As the COVID-19 pandemic persists across Canada, millions of people have lost their jobs or had their work hours cut, exposing the economic insecurity with which Canadian families were already living.
Before the pandemic, half of Canadians were already struggling from paycheque to paycheque with little left over for savings, and household debt was at a record high. Few had enough set aside to pay the rent or put food on the table for even a short period of time. This situation wasn’t caused by COVID-19; it reflects changes that have been ongoing for decades. More than a third of the workforce was working in precarious employment — on contract, in temporary jobs, self-employed or working part-time when they would have preferred full-time work.
The economic shutdown that happened in March of this year revealed the inequality and economic insecurity people were already living with, and it has forced us to acknowledge the limitations of our existing social safety net. People displaced from their usual employment turned to employment insurance and learned that fewer than 40 per cent of them qualified for any support. Those who did qualify received payments too little even to pay the rent.
When the federal government responded by putting in place a much-needed set of emergency support programs, it was discovered that the online system of accounts designed by the Canada Revenue Agency (CRA) to facilitate income tax collection was capable of working far better than we’d had any reason to believe it could. Using these accounts, the government could deliver emergency support to applicants in a matter of days. It could respond to changing circumstances. All that was necessary was a directive to administrators not to approach applicants with suspicion, withholding support until every detail of every application was verified and documented. Eligibility issues could be sorted out after people’s lives had stabilized and any overpayments could be recovered through the income tax system. That initial level of trust was soon challenged, but it was clear that it wasn’t technology that limited the ability to respond rapidly to changing circumstances.
The emergency supports, particularly the Canada Emergency Response Benefit (CERB), were important and necessary. For the most part, they were well delivered. However, the CERB was not a basic income. Support was conditional; the CERB was limited to people who had worked and earned at least $5,000 in the previous twelve months, and who lost their jobs or had their hours of work reduced by the economic effects of the pandemic or who had child care responsibilities associated with school closures. There were also design and implementation issues associated with the CERB that are very relevant to a discussion of basic income.
When the federal government announced at the end of July that CERB would end at the end of August and recipients would be transitioned to employment insurance in order to facilitate the reopening of the economy, it also acknowledged that employment insurance would not be adequate. Another new transitional program would be required to meet the needs of the many people in need who would not qualify.
Instead of seizing the opportunity to build a comprehensive program that would address emerging challenges, they chose instead to slap another patch on a creaky and bloated program designed for a bygone era. Yet all of this informal experimentation with income support programs, part of the government’s attempts to respond to the pandemic’s effects, provided evidence that could be used to design a better, more comprehensive program designed to meet the needs of the future rather than the past.
How might things have been different had a basic income been in place?
Over the past few years, proposals for a Canadian basic income have coalesced around a design sometimes called a guaranteed livable income or basic income guarantee. A person with no income, for whatever reason, would receive enough money to live a modest yet still dignified life. Low-waged working people living in poverty would receive a partial benefit — enough to ensure that they can live above the poverty line and that they benefit financially from working. Every dollar earned would reduce the benefit by less than a dollar until, for middle- and higher-income earners, the basic income disappears entirely.
Basic income would replace the inconsistent and expensive set of monetary benefits currently offered by the federal and provincial governments — the GST credit, the Canada Workers Benefit, provincial income assistance and provincial income replacement for people with disabilities. It would be supplemented by publicly provided services — public health insurance, public education, child care, special supports for people with disabilities and many others. Basic income doesn’t replace public services; it provides discretionary income that people can use however they like to meet their own unique needs.
Someone who had lost a job due to the economic shutdown caused by the coronavirus would be treated in exactly the same way as someone who lost a job for any other reason — because they or a family member were ill, for example, or a private employer faced bankruptcy. They would go to their online government account and enter the details of their income from all sources. Within a matter of days, a payment based only on their other income would be deposited to their bank account. Administrators would check eligibility and verify income, and any overpayment could be recovered through the tax system. There would be no intrusive and stigmatizing home checks, “means tests” or work requirements. Applicants would be approached with trust and treated with dignity. No one would need to determine whether an applicant deserves support; applicants would receive support based on their income alone.
As the pandemic continues, many people have begun to ask whether we needed a permanent income replacement benefit — a guaranteed livable income. It was clear that existing income supports were inadequate and, if retained, would have to be fundamentally restructured to include more people, provide greater levels of support, treat people with dignity and to ensure that the program itself didn’t discourage people from working. However, questions remain. Do we have the capacity to create and deliver such a benefit? Is it technically feasible and, if so, what exactly should it look like? How high should the basic guarantee be, and how quickly should it be reduced as other income increases?
Designing and implementing a basic income is not simple, but the issues involved are exactly the same as those that accompanied the introduction of the Canada Child Benefit. Who qualifies and who doesn’t? How much should recipients get, and how will it be financed? How should the payments be delivered? How can changing needs be accommodated? All these questions and more were addressed, and the resulting Canada Child Benefit lifted thousands of kids out of poverty. Every income-support policy requires income to be defined, and decisions must be made about how to treat wealth.
Some people who care deeply about lifting the floor and helping everyone reach their fullest potential argue that “guaranteed services” should be offered instead of basic income. Guaranteed services, they claim, will allocate resources on the basis of need while basic income is just money. No sensible proposal for a basic income imagines that money alone is sufficient. Canadians need public services, and to characterize the discussion as basic income versus public services is a false dichotomy. However, public services work much better for some people than for others. Public services are designed, implemented and evaluated by members of the dominant culture. That is, perhaps, one of the reasons why the final report of the National Inquiry into Missing and Murdered Indigenous Women and Girls recommended a guaranteed livable income for all Canadians. Basic income has sometimes been dismissed as a “one size fits all” solution, but it is precisely the opposite. As soon as someone has money, that money can be transformed into all manner of services and goods that address their unique needs — needs that they identify, and that they can address in their own way and on their own timetable.
Imagine, for a moment, what health care may look like for a pregnant woman from northern Manitoba. When she is seven or eight months pregnant, she will be flown from her remote community to a large, urban centre for the last several weeks of her pregnancy — alone, without her family and friends to support her. This ensures that she has access to the best technology and appropriate medical skills if something unexpected happens during delivery. But she leaves her kids behind, often staying with grandmothers or aunties or other friends and relatives or left in the care of older brothers and sisters. In Winnipeg or Thompson or Brandon, she will live without family support, but she may have access to support workers and will certainly meet many health-care providers. These workers often will not share her family background, and their support and advice will sometimes run counter to the way things are done in her community. The message she gets, unintended but still there, is that there is something wrong with her and she needs education, or there is something backward about her culture and it should change.
How would a basic income help this mother? It won’t bring better health care to rural and remote communities. But a basic income would allow her to pay someone to come into her home to care for her kids so she doesn’t have to worry so much. It would allow her to share some financial support with her mother or sister who may be caring for her kids while she waits to give birth. It would allow her to buy a plane ticket so her sister or cousin can travel with her to keep her company in the city. It might even allow her to hire a doula from her own cultural background who can help her communicate with well-meaning care providers. Whatever she chooses to do with her basic income, she is the person who will make that decision. She is in a position to decide what her most pressing needs are and how to best meet them. No public service can be everything to everyone, no matter how large the budget or how well meaning the people who deliver it.
Canadians need services, and sometimes we need our services to be better than they are, but we also need money — money that we can depend upon and that we can spend on our own needs, in our own way and on our own timetable.
Excerpted from Basic Income for Canadians: From the COVID-19 Emergency to Financial Security for All (Lorimer, 2020), by Evelyn L. Forget. Forget is an economist in the School of Medicine at the University of Manitoba. Several years ago she began researching the data associated with a basic income field experiment conducted in Manitoba in the 1970s. She has been consulted by governments and researchers in Ontario, British Columbia, Quebec, Finland, the Netherlands and Scotland on this topic. She lives in Winnipeg.
Image: Frances Mariani/Flickr