Guaranteed Livable Income
Inquiry--Debate Continued
March 11, 2020
I decided to speak to Senator Kim Pate’s inquiry not because I’m an expert on the highly technical subject of a guaranteed minimum income, but because I have personally observed some of the unintended consequences of our income support policies. Furthermore, poverty is very costly for our society from the human standpoint and from a mental and physical health standpoint. Statistics Canada recently released a study showing that income inequality is linked to the premature death of 4,000 Canadians a year. That’s equal to 110 Canadians dying prematurely each day just because they’re poor. It’s heartbreaking. We need to keep an open mind and promote innovative solutions.
I’m involved with a food bank in Pointe-Saint-Charles, an inner city neighbourhood in Montreal where I meet people who depend on these free groceries to make ends meet. I see sadness, resignation and some embarrassment in the eyes of these disadvantaged people, who are often grappling with complex problems. They are typically on welfare. The following quote from a food bank user reflects the general feeling of frustration:
With the money I get from welfare, once I pay the rent, I have a little over $80 left to pay for my phone, transportation and food. How am I supposed to eat well on so little?
The situation is critical for single people and childless couples who live on last-resort benefits. This is because, over the past decade, family assistance has been increased in all manner of ways, but this isn’t the case for the monthly basic benefit for single people with no limited capacity for employment, which is $690 a month.
This isn’t just the reality in Quebec. From March 2018 to March 2019, almost half the users of food banks in Canada were single people. That’s a record; in 2010, only 38% of food bank users were single people.
In Quebec, if welfare recipients can manage to find temporary employment and earn more than $200 a month, an amount is automatically deducted from their cheque. The rigid rules of this last-resort assistance thrust recipients into the vicious circle of poverty and dependence because the benefits are not enough to live on but any attempt to find a little job to live more comfortably is punished immediately. Why do we accept that these meagre amounts earned by the very poor are taxed at 100% when the income of the very wealthy is taxed at 50%?
That’s why a guaranteed livable income is such a promising idea. Returning to the workforce is a tough step to take for many vulnerable people, who fear losing their safety net before they’ve regained their self-confidence. However, we have to be fair to lower-income workers who are also going through tough times. They too should be able to rely on some form of basic income or another, or a better work allowance in order to make ends meet. Balance and fairness between the different forms of assistance are difficult to achieve.
How can all that inform the debate on the need to support the implementation of guaranteed livable income initiatives? In every province, programs designed to help families and individuals constitute a complex architecture of inter-related income support mechanisms to which federal programs are being tacked on.
Given the division of powers between the federal government and the provinces, and especially the particular complexities of the various provincial safety nets, it seems unrealistic to me to imagine that overnight we could bring in an adequate guaranteed livable income with no strings attached for all Canadians from coast to coast to coast. It’s more pragmatic to look at the programs that come close to the concept of a basic income and try to go from there, programs like Old Age Security, the Guaranteed Income Supplement, and the Canada Child Benefit.
Nearly 9% of Canadians, some 3,200,000 people, were living below the poverty line in 2018. This lack of money affects every other indicator, including health, education, family and access to justice. For those who believe in a more equitable society, a guaranteed minimum income is a source of hope. One-third of all income growth benefits just the 1% who are already wealthy. The labour market is in complete upheaval and some people are falling through the cracks.
We need to start considering a guaranteed livable income, and Finland’s pilot project has gotten the world dreaming. For two years, from 2017 to 2019, 200 unemployed workers participated in a universal income initiative. They received $860 per month, no paperwork required, and this amount was not reduced if the individual returned to work. The experiment, which was not extended by the government, was too short to be conclusive. According to initial assessments, the participants showed fewer symptoms of stress, less difficulty concentrating and fewer health problems. Overall, however, the participants did not show increased employment rates compared to the control group.
A similar project conducted in Ontario in 2017 also came to an end too soon. For two years, 4,000 underprivileged people received a guaranteed annual income of $17,000. According to a survey of 217 recipients, three-quarters of those who had a job at the beginning of the program continued to work. Half of those who left their job went back to school in the hopes of earning a better living. Participants said they were in better health, less anxious and less depressed. More than half reported an improvement in their housing situation, and three-quarters said they were eating healthier.
These are encouraging indicators, but we still don’t know the more long-term effects of a guaranteed minimum income for the most underprivileged.
I want to come back to the decisions that were made in Quebec, the society that I’m most familiar with. To date, Quebec has taken things step by step. In 2017, a Quebec panel of experts on guaranteed minimum income rejected out of hand the idea of fully implementing a guaranteed basic income program. According to panel members, reform would be too costly and unfair and could discourage people from working.
The advisory group recommended improving the existing system to address issues. For example, it suggested making a single payment comprising welfare payments, the solidarity tax credit and an enhanced work allowance, as well as additional coverage for those going through a transition who aren’t eligible for welfare.
Sylvie Morel, an economist at Université Laval, says that a universal benefit would certainly help remove the stigma of being on welfare. However, she also wondered if some public services and programs could be cut to cover the cost of a universal livable income. Would Quebec’s network of affordable child care centres and the availability of social housing be compromised?
Here’s an interesting approach. In 2018, as part of its strategy to end poverty, the Government of Quebec passed Bill 173, a good example of a guaranteed livable income. The idea was to increase welfare benefits significantly for 84,000 people with a severely limited capacity for employment. For people with disabilities, payments are going up by 40% over four years to $18,000 in 2023, which corresponds to a basic standard of living based on the market basket measure. An inheritance or employment earnings would not affect the guaranteed income. François Blais, who was the minister of employment and social solidarity at the time, explained the purpose of the bill as follows:
The cheques will be individualized . . . . We recognize that it’s a lot more difficult for them. If they go out into the workforce and try to earn a little income, on a part-time basis, they’ll be able to keep more of that income than they can right now.
What is truly innovative is that this benefit will be paid to each person on an individual basis, regardless of his or her family status, in other words, regardless of the spouse’s income, which is in keeping with a guaranteed livable income. This will help prevent isolation among beneficiaries. It could therefore be described as a universal, categorical benefit intended for people who, obviously, have the most difficulty finding employment.
As a final comment, the Senate is at its best when reflecting on long-term solutions to complex social issues. It is therefore entirely appropriate for the upper chamber to support, examine and assess the implementation of guaranteed livable income initiatives, because poverty cannot be comprehended solely through the calculations and equations of learned economists.
Poverty also undermines the dignity of human beings. Programs of last resort, as designed, give rise to biases against those who are poorest. I’m also concerned that there will be more and more disadvantaged people struggling with mental health issues who will fall through the cracks in a complex and bureaucratic system. Consider the rising rates of autism spectrum disorder, for example.
The humanity of a society is measured by how it takes care of its most vulnerable members. Thank you.