Most Canadians living in poverty are not sitting around, says a retired Conservative senator – they are actually working. They’re just not earning enough to adequately get by.
That’s a problem for Hugh Segal, who has spent over 40 years in pursuit of a basic income guarantee policy for Canadians.
“There is no evidence that people living beneath the poverty line in Canada won’t choose to work” with a basic income guarantee. “In fact we know that about 70 percent of people who happen to live beneath poverty line are working —they just don’t earn enough.”
Segal says some people have two jobs, given the precarious nature of work, as they try to balance various commitments of part-time hours. With a basic income guarantee, a simple assessment at tax time would ensure they would be brought up to the poverty line, complete with tax incentives to keep people working.
“It has to be structured as a top up – that’s the way to make it work well.”
When he considers provincial welfare systems, Segal is adamant they need to go.
“Most welfare programs make it impossible to work. If you earn more than $200 a month and receive welfare in Ontario, for instance, they start clawing money back. There are so many disincentives to work,” he says. “With basic income, it’s an automatic top-up of a basic amount to live.”
While the federal Conservative government created the work Working Income Tax Benefit, which pays benefits to single persons and families, including an additional amount to working people with disabilities, Segal points out it’s poorly funded. In 2012 the benefit sat at a maximum of $970 for a single worker per year ($1,762 for a family) and gets cut off at the net income of $17,478 (or $26,952 for a family).
According to Statistics Canada, Canada has one of the highest proportions of low-paid workers among similarly industrialized countries (25%). This is higher than in European countries and similar to the American rate.