This past week, I listened to a podcast from the Conference Board of Canada’s “Bright Future” series featuring my old friend (meaning, someone I quote frequently), Hugh Segal, who has for years (since he “had hair”) been a fierce proponent of guaranteed annual income (GAI).
Asked by host Michael Bassett why he has been so involved in promoting this idea of a guaranteed income for those 18-64 who live below the poverty line, Segal gave credit to former Prime Minister John Diefenbaker, who came to Segal’s Montreal school to talk about his government’s recently passed Bill of Rights. Diefenbaker, Segal said, spoke of his vision of a Canada where everyone would have a place at “the family table.” The prime minister emphasized that they, the students, should “figure out how you can help to build his kind of Canada.” That idea remained with Segal and has underpinned much of what he has worked to accomplish during his political career.
When asked how he envisioned a GAI working, Segal referenced former US Democratic presidential nominee Andrew Yang’s proposal to give every citizen $1,000 a month with a tax claw-back for higher-income recipients only to specify that this is not his proposal. Segal would guarantee payments of $1,400-$1,500 a month for single people and $2,400 for couples living below the poverty line and dependent on one of the many provincial welfare systems, which provide recipients about $600 a month while clawing back any extra earned income (which, as Segal puts it, represents a “100% tax rate’). Segal’s GAI would cover people in arts and culture, gig and those whose income is sometimes low to non-existent.
About 9% of the Canadian population lives below the poverty line (a figure that rises as high as 40% in some Indigenous communities), including many right here in Cape Breton. Segal points to the Canada Emergency Response Benefit (CERB), which was “set up almost overnight” by Canada Revenue to provide financial assistance to those impacted by the pandemic.
Segal is confident the same agency would do an equally excellent job of setting up a GAI. Since Employment Insurance is slow and bureaucratic and doesn’t apply to about 40% of workers, he says, and since provincial welfare systems are even slower and demand way too much of a person’s private information, CERB provides a good model, given the CRA has taxpayers’ information at its finger tips. It’s true that some who didn’t qualify received CERB, but many have repaid what they owed, and one assumes the CRA would expect there would be those who would abuse the system.
Segal compares a GAI, as I believe I may have mentioned in earlier columns, to the guaranteed income supplement (GIS), which came into effect in Ontario in the late 1960s when citizens, especially women, were struggling to survive on Old Age Security. Some, according to Segal, had even resorted to eating dog or cat food for protein. The provincial government decided to top up their income to bring them to what was considered a “liveable” level. The GIS was later introduced at the federal level.
Just as the Child Care Benefit, introduced by the Liberal Government in 2015, has assisted many families and helped lower the poverty rate from 11% to 9% (especially with the recent increase in benefits), so would a GAI benefit Canadians. And although there are those who see it as a hand-out that would enable the recipients to refuse to work, the fact is, says Segal, that judging from the pilot program he helped create for the Kathleen Wynne government in Ontario (a pilot that was cut by the Ford government), 70% of recipients continued to work.
And data collected from Ontario’s program indicated, as did that from the Mincome experiment in Manitoba in the 1970s, that those on the receiving end of a basic income had better health outcomes (meaning a reduction in the costs of healthcare), chances to pursue their education rather than dropping out to find low-paying jobs, the possibility of moving into better housing, and the opportunity to become more engaged in their communities and to better their personal lives. One such recipient told Segal that with her first check, she purchased her first ever new winter coat!
However, federal finance departments (and those at provincial level, no doubt) prefer their finance ministers “preserve their spending discretion,” according to Segal, and are not keen on introducing new “statutory programs,” like healthcare, primary -to-12 education and income assistance for the elderly.
Another criticism leveled at GAI is cost, although given that most current provincial welfare programs would no longer be required, much of the cost of a GAI would be offset by decreases in social assistance costs. Segal says most welfare programs are overly bureaucratic and managed by caseworkers whose clients “believe they must live as the caseworker thinks you should,” and agrees with the famous economist Milton Friedman, who said you should:
Give the money to those who need it. It will go back into the economy and not into condos in Florida or into bank accounts in foreign countries.
Segal says while a GAI wouldn’t solve all problems, it could ameliorate many of those associated with poverty, including “lousy health, food insecurity, poor housing, lack of feeling part of the community,” and greater vulnerability to COVID-19. As for those who say poverty is “too complex” and pretty much “unfixable,” Segal believes they really don’t want to fix it.
The Fraser Institute’s complaint is that while a GAI would be a good idea, such a program would require agreement between the provinces and the feds, something that would be difficult to obtain. Segal believes the federal government should simply announce a GAI as part of the “COVID-19 recovery budget,” a CERB-like form of income security for all those below the poverty line. He puts the cost at $50 billion but says once you factor in the money federal and provincial governments are spending on assistance programs GAI will replace, the “new money” required would be $20 billion.
Segal believes the present minority government situation might be a good one in which to introduce the measure and, as mentioned, he is convinced the CRA has shown it could handle a GAI as efficiently as it did the CERB. As well, Segal points to the cooperation between the provinces and the federal government in the face of the pandemic and their shared sense of responsibility for managing the crisis.
Asked what lessons we should learn from the pandemic, Segal said we have lessons to learn about how Public Health responds to them, about supply chains, and about protecting those who are most at risk (including, I presume, those who live and work in nursing homes). But he also thinks we have lessons to learn about what kind of “normal” we want to return to and he hopes it’s not one in which too many people are cut off from full participation in society — in which too many people do not have “a place at the family table.”
Dolores Campbell, a lifelong resident of Sydney, is a freelance writer whose work has appeared in The Cape Breton Highlander, the Nova Scotian, Cape Breton Magazine, Catholic New Times and The Cape Breton Post.
