THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Wednesday, February 28, 2024
The Standing Senate Committee on National Finance met with videoconference this day at 6:49 p.m. [ET] to study Bill S-233, An Act to develop a national framework for a guaranteed livable basic income; and, in camera, in consideration of a draft report.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: I wish to welcome all of the senators as well as viewers across the country of Canada who are watching us on sencanada.ca.
[Translation]
My name is Percy Mockler, senator from New Brunswick and chair of the Standing Senate Committee on National Finance.
Now, I would like to ask my colleagues to introduce themselves starting from my left, please.
Senator Forest: Éric Forest, Gulf division, Quebec. I’d like to take this opportunity to welcome our former colleague, the Honourable Senator Art Eggleton.
[English]
Senator Ross: Hi. Krista Ross from New Brunswick.
Senator Kingston: Joan Kingston, New Brunswick.
Senator MacAdam: Jane MacAdam, Prince Edward Island.
[Translation]
Senator Dalphond: Pierre Dalphond, De Lorimier division, Quebec.
[English]
I also welcome our former colleague who I briefly knew for a few months when I first came to the Senate.
[Translation]
Senator Gignac: Good evening. Clément Gignac from Kennebec, Quebec.
[English]
Senator Loffreda: Welcome. Senator Tony Loffreda, Montreal, Quebec.
[Translation]
Senator Clement: Bernadette Clement from Ontario. Welcome.
[English]
Senator Pate: Kim Pate. Welcome. I live here in the unceded, unsurrendered territory of the Algonquin Anishnaabe.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
Senator Smith: Larry Smith, Quebec.
The Chair: Honourable senators, I see Senator Pate has raised her hand. I’ll give her the opportunity to speak, and then I will ask the committee to take a vote on it.
Senator Pate: I thank all the colleagues who reached out to me yesterday. It became very clear that there’s an interest in doing a more fulsome study than we have been able to do up to this point. Given our due diligence and, of course, I have great enthusiasm for this proposal — I propose the following motion. Notwithstanding the motion passed yesterday, I move:
That we defer clause-by-clause consideration of Bill S-233 so that the committee can exercise our due diligence and hear from other witnesses.
The Chair: Any comments or any questions from the senators?
Hearing none, is it agreed to adopt the motion?
Hon. Senators: Agreed.
The Chair: Carried. Thank you.
Honourable senators, today, we begin our study of Bill S-233, An Act to develop a national framework for a guaranteed livable basic income, which was referred to this committee on April 18, 2023, by the Senate of Canada.
[Translation]
We welcome this evening the Honourable Art Eggleton, a former senator.
[English]
He is a great colleague of the Senate and of all senators when he sat here in the Senate of Canada.
Mr. Eggleton, thank you very much for saying yes to our invitation to speak to this important order of reference. We are, without a doubt, awaiting your comments, which will be followed by questions from the senators.
Also from the City of Victoria, we have Mayor Marianne Alto, who is joining us by video conference.
Marianne Alto, Mayor, City of Victoria: Thank you for having me.
The Chair: Thank you for accepting our invitation.
We will start with opening remarks from the Honourable Art Eggleton, followed by Mayor Alto.
Hon. Art Eggleton, P.C., former senator, as an individual: Thank you very much, Mr. Chairman and members of the committee, for inviting me back. I spent many years sitting on committees of the Senate, including this one, but I never really sat at this end of the table as a senator. I never sat in the hot seat then, so please have mercy on me tonight.
I am glad to have this opportunity to come in support of Bill S-233, An Act to develop a national framework for a guaranteed livable basic income.
As a former member of the Senate and chair of the Social Affairs Committee, where I spent a lot of my years, and as a one‑time member of this committee, as I pointed out, I have been an advocate for social justice issues, particularly the reduction of poverty, but I have always kept in mind the need to do that in a financially responsible way. To further emphasize that, I would remind you that I was summoned to this committee many times when I was President of the Treasury Board between 1993 and 1996, so I appreciate those needs of fiscal responsibility.
One of my great privileges as a senator was to work across the aisle with our colleague the late Honourable Hugh Segal. The two of us worked to help produce a report in 2009 titled In From the Margins: A Call to Action on Poverty, Housing, and Homelessness. Amongst its recommendations was, one, to pursue the possibility of a basic income based on a negative income tax system. Our purpose was not a universal system of demogrants but to top up people, to give them a chance to escape poverty. Hugh used the phrase, and I quote, “Give them the boots so that they can pull themselves up by the bootstraps.”
Neither Hugh nor I would support a system that was beyond the fiscal capacity of government. We both saw it as a plan for people to escape poverty and reduce income inequality, because for these people, our fellow citizens, every day is a battle with insufficient income, unaffordable housing, inadequate clothing and a scarcity of nutritious food. It takes a toll on their lives with a loss of dignity, marginalization, stress and anxiety. Our current social assistance and welfare systems frequently trap people in poverty. The systems are a patchwork quilt of humiliation for so many people.
Incremental improvements are not enough. It happens that sometimes one government will come in and say, “Okay, we’re going to put some more money into this pot to help these people of low income.” The next government comes along and says, “Well, it’s time for restraint.” So it’s a step forward, a step back. Incrementalism doesn’t really solve the problem.
As Hugh Segal used to say, our present system doesn’t fight poverty; it institutionalizes it. It costs us all billions and billions of tax dollars every year. There are savings that could be made here, not only in administration but in the impact of such costs as health care, shelters for the homeless and public safety resources.
The Canadian Medical Association once said that poverty makes us sick, pointing out that the lowest income quartile has twice the health care costs than the highest income quartile. Homelessness costs us three to four times higher to leave someone on the street than give them housing with supports.
Also, it isn’t just those on social assistance who suffer, but many of the working poor can’t make ends meet even with more than one job. The working poor are substantial users of our food banks, and food banks, as we’re seeing in the media day by day, are growing in need. Many of them are, in fact, serving people who already have jobs but just don’t have enough to make ends meet.
Giving people a better foundation — this is what it’s all about. Giving them a better floor, a better foundation, to meet their basic needs will reduce those costs and give them an opportunity to build a better life for themselves and their families.
Some of the many pilot projects in Canada and around the world have demonstrated people can become contributors to — rather than dependents of — the public purse. Now, there’s another savings. There is where it goes from withdrawing to contributing. That’s a good investment, and it’s a good return on the investment.
As you know, there are many estimates on the costs of basic income for the federal and provincial governments. It all depends on the design of the program. There are, obviously, some that are far too expensive, that don’t meet needs and that go beyond what we were attempting to do to get people out of poverty, get them back on their feet and get them into productivity in our society. That’s why a framework, as recommended in Bill S-233, is needed.
As part of that, collaboration with the Government of Prince Edward Island, who have expressed interest, or any other willing province, it would help to demonstrate what a workable solution is in real life.
While there will be transitional costs as you change from system to system, I believe that, overall and in the long run, a guaranteed livable basic income will not require more money but will put us on a path to spending smarter, more efficiently and effectively.
It’s time to end poverty and reduce inequality in this rich country we are blessed to live in. It’s time to improve equality of opportunity and better sharing of our prosperity.
Thank you.
The Chair: Thank you, Senator Eggleton.
Now to the Mayor of Victoria. The floor is yours, please.
Marianne Alto, Mayor, City of Victoria: Thank you very much. It’s a real privilege to be joining you this evening. I was in Ottawa earlier this morning, actually, and rushed back to my home to be able to join you. It’s a privilege to join you on this important topic.
Thanks for the opportunity to contribute to this dialogue. I’m speaking with you here tonight from the traditional and contemporary lands and waters of the Lekwungen people, the nations of the Songhees and Esquimalt, on which the City of Victoria sits in its entirety.
Tonight I’ll be speaking to you about four ideas: the importance of a guaranteed basic income, or GBI; how we might pay for a national program by transferring some program funds; the potential role of local governments in delivering a guaranteed basic income; and how a guaranteed basic income affects community safety and well-being.
A simple guaranteed basic income is just one component of a community’s comprehensive, economic, health and social well‑being. It’s a manifestation of our collective compassion and of our commitment to treating and serving all of our residents with fairness and dignity. Canadians struggling to meet basic needs every day cannot fully participate in our society, and that is our loss. A guaranteed basic income creates opportunities for individuals with limited incomes to access and contribute to community programs and services from which they are otherwise barred because they lack financial capacity. A GBI enables a greater degree of social and civic inclusion.
Addressing income insecurity on a national scale at its source would save resources currently spent on reactive measures. For example, as the senator previously mentioned, estimates have suggested that investments in a GBI could lead to an 8.5% reduction in emergency hospitalizations, which today could mean a saving of over $5 billion. Similar projections have been made for police, courts and prison costs. I would argue that our society would be healthier and individuals could do their jobs better and thus be able to contribute to local economies through increased capacity to produce and purchase local goods.
In recognizing the broad and local benefits of a national program, let me just turn for a minute to what my and other local governments might do on a smaller scale. Local governments are uniquely positioned to assess the need for and deliver a targeted GBI. We already plan and deliver services on which our residents rely, and such services are planned in response to ongoing assessment of local conditions like population, demographics, housing availability and affordability, local cost of living realities and all of the other life challenges that face all of our residents. Applying this same menu of assessment tools would allow local governments to tailor a GBI to the real residents in our communities in response to their real circumstances. To enable local governments to deliver local GBIs, all orders of government must engage in talks about a new fiscal framework that redistributes tax dollars to recognize the increasing share of responsibilities being embraced by local governments — but that is a conversation for another day.
Finally, a GBI would have an enormous positive impact on our communities’ safety and well-being. Right now, Victoria is in the middle of a mayor’s initiative reimagining how community safety and well-being are defined and what it is and can be in real, practical terms. A significant aspect of our current community engagement is exposing my residents’ anxiety about their financial security and their inability to respond to the rising costs of housing, food, health care and the daily goods on which we all depend and which many of us take for granted. Those anxieties contribute to insecurities and fear, which play a demonstrable role in the breakdown of civil society, which undermines perceived and real community well-being and safety.
When the city’s community safety and well-being strategy is considered by our city council in September, some model of a basic income will be a component. The potential impact on community well-being of a simple, easy-to-navigate, guaranteed basic income was inadvertently demonstrated after the COVID-19 pandemic when the federal government implemented income support initiatives like the Canada Emergency Response Benefit, or CERB, and wage subsidy measures, which resulted in notable drops in poverty-related statistics.
It was also one of the most positively viewed government programs in recent years, and recent data compiled by the Canadian Centre for Policy Alternatives noted that over 80% of recipients rated that program with a thumbs up and in a very positive way. Recipients described CERB as a source of stability and financial certainty when other parts of their lives were in chaos. It helped them deal with social and economic stress, care better for their loved ones, plan for adjusted or new employment and allowed many to routinely take care of their basic needs.
Adapting the best aspects of CERB to a GBI would help alleviate the damaging effects of poverty and facilitate access to financial security, improve health, employment and education outcomes, and reduce stress levels. As individuals’ quality of life is improved by a GBI, so is the well-being of their, my and your communities.
In conclusion, a GBI could provide just enough income to lift people gently out of poverty, reduce anxiety and fear and increase the reality of and belief in local community well-being. Being sure that a person’s or family’s basic needs can be met means that these folk could take a moment to breathe and think and participate in community building because they don’t need to spend every second of every day worrying about feeding their children or whether or not they can pay their rent. This makes our residents — my residents and your residents — full participants and contributors to all of our cities.
I urge the Senate to facilitate the implementation of a national guaranteed basic income program through your support of Bill S-233, and until that is in place, to support local governments’ forays into the provision of a similar program.
Thank you.
The Chair: Thank you, Madam Mayor.
[Translation]
Before we go to questions, I’d like to welcome a new member to the committee, the Honourable Senator Dalphond.
Senator Dalphond, thank you for choosing the Standing Senate Committee on National Finance. There’s no doubt in my mind that you will have much to contribute to our future discussions.
[English]
I will now recognize honourable senators for five minutes on the first round.
Senator Marshall: Welcome back, Senator Eggleton. It’s nice to see you again. Also greetings to you, Mayor Alto. Thank you for being here this evening.
We’ve had a lot of witnesses appear before us on this bill, and most of them are in support of a basic income, but there’s no data there. It seems like the most comprehensive data that’s available came from a witness, Mr. David Green who is a professor. I don’t know if you’re familiar with him or not, but he chaired an expert panel on basic income in British Columbia, and they issued a comprehensive report. They actually recommended against implementing a basic income or conducting a basic income pilot.
My question is this: Why is there such a lack of information to support a basic income? There have been a number of pilots conducted over the years, or partial pilots, but there’s no data that would support it compared to what was produced by Mr. Green out in British Columbia. Would you be able to speak to that? I would be very interested in hearing why there is a lack of data.
Mr. Eggleton: I would beg to differ. There is a lot of data.
It’s true that some of the pilots have not gone on as long as were needed to give a very complete set. For example, Mincome in Manitoba, or even the Ontario one when there was a change of government, they stopped. There is a tonne of anecdotal information.
Senator Marshall: But no hard data.
Mr. Eggleton: There is some hard data in it. You have to accumulate it from different studies. There are a lot of different studies that have brought a lot of data. Many universities in this country have done a lot of work, with very detailed work out of Queen’s University and the University of Manitoba. They would all beg to differ in terms of how to translate the information that they have been able to put together into it being good, hard data.
Understanding your question, that’s why we need a framework, so that we can determine what is the best direction to go in this to be able to serve people’s needs but be able to have the kind of data that we need to be able to accomplish it. It’s a step-by-step process. It starts with building this framework.
There is a lot of information out there that can be of great value. If it’s necessary to do more pilots to get more data, then do it. The anecdotal stuff is compelling. I don’t think we can just drop it because we don’t think we have enough hard data. Let’s get the hard data.
Senator Marshall: When Mr. Green appeared, they had a comprehensive report. He was able to speak to it in a broad perspective. When you speak to other people who participated in pilots, like former premier Wynne, you do not get the feeling that it has been wrapped up. It’s not all in one place. It would seem to me that, for people who are supporting a basic income, a project, the data would be available and presented in a convincing manner. I find that the more convincing data is actually in what Mr. Green provided. I should mention that I spent three years as a deputy minister of social services, so I’m very familiar with all the financial assistance programs. On one hand, you have a lot of good information not supporting it, and then over here it seems you don’t have the same quality of data.
Mr. Eggleton: I think there is a lot of basic information. I’ve seen stories where people have been able to use a pilot project, have gotten back on their feet, moved forward and have better jobs and started to be contributors to society in that respect, as well as to their own lives. Those stories are very compelling. There are lots of them out there. That’s a good start.
Senator Marshall: Do I have time to hear from Mayor Alto?
The Chair: On the second round, please.
Ms. Alto: I would like to respond to that at some point, if I have an opportunity.
The Chair: Madam Mayor, I will recognize you for one minute.
Ms. Alto: Thank you.
Senator Marshall, thank you for the question.
The British Columbia report which you cite actually has to be situated in the context of the present government’s priorities. There are so many incredibly dramatic and very aggressive priorities this government has put forward around housing and supports and a variety of other social services that this particular way forward has not been a priority for them, and it is not likely to be on a provincial scale in the near future, partially because there is a provincial election looming but also because there has been an aggressive suite of other actions intended to be supportive of people who are impoverished and struggling.
On the data question, the pilots that have taken place here in British Columbia have accumulated data in a short time. I would suggest, as I mentioned in my remarks, that the inadvertent data that came forward as a result of the various income support programs that emerged out of COVID point dramatically to how those sometimes very minor assortments of different funding made incredible differences to people’s capacity to be able to change the way they live when they were so close to being impoverished. There are actual living examples within some of those programs that we would need to accumulate with a little effort to provide the data you need, which I completely agree needs to be accumulated.
The Chair: Thank you, Madam Mayor.
[Translation]
Senator Forest: I’d like to thank Mr. Eggleton and Ms. Alto for their fascinating presentation.
It’s easy to see the widening gap between the wealthy and the vulnerable.
My first question is for Mr. Eggleton. You’ve served as a minister. You know that everything is complex in a federation. Given that the federal government and the provinces share responsibility for tax credits and social assistance, what kind of framework for guaranteed basic income would be feasible in the context of the Canadian federation?
[English]
Mr. Eggleton: It’s going to take consultation between the federal and provincial governments. We at least have one province that’s indicated it’s quite willing to do that. We have a lot to sort out in terms of where you start and how you set up the system, the framework that this bill calls for. That’s what we ought to get them to start doing. The main aim here is to get people out of poverty, get them up to a better position so that they can then move forward with their lives. We’ve seen in many of the pilot projects where that has worked well.
At the end of the day, it will pay dividends. It will reduce health care costs. It will reduce costs in the criminal justice system. It will reduce costs in terms of administration, the kind of administration that goes on now with welfare and social assistance programs that are humiliating in many respects for people. There is a lot of cost savings. There is, as people get on their feet, an ability to be able to move forward with their lives and become contributors. It’s a good investment. They have to sit down and work out the parameters of it. There are so many different studies that have been done with different conclusions. That all has to be sorted out, and that’s where we need to start.
[Translation]
Senator Forest: Ms. Alto, do you have any comments or questions?
[English]
Ms. Alto: Briefly, I think that’s an incredibly important puzzle for us to solve. There is no real way that we can do a national program until we have full consultation with all of the provinces and territories.
I would also urge the senators to consider the utility of including municipalities as well, partially because we have the ability to actually do the work on the ground and provide you with some of the data and examples that have been knitted together across the country to show all of the provinces and our leaders how it can get done.
[Translation]
Senator Forest: Ms. Alto, I heartily commend you. I worked in the municipal realm for 27 years, I was a mayor, and I understand your situation. Furthermore, my major concern — and this is an important issue in Quebec — is that municipal taxation is founded on property taxes.
More and more municipalities are playing a key role from a social perspective and they’re having to deal with homelessness, housing and so on. Is that a reality for you as well, even though the vast majority of your income comes from property taxes, which are reserved for buildings, not individuals?
[English]
Ms. Alto: Thank you for the question.
You’re correct. More than 60% of our income as a municipality comes from property taxes. The rest comes from a variety of different agreements, services and permits. We do have a huge challenge, as I mentioned in my remarks, as we continue to take on more and more of what had been traditionally primarily provincial but also some federal programs as well. We as a community in Victoria — I don’t think we’re alone, certainly in British Columbia — have been for some years, as I’m sure is probably true across the country, somewhat reluctant, and a bit angry, actually, at how much downloading, as we call it, has happened.
There is a real turn that is happening. Certainly, my reference to our city’s community, safety and well-being plan is part of this. It’s very much a realization that cities have now evolved and are evolving into much more compelling and much more directly service-oriented governance structures. There is a real movement for us, rather than to resist, to actually embrace it and, in that conversation, to then be able to look to our residents to ask how much they are willing to spend in order for us to deliver these services to all of our residents. Whether they’re housed or unhoused, whether impoverished or wealthy, they are all our residents, and we need to treat them with equity and with a certain and absolute degree of fairness.
That is what I referenced earlier about the more national conversation on the degree of interaction around a new fiscal framework, but I have no illusions that that’s coming soon. When it happens, in some years — I hope when I’m still in office — that’s great, but, meanwhile, we do have to take responsibility as municipal governors to find the money any way we can in order to serve all of our people. If that’s property taxes, then that’s my responsibility as a mayor to persuade my residents that this is worth it, because I believe it is. I believe they will, too, with the proper information.
The Chair: Thank you, Madam Mayor.
[Translation]
Senator Gignac: I’d also like to welcome our witnesses. I agree with what you said in your opening remarks — at first glance, introducing a guaranteed basic income would help reduce inequality. If we compare Canada to a number of other countries, like our neighbours, for example, we have a much smaller gap between the rich and the poor. In addition, the inequality gap has narrowed since 2015.
However, according to an April 2021 study by the Parliamentary Budget Officer, it seems that not all categories would benefit from a guaranteed basic income. Couples would not be affected, but a single parent with two children who would qualify for the guaranteed basic income would be worse off than they are now, because they would no longer be eligible for various existing exemptions and tax credits.
It varies from province to province. In some provinces, a single parent with two children would have a lot more to lose than others.
Do you agree with the PBO’s conclusions in that respect? What could be done to make sure no one comes out with the short end of the stick during a reform?
[English]
Mr. Eggleton: There are different aspects to the design that the PBO looked at than what others have looked at. I don’t think that anyone in a low or moderate income should be reduced in terms of their support. We have a progressive tax system, and we’ve got to treat people in a way that they’re not going to be worse off. There are other designs that could be employed.
One of the designs, for example, that I think he did employ was treating as individuals even young people who are still at home. Their parents may not qualify. He or she may be part of a household that in fact has sufficient funds, although the individual may not, being a student perhaps or someone in a low‑income job. I think you have to look at the household income. If you do that, there would be a considerable savings over and above what the PBO was looking at in that case.
In the first study by the PBO, which was just out before I left the Senate, there was no reduction in provincial contributions to social assistance. If you take that into consideration, then you have a different picture altogether. It depends on the design, and that’s what needs a lot more attention. I’m not saying the PBO was wrong in coming to the conclusion they did, but it was based on the input that they used to produce the output. There just needs to be a better formula.
[Translation]
Senator Gignac: The Parliamentary Budget Officer says one thing; we know that Quebec has a very progressive approach to society. In 2017, an independent panel of experts studied this and rejected the idea of a guaranteed basic income. In Quebec, we generally have all social programs before anyone else, including day care, pharmacare and dental care.
[English]
We have all the social programs and were very often the first among them. I’m concerned about the fact of this expert mentioning it is basically not recommended.
[Translation]
My question is about work incentives. The Parliamentary Budget Officer and others are saying that a guaranteed basic income will have an impact on the work incentive, at a time when many immigrants are being brought in to address the labour shortage issue.
Is it a good time to move forward with this project, when we have a labour issue that could affect the work incentive?
[English]
Mr. Eggleton: That is one area where there are some hard data statistics that came out of these various studies, not just in Canada but in other parts of the world, where there has not been a substantial diminishing of workforce attachment as a result of the implementation of basic income.
We have a strong work ethic in this country, and people are not going to be satisfied to just get enough to get by, to get their basic necessities. The kind of plan that we’ll end up with will not give people, by itself, the good life. It will make sure they have the basic necessities and a little bit of room to manœuvre, to get out of debt, to get more education, more training, whatever, to move themselves on to a better life. I think that’s what people want. One of the great benefits of having this is to allow them to get ahead in life and to get out of the situation where they are so miserable.
The Chair: Mayor, do you have any comments? Can you add on the two questions asked by Senator Gignac?
Ms. Alto: Yes, on both, but just briefly on the first question. I will not comment on the Parliamentary Budget Officer’s piece. Obviously, that’s beyond my purview.
The notion that you are now considering a framework actually answers the question that was posed. Your framework has to be a living document. It has to be a document that is reflective of what the changes may be as society itself evolves. If you’re going to create a framework, it can’t be static. It can’t assume that everything we want to look at and consider right now is all that there will ever be. It has to be built in a way that allows adaptability and evolution, to be able to consider the exact issues that are behind the question in so far as being able to recognize that that will be different ways that different people actually respond to the concept of a basic income. Where there is evidence that it’s being overused or perhaps used inappropriately, there needs to be consequences for that. I agree with Senator Eggleton’s comments in that we have a very strong work ethic in this country. Those issues will be the exception rather than the rule. For me, you’re debating a framework that has to be evolutionary and living.
The Chair: Thank you, mayor.
Senator Smith: Welcome, Mr. Eggleton.
In 2020, you co-authored a report with the former late senator Hugh Segal in support of a national basic income program. You were hopeful that the patchwork of COVID-19 support programs would provide many learned lessons for the design of a more permanent income security program for the future. Almost four years later, with many of the support programs sunsetting, I would like to hear your thoughts on the lessons learned that you feel are important to consider as we move forward.
Mr. Eggleton: From the COVID experience?
Senator Smith: Let’s put it this way: The COVID programs provided great relief for many Canadians. You could assume that if you had a parallel between the potential of these programs being implemented later on, you could use that as a basis to form another basic income program. From that whole experience, what lessons have we learned?
Mr. Eggleton: We certainly learned that people made improvements in their lives. Now, I’m not suggesting that a basic income program be designed along similar lines. That was to meet a certain circumstance and get it out the door very fast, which it did. This one can be planned in a lot more targeted fashion to bring people out of poverty. I think the lesson learned is that giving people more income security will improve their lives, but one must be very careful to be fiscally responsible about how this is all developed.
Senator Smith: For people who would potentially be against implementation of such a program, what needs to occur to try to get those people going in a more positive direction towards the formation of a basic minimal income? What do you do with these people that are out there and just saying, “No, no, we can’t do this. We can’t give people this, and we can’t afford this,” which is common? What can we do?
Mr. Eggleton: I don’t think we can afford the way things are now. Poverty is costing us an awful lot of money. I saw a study that came out of, I think, the University of Saskatchewan that suggested that poverty is costing us about $80 billion a year. That’s an awful lot of money, and it’s wasteful. We need to help people, not put barriers in front of them so that they, as a result, find themselves in considerable stress and anxiety and can’t get ahead in life. Some people say, “Well, you’re giving people a handout.” No, I think we’d be giving them a hand up. We give them the opportunity to improve their lives.
I think the data that comes forward about the studies in terms of the work ethic are also an indication that people aren’t just dropping out of the workforce. The Mincome experience, for example, in Manitoba found that the only people who were really dropping out were kids who wanted to go back to school, young people who wanted to go back and get a better education and get ahead in life. I think more of those stories, more of that information, needs to be out there, because, as I said, I don’t believe in the long run that this will cost more money at all.
It certainly can be implemented on a very gradual basis. The government has decided it wants to implement pharmacare, for example, but it’s not going whole hog into it. It’s saying, “Look, we’ll start with this more limited measure, but we will get there eventually.” I think we can do that in terms of getting the framework developed and getting a basic income, hopefully, in P.E.I.
Senator Smith: My question to you, mayor, is this: how do we get the various levels of government together?
Ms. Alto: It’s a great question.
I would like to briefly speak to your earlier question, if I might. I agree with everything Senator Eggleton mentioned, but I would approach it from a bit more crass perspective, and it’s an example of just numbers. The City of Victoria has spent, over the last few years, millions of dollars reacting to poverty-related crises in our city. It’s typical of most municipalities of any size at all — in fact, I think of all municipalities. If we had actually been able to construct a relationship with the provincial government and other not-for-profit agencies to be able to create the supportive housing and supportive services that could have taken those people who are impoverished and placed them in a position where they could help themselves, we would have spent a lot less. All you need to do is start looking at the actual cost of what municipalities and regions and provinces and the federal government are spending to support people with these fragmented policies and programs and compare the cost of that to something that’s more cohesive and coordinated like what you’re discussing. Even if you want to put aside the social responsibility aspect of this, the numbers themselves will speak in favour of this type of a framework.
On your second question about bringing governments together, I don’t believe that there is a way for us to construct any type of a consistent national program unless the three orders of government are at the same table. There are aspects of each one of those which can take control. Municipalities can do the direct work. Provincial governments can do the planning province by province, because each province has to be respected for its unique position. The federal government can be the backstop that says there are certain thresholds that you must meet, criteria that every program, no matter what it looks like, must meet so that there is cohesion and there isn’t a division amongst the different provinces and the different municipalities so that you choose one over the other because it’s better. There has to be consistency.
I think the answer to your question lies right in front of you at your table. If you support this framework with the authority and persuasive capacity that all of you have, you can make this happen. If you can lead on this, people like me can help you, because we can do it from the perspective of what we can do city by city what you can do on a national basis.
The Chair: Thank you, Madam Mayor.
Senator Ross: Thank you both for your presentations this evening. They were very informative.
I wonder if you might give me your perspective. For those who participate in a guaranteed income program, do you believe that it would be a transitional program or a permanent program, and in order for it to be transitional, how could people be motivated or incentivized to no longer be on the program? Or would you see it as a permanent program for some?
Mr. Eggleton: Certainly, from my experience over the years in meeting with people in communities right across the country — and I also, too, had a municipal perspective at one time as the mayor of Toronto for some 11 years — I think most people want to be able to get out of the struggle they are in. Whether they are working poor or whether they are on social assistance or whether people are disabled, I mean, that’s a crying shame because they have been struggling to make ends meet for so long. There is an epidemic of stress out there. As people can get out of that situation, then they will do everything they possibly can to move forward in the best way possible for them.
Sure, there are going to be people who won’t or people who will take advantage and perhaps abuse the system. I don’t think we design a whole program just based on that. I think we should be designing a program that will serve the vast majority of people who want to get out of the predicament they are in and who want to become contributors to society. Think of all that additional support and productivity to our economy that could be made by these people, plus all the savings in terms of the great amount of health care costs and everything. People don’t want to be in that state any longer than they have to be, so the sooner we can get a program that gets them out, the better off we will be in our society.
I think we will set a good example. We have set examples in other programs. At one time, they would have said, “Medicare, we can’t afford it; it’s too expensive.” Or, “Oh, we have to deal with all these provinces; it will never happen.” Well, it did happen. And with child care, for years it was said, “Oh, we can’t get the provinces to agree with us on a child care program.” Well, we have one now. It’s not perfect. There’s a long way to go in making sure it does work, but let’s get moving on this, because I think it will pay dividends.
Senator Ross: If I heard you correctly, you think that a program like this should be designed to motivate and incentivize people to be on it for a briefer period?
Mr. Eggleton: Absolutely, and I think it will. I think there is a lot of evidence to that effect in the studies. Even though some of these studies have been short or incomplete and have had different designs on them that produce different kinds of results, nevertheless, there are some common threads through all of them that indicate that, yes, people will take advantage of the opportunity. If you give them some income security, they will take advantage of the opportunity and move themselves forward.
Ms. Alto: Thank you, Senator Ross.
I think, practically speaking, there will always be a very small number of people who, for a variety of very legitimate reasons, can’t move on. It’s our responsibility as a community to ensure that those people are cared for adequately.
I think Senator Eggleton is correct that the vast majority of people would see this as being transitional. There may be a way to design the program where there are incentives for it to be transitional or for there to be some limits on whether or not you can do it for an infinite period of time based upon different types of thresholds or expectations. This is not to be a panacea in my view; it’s to be something which truly is transitional, to take folks who currently cannot get by or see anything further than the day-to-day struggles and crises, to give them that breathing room to be able to see the slightly bigger picture. I believe when people can glimpse that and see the reality of it, they will move on. Canadians are a very ambitious people. We have a history of that. I don’t think that’s changed. I think it is reasonable to think it’s transitional, that there would be some incentives, but with a recognition that there are a few folks who may not have the capacity to do more.
Senator Ross: Thank you.
Senator Pate: Thank you again to both Mayor Alto and our former colleague, Senator Eggleton.
I want to come back to the question that Senator Marshall raised about disincentives to work. In fact, Professor Green was here, and in the B.C. report they talk about a basic income not having an appreciable negative impact on the workforce participation. As well, Dr. Jiaying Zhao testified, and who is doing the cash transfers, and is documenting the very thing that Senator Ross talked about, which is that by providing a lump sum payment — which is another model; it could be a model that would be incorporated, or not — that they are seeing really quite quick results, out of homelessness within three months, many of them employed within 12 months. Those are pretty amazing stats for data which we know in the social assistance system is quite the opposite. It keeps people entrenched in poverty and uses negative and moralistic approaches rather than incentives to work, like the Ontario pilot. I’m curious if either of you have more to add to that.
I know that when I first met you, Senator Eggleton, you weren’t necessarily a supporter of basic income. It might help some of the public who are listening, as well as some of my colleagues, to hear how you moved to that place of supporting basic income. I know it wasn’t always your view.
Mayor Alto, I’d like to hear how you came to this position as well.
Mr. Eggleton: Initially, when I teamed up with Hugh Segal and we did the report through the Social Affairs Committee, In From the Margins, I said let’s be careful how much we press the basic income because I’m not sure at this point that that is part of the answer. As I got involved in meeting people from coast to coast as we were doing that work, that study and the follow-up to it afterwards, I became convinced that that really was the way to go.
In terms of either working poor, people on social assistance or people who are disabled, I would see governments that would come forward and provide some additional funds. Then another government would come and more or less take it away or freeze it for a period. Incrementalism in that respect to the current systems was not working.
Plus the patchwork of programs, services, and the conditions on them drives people crazy in terms of having to spend so much time trying to comply with all of these things. One has to put some trust in people who want to move forward to be able to do that, figure out how to do that best.
I became convinced that it would work better that way than the current system would. Hugh helped get me started on it. I am convinced this is the only way that we really will get out of the poverty that we are in.
Yes, we do have the Canada Child Benefit. We do have the seniors’ programs which, combined, are a form of basic income. Hopefully, we’ll soon have something for people on disability. Yes, we have these, but we still have three million people in poverty in this rich country of ours. As part of doing all of that as well, we need to review our income tax system. The last time that was done was the Carter Commission back in the seventies. It’s time to do it again.
Ms. Alto: Thank you, Senator Pate, for that question. If I heard it correctly, you were curious about how both Senator Eggleton and I came into this field.
For me, it came from a different perspective. It was working with a number of advocacy groups that had nothing to do with this particular topic but had to do with a variety of different identified groups who, themselves, were oppressed for a variety of different reasons. In those sectors, the work that often had the most spectacular and almost immediate response was when those folks, who had faced different types of discrimination for different issues unrelated to income, were able to be supported, even briefly, with microlending, rent supplements or programs that allowed them to get a little bit of money that changed their ability to exist within whatever challenges they faced.
Looking at the amazing benefit that even that very short-term and — as Senator Eggleton described it — incremental type of assistance, and the change it made, the ability to move people out of poverty and into a place where they weren’t as dramatically affected by their oppression, it gave me that sense that if we could do this and have that kind of an impact in a short period of time, often with very small amounts of money, imagine what impact would happen if you could do that in a way which was organized, consistent and certain over a longer period of time, perhaps with a little bit more money.
For me, it was very much a practical example of how much could happen with so little. If you imagined that writ larger, what a huge impact that would have on folks who struggle day by day by day. That, for me, was the introduction over a dozen years ago now in trying to advance some interest in this type of a program nationally, provincially and locally.
The Chair: Thank you, mayor.
Senator Loffreda: Mr. Eggleton, welcome and welcome back. I did not have the honour or privilege of working with you, but welcome back to the Senate and to our committee this evening.
You had insightful opening remarks. You did state in your opening remarks something that resonates with my sentiments. You stated that you would not recommend or legislate a policy that goes beyond the fiscal capacity of government. That’s important. Fiscal responsibility is very important if we all want to keep living prosperously.
Fiscal capacity has substantially decreased in recent years. Do you believe we still have the fiscal capacity for such a policy today? I say that because we are discussing pharmacare and other policies that already appear to be a priority, despite our current debt levels, which have substantially increased with and since the pandemic. Are we sending the right message by putting together such a framework at this time? I know it’s a framework, but every framework is put together with the intention of, one day, being adopted. If it remains a framework, we haven’t accomplished anything.
Mr. Eggleton: I agree a framework is only as good as the follow-up and implementation. We do have a province that has all-party support to be willing to do that. I think they, together with the federal government, can design such a program that will work for them. I think from there, just as medicare started with just one province, it could then become, and should become, a national program. I think we need the political will to do this. We can do it if we can get the governments together to get the framework in place and then to actually implement it.
Yes, there is the fiscal framework that always has to be considered in all of this. I know that full well. I am a former member of this committee. I’m a former Treasury Board minister. I think in the long run, as I said, it will pay for itself because of the savings in terms of the health care and the other things that are costing us more than what they should because of poverty. It will assist in turning people’s lives around and getting them in a position where they can advance themselves. Many people, even on the limited pilot projects that were done, did get a change in their life that was much to their advantage and the advantage of our country.
Senator Loffreda: We would be one of the first countries to adopt a guaranteed livable income. Given where we are at this point in time, could you provide examples of where else in the world it has been adopted and is successfully ongoing?
Mr. Eggleton: There are many different designs, and they come from different purposes. There is one in Brazil, for example, that for quite a number of years has proven to be quite successful and attempts to better educate people. You do some things for the kids and it also helps the parents, just like the Canada child benefit does in this country.
Senator Loffreda: The poverty in Brazil is extremely high.
Mr. Eggleton: Yes, it is, but there are different programs that can help make it less than what it is. In many different places in the world, there have been attempts, and they have made a difference. We would design ours differently. We wouldn’t design it quite the same.
Senator Loffreda: Is it ongoing anywhere at this point in time successfully and not just a pilot project?
Mr. Eggleton: I can’t name one offhand that continues on a permanent basis.
Senator Loffreda: I am looking for one that is successfully reducing poverty and reducing that gap.
Mr. Eggleton: There are successes in a number of these projects. Some of them have been at the municipal level in the United States and in different parts of the world. There’s the program in Finland. They have all produced positive results. Would any of them be exactly like the thing that we want to produce here? I think we will produce something that’s distinctively Canadian, and I think we can make a big difference by doing it.
Senator Loffreda: Thank you.
Ms. Alto: Very briefly, I have three quick things to add. Senator Loffreda, thank you for your question.
First, I think the identification of the crises that you put forward in your question answers the question. In such a situation, I don’t think we have any option but to proceed with something that will address what is being considered as a much more urgent crisis as we move forward and examine the likelihood of increasing poverty across the country. From my perspective, as the crisis builds, it just dramatically means we have to do more.
Second, on the framework itself and on the questions around cost, we have to balance it out. I agree completely. It has to be something we can afford, but when you start looking at the savings that we get not just in health care but in policing and emergency services and emergency responses, I think that you could, over a period of time, easily begin to look not at necessarily a lot of new money but at the transfer and exchange of money from different programs in a more efficient way.
Lastly, on your question around who else is doing this, Canada has a reputation and a history of leading, and this is an area where we can do that and we should.
Senator Loffreda: Thank you.
Senator Clement: Thank you to both witnesses.
Senator, when you talked about institutionalizing poverty, that resonated for me. I’m a legal aid lawyer, and I ran for municipal office when I started representing the children of the clients that I had at the beginning of my practice. There’s this cycle, and when you don’t break that cycle, it’s just families living in this cycle.
My question is for Mayor Alto, because even though I sit here very honourably and happily as a senator, I do think the municipal level of government is often the most compelling. In your opening statement — and this speaks to what Senator Smith was talking about — you spoke to the seeking of consensus, if you could persuade your residents that this is the right thing to do. What would you say to your residents? How do you get that social consensus that is clearly lacking here? This has taken a long time. Pilots come and go or don’t finish.
Ms. Alto: Yes, such an excellent question. Thank you so much for that, and I appreciate the background that you explained from how you got where you are.
At a local government level, there really is an unusual opportunity, as you imply, for us to be able to speak directly to our residents who, as you well know, are the principal authors of all of the money that we get to do the services that we provide.
In the context of the project that I described earlier, the community safety and well-being initiative that’s ongoing right now in the city, part of that messaging as it begins to emerge is to be able to prove, to provide evidence, that the folks who are the most colloquially hard done by are the same people of the folks who have something. People like me who have the privilege of owning a home need to see the individuals who don’t as just as viable, just as legitimate and just as equal as any other Victorian, from my perspective.
There are the stories we tell and the data that we have. We are collecting enormous amounts of data as we go through this project so that, as some of your colleagues have asked earlier, we can provide the hard numbers that say this many people will be served by this much money, and we expect based on the evidence that we will have this much outcome. That has to be part of the persuasion, but it also has to be part of a storytelling that we do as well. I understand that many people feel that that’s not as valuable; but in the context of our work with our Indigenous partners, we understand more and more and more about how rich and important those stories are because they are the stories of people.
If we can get the people who will be impacted by this to tell their own stories to the people who will ultimately pay for it, at least initially, then that coming together of people and seeing one another’s lives and how they can solve these problems together is so powerful that I believe the people who are paying up front, people like me through our property taxes, will see the emergence of the people whose lives improve as they begin to be able to actually pay into the same system, as they move through it and become themselves perhaps economically stronger participants in our own community.
It’s a dialogue. It’s a conversation. It’s persuasion, yes, it is, but it’s based primarily on the combination of data, evidence and the storytelling of people’s lives as they change. We listen to one another. We like to listen to one another. If we can continue to keep that open mind, we will see the solution, because the solution is sitting next to us in the chair that’s at the table, in the sidewalk where we’re sitting on the bench, in the park where we’re looking at the beautiful weather that we have here now. These are the people’s stories that themselves provide the evidence that is persuasive, and that’s what we’re trying to do here with this project, and I believe it will work.
Senator Clement: Thank you.
Senator MacAdam: Thank you for being here this evening.
My first question is to the Honourable Art Eggleton. From your experience working in government, from the municipal level to the federal level, in many important roles, I’d like you to comment on what the development process set out in Bill S-233 would involve and what it would look like in practice to bring together all levels of government to develop a framework on guaranteed basic income. I’m thinking there are many different things, like jurisdictional issues and navigating all those issues. Not all provinces get along well together. There are many issues. I would like to get your comments on that.
Mr. Eggleton: There are good examples of where the different orders of government can get together. It happened on the child care program. There are mechanisms for discussions at different levels. One thing I remember that worked particularly well with the three orders of government was on a municipal basis you could determine what the priorities were in the municipality and get a team together that involved people from all levels of government to work towards the solutions to it. If there’s the will to do it, you can find the formula. You can put together the formula to do it. This bill will help in terms of the federal government taking the lead role, but it needs to bring together, of course, the provinces and the municipalities that can design the kind of program that will do what we want it to do to get people out of poverty. There has to be a will to do it, though. That’s what’s important. There has been will before, so it can be done again.
Senator MacAdam: Do you foresee big challenges in getting the provinces to —
Mr. Eggleton: It’s obviously going to be a challenge to get all the right data together and to look at a very complex set of programs and services that are intended to help people deal with poverty and to design a better system. It will take a fair bit of work and should involve all three orders of government in putting it together.
Ms. Alto: Senator, thank you. I think you’ve hit a real critical question. There are two answers.
What you’re debating and considering with the framework tonight is the mechanism, so trying to figure out the most general version of that which allows the greatest flexibility with all orders of government. That’s a challenging job, and I don’t envy that for you.
Once that mechanism is at least scoped in a general sense, I do agree with Senator Eggleton. It is going to depend on your ability to persuade your partners, including partners at the provincial and federal and municipal levels, to buy into that mechanism, at least to start, and to be able to say that we need to try this, and here is one way forward. Let’s try and activate this way forward, and as we move along, we’ll make it better and change it as we need to.
The first step is you deciding whether or not this framework is good enough for you to begin to imagine what that looks like. The mechanism part is easy. The next part will be getting everyone to the table to be able to at least begin to believe that there is a possibility of an outcome that works for everyone.
[Translation]
Senator Dalphond: I’m going to ask Senator Eggleton my question in his capacity as a former senator, not as a former federal minister or former mayor. One of the Senate’s responsibilities is to protect the regions and provinces and enforce the Constitution.
Under our Constitution, all social services are a provincial jurisdiction. The only social program delivered by the federal government is employment insurance, and that’s the result of a constitutional amendment. What you’re proposing here is that all provincial social programs be replaced with a single new program through which the provinces would be told what to do to administer social services, last resort services, student services, minimum wage and the taxation of benefits.
I admit I do understand that some people would like to have a guaranteed basic income, but don’t you think that should be decided at the provincial level and that this isn’t the right place to discuss this? This is an attempt to use Parliament to do something that is not a federal jurisdiction. The Senate is supposed to represent the regions.
[English]
Mr. Eggleton: What we’re talking about here is an income security measure, not all social programs that are needed to support people in our population, particularly those who are low income. There still will be all those programs that are by and large delivered by the provinces. The federal government is supportive of many of these. For example, housing is something that does involve all three orders of government, and the federal government is in a supportive role there. What we’re talking about in terms of basic income is an income security program. With income security, there is a lot of federal involvement in that. There are seniors, for example. There is the Canada child benefit. These are cash programs. These are programs where people are being given money. You still have to work with the provinces on that. The provinces might be quite happy to let the federal government take more control over an income security program, but they’ll want to make sure that they are part of the discussion. Those discussions will be just like the health care plans where the federal government is in a supportive role with the provinces. It allocates money through a system of discussions with the provinces and will need to do that in this case too. But income security is really what basic income is about, not the whole realm of social support systems.
[Translation]
Senator Dalphond: If I understand correctly, you aren’t in favour of eliminating the existing provincial programs.
[English]
I think the study from the Parliamentary Budget Officer is really based on the replacement of many social programs by this kind of universal program.
Mr. Eggleton: I don’t think so. This cannot replace all the social support programs. We’re still going to need housing. We’re still going to need child care. We’re still going to need education. Here the different orders of government obviously have to work together, and the implementation is by and large under provincial responsibility and to a great extent is delivered by municipalities. That would continue. In this case, we’re dealing with an income security program.
Senator Kingston: Thank you both for being here.
I’d like to tag on to a lot of what has been said by the other senators, but my observation has been, over time, that if you’re looking at a program and wondering if it’s going to be effective, there are two things you have to think of about: Is it integrated, and is it comprehensive? Integration speaks to, in my mind, taking all the good things that are happening in each of the provinces and across the country and applying a bit of best practice to some of that. If I’m getting a job, I look at total compensation. I don’t just look at what money actually comes into my account. There are other things. I see those programs that are in the provinces now, with the help of the federal government very often, being part of that total compensation. For instance, if I’m a single mother and need a basic income, I also need quality child care in order to be able to do my job and to able to look to the future and a better career. That’s just an example.
Regarding data, there have been things done around the Housing First philosophy, and we do know that savings are being made there. There’s data to support that. The City of Calgary did a wonderful job of keeping data on their Housing First project and the decrease in the number of emergency visits, the decrease in policing costs and the decrease in brushes with the justice system. Our little city of Fredericton actually replicated that study in a very small project, but they looked at the people who were in the Housing First program and were supported in their housing — you spoke to that — and how over a year there were drastic decreases in the number of visits to the emergency room and so on and so forth.
You talked about the framework being a living framework, Mayor Alto. I’d like your comments. This is a framework. In fact, in the bill itself, it speaks to the other services that will be necessary. How do we produce something that is not just a cheque in the mail but is an integration of a package of programs or a basket of programs that makes a comprehensive support for people who are living in poverty?
Ms. Alto: Thank you for that question. It is a critically important one.
We’ve talked about the framework being something that is supplementary, not in place of. At the same time, it has to be complementary as well. It is going to take some time. If the framework is pursued — and I certainly hope it will be — it is going to take some time to be able to bring together what many of you have referred to before as all the orders of government in some fashion. I loved your example of Fredericton. We did something similar in Victoria. In British Columbia, these programs exist, and they work pretty well, and this is how we know that. Here is all the data. What is missing for a particular cohort of individuals is this particular income supplement. How do we make sure that in providing that, however that looks, it doesn’t detract from all of these other programs on which these people rely for a variety of different things? There has to be a model for some complementary version of integration that isn’t instead of but in addition to. Is it going to be easy? Absolutely not, and I don’t think anyone is foolish enough to suggest that it is. But it’s essential because it can fill those gaps, and it’s the gaps themselves that are sort of keeping people right on the edge of not being able to advance their careers, their families, their future. With this little nudge of this potential additional piece, you will complement all of those other programs you described in your community and exist in mine as well that allow there to be that holistic picture for the single mom with a couple of kids, for the family who has had two breadwinners, both of whom have been laid off for some reason, or all the other things this we can imagine.
It has to go back to something I said earlier. It’s concentrated, it’s organized, it’s complementary and it’s based on what individuals need. Again, not easy. There is that old expression my late mother would say “nothing good ever is,” but it’s absolutely essential. Your question, to a certain extent, challenges us to find that way forward that includes as many different orders of government as possible, at the same time not forgetting we’re trying to figure out how best to serve people.
Mr. Eggleton: Income security is a vital part of the answer, but it isn’t the whole answer. It has to be integrated with all these other things. Child care is very valuable for people to get ahead. If they get a little bit of extra money, it helps them with an education, training, getting a better job, but they still are going to need child care and they’re still going to need affordable, decent housing. Those still have to be key support systems for people in our population, but the scarcity of money in day-to-day living, getting nutritious food on the table and the basic necessities and the kind of stress that goes with that is a big part of this, and that’s why we need a basic income plan. But you can’t forget the other support services.
You mentioned Housing First. There is an example. There is a lot of hard data on that too. There is a lot of hard data that says it costs three to four times to leave somebody on the street than it does to give them decent housing and support services. These are people that if they’re left on the street, they’re in and out of emergency wards and hospitals, they’re in and out of jail perhaps, and they’re certainly in and out of shelter accommodation. There are very hard costs in all of that are easily put together and quantified. The studies indicate that you would save an awful lot of money by having better support services for those homeless people.
The Chair: Honourable senators, this basically concludes the time allotted for Bill S-233.
On behalf of the members of the Finance Committee, to both Senator Eggleton and Mayor Alto, thank you very much for answering our questions. It was very informative. If you want to add additional comments, please do so through our clerk. I say thank you to each of you.
Honourable senators, we will now suspend in order to address our next item before the Finance Committee, which is to take into consideration a draft report on the Main Estimates.
(The committee continued in camera.)