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When Prime Minister Justin Trudeau gave his ministers their marching orders shortly after taking office, he instructed Families, Children and Social Development Minister Jean-Yves Duclos to make relieving poverty on a national scale a top priority. But did he mean for that to eventually take the form of a basic income guarantee?
A basic income guarantee is known by many names, including a guaranteed annual income, a minimum income and a negative income tax, among others. But the essence is that it ensures everyone an income that is sufficient to meet their basic needs, regardless of work status. It provides a direct cash transfer to the people who most need economic security. The policy has fans across the political spectrum, with some intrigued at the premise of eradicating poverty and others enamoured with the idea of eliminating massive bureaucracies, such as the welfare system.
Minister Duclos, an economist by training, signalled strong support for a basic income guarantee in a 2008 Institute for Research on Public Policy brief. The essence of his proposal was to replace all existing tax transfers, allowances and social assistance “with a basic income transfer, which would be available to all working-age Canadians but whose net value would decline with rising levels of income.” This new basic income would be federally financed and administered through the personal income tax system.
This is a policy that was tested in Canada in the 1970s, in the small town of Dauphin, Man. Its success was later documented by researcher Evelyn Forget. While issues like “living wages” are currently getting most of the media play, a basic income guarantee is quickly catching up in the public consciousness. For instance, the current Liberal government in Prince Edward Island, which was elected earlier this year and led by Premier Wade MacLauchlan, went so far as to call for a model program and promised to “build in a commitment to evidence-based research and action-based research.”
From the province that brought us health care, Saskatchewan Premier Brad Wall’s government is currently considering its own poverty task force’s recommendation to set up a basic income to help stamp out poverty. The Canadian Medical Association and Ontario health units also like the idea of a basic income.
Basic income is on the radar of Canada’s mayors, too, who often see the effects of poverty firsthand in their communities and are asking for new tools in order to create real change. In fact, no less than nine provincial and territorial capitals have spoken out in favour of the policy.
Internationally, countries such as Finland and the Netherlands are currently setting up pilot projects to measure the impact a basic income would have.
For his part, Duclos is currently trumpeting the federal Liberals’ new enhanced, progressive Child Tax Benefit, which is certainly a form of basic income — as is Canada’s Old Age Security system, at the other end of the age spectrum. What’s missing is secure coverage for everyone in between.
In a radio interview with Evan Solomon earlier this month, Duclos didn’t commit to a basic income policy when asked directly about it, but neither did he rule it out. Instead, he said that “if ever it were implemented, we’d need some strong cooperation with the provinces.”
Last year at a federal Liberal policy conference, two resolutions were passed by the delegates. One resolution called for testing this basic income approach, the other for full design and implementation.
As Duclos works towards lifting hundreds of thousands of Canadians out of poverty, he would do well to revive his own thinking on this issue and get the ear of his prime minister, as this is a policy that would not only help to eliminate poverty, it is also a solution for a staid economy, because it would increase the spending power of low income Canadians.
— Roderick Benns is the publisher of Leader and Legacies. This article originally appeared in the National Post here.