on the record as having endorsed a guaranteed basic income. The Liberals call for specific enhancements to benefits for seniors and steps to make housing and daycare more affordable and available, but stop short of a universal basic income goal. Pharmacare was promised at one point but doesn’t figure in the current platform. The Conservatives, who talk about job creation, more expenditures in mental health, extending employment insurance to gig economy workers and bringing the deficit down, also don’t go near a basic income.

Maybe it’s time we returned to the subject and had a serious discussion about it. The social upheaval we will face as we recover from the pandemic will be massive. Adapting to climate change will be a social challenge like we have never seen. Governments used to anticipate challenges down the road by establishing Royal Commissions or issuing White Papers. Maybe something similar is called for in this case.

Thanks for writing the book, Ms. Forget.