Image: KMR Photography/Flickr

A guaranteed livable income (GLI), also known as a basic income, will be an important component of Canada’s social, health and economic recovery from the COVID-19 pandemic.

In fact, as recently stated by Senator Kim Pate, the net annual cost of a GLI would have been a fraction of the cost of the Canada Emergency Response Benefit (CERB).

To be effective, GLI needs to be universally accessible rather than means tested, relying only on tax information or yearly total income to be disbursed. That ensures working poor, variously abled and those currently receiving social assistance in the form of programs like Ontario Works (OW) and Ontario Disability Support Program (ODSP) are supported by this social safety net. Employment insurance and the Canada Pension Plan should remain in place.

The Income Tax Act and regulations allow for adjustments by region making this income geared, yet flexible and adaptable throughout the year. But, to be effective, a system needs to be put in place ensuring everyone who qualifies is on the tax roles, including First Nations peoples, those in the gig economy, those without a permanent address, and people who aren’t working and don’t file income taxes.

However, a GLI is only the financial component of a comprehensive plan to support individuals and families. To be all-encompassing, a restructured Canada needs to include universal child care; affordable housing; universal health care that includes pharmacare, dental, long-term care, mental health supports and addictions treatment; free post-secondary education; a living wage with pro-rated benefits; and defunding of police, RCMP and the corrections system.

GLI cost savings, most notably in health care and the policing/prison systems, would take two to three electoral cycles to become apparent. Unfortunately, no Canadian GLI pilot has lasted that long.

The MINCOM experiment in 1970s Dauphin, Manitoba, lasted four years and had virtually no down side. Two groups stopped working: mothers of infants (pre-maternity leave days) who eventually returned to work and young men who remained in high school and often went on to college rather than quitting school to help support their families.

The 17-month basic income pilot, launched by the Ontrio Liberals and cancelled by the current Ford Conservative government, also had very promising outcomes. Approximately half of the participants who chose to stop working enrolled in school or university to upgrade their skills while others started new businesses. Meanwhile, physical and mental health outcomes improved overall thanks to better housing, food security and hope for a better future.

GLI has been supported by physicians like Dr. Andrew Pinto, former senators Hugh Segal and Art Eggleton, and most recently by Senator Kim Pate. During question period on June 25, Pate urged the federal government to replace CERB with, “the more comprehensive and less expensive Guaranteed Livable Income.”

When Pate asked if the government was willing to implement a GLI, the government representative in the Senate, Marc Gold, replied that implementation would require serious study and collaboration between all levels of government and “industry” — which he quickly changed to stakeholders.

And, therein lies the problem. Despite overwhelming evidence that GLI does not lead to a mass exodus from the workforce, many in industry, the financial sector and right-leaning politicians oppose GLI on the misinformed assumption that people will stop working.

Alternatively, some right-leaning conservatives support a GLI because they see it as a means to eliminate and/or privatize essential universal services and programs. GLI and expanded universal services should go hand in hand when creating a post-COVID Canada.

In Ontario, social workers would be freed up from policing clients formerly on OW and ODSP. That time could be better utilized to assessing client needs and directing them to services and programs that will help them thrive. Some physical and mental health services will find they are no longer running overcapacity because health in general tends to improve with GLI thanks to improved housing, food security, diminished stress and increased financial stability.

GLI is a chance to develop a greener economy. Smaller companies are more likely to establish a foothold in a what has become increasingly smaller markets dominated by multi-national companies, adept at navigating the pandemic-induced economic shutdown. GLI would also help ensure sustainable goals of climate change are integrated into the economic recovery.

In her paper, “Do We Still Need a Basic Income Guarantee In Canada,”  Evelyn Forget maintains,

“A programme designed as the Segal model, with a payout level set at 75 percent the Low-Income Measure (LIM) and a tax-back rate on earned income of 50 percent, assuming no behavioural response and targeted to those between 18 and 64, will cost Canadians approximately $30 billion a year, less the $15 billion we currently pay for income assistance. A net cost of $15 billion annually is not only feasible, it is about 5 percent of federal government expenditure and much less than we currently spend on seniors’ benefits. We can afford it if we choose to afford it.”

The 2020 low-income cut-off for a single person is $25,920 per year. Anyone living below that amount is considered poor. A GLI that provides 75 per cent of the LIM would be $19,440 annually.

Basic Income Canada Network (BICN) has come up with three options, with one providing an annual income of $22,000 (84 per cent of the LIM) to every 18 to 64-year-old in the country. They found that:

“It may be somewhat more expensive but not nearly as much as it might appear from its upfront $637 billion calculation because the money to pay for it is recouped at tax time (resources of $639 billion). This option requires more extensive change to the way income is taxed. Because we will all have received $22,000 of non-taxable income, we will all pay higher taxes on the first dollar of other income. Greater tax fairness, simplicity, transparency, and accountability are benefits of all options.”

Compared with the $71.3 billion that CERB will cost for just 24 weeks of payments, it’s clear a GLI is a fiscally responsible means of providing Canadians with financial security during, as well as after, the pandemic.

Doreen Nicoll is a freelance writer, teacher, social activist and member of several community organizations working diligently to end poverty, hunger and gendered violence.

Image: KMR Photography/Flickr

Doreen Nicoll

Doreen Nicoll is weary of the perpetual misinformation and skewed facts that continue to concentrate wealth, power and decision making in the hands of a few to the detriment of the many. As a freelance...