Basic Income Faculty Journal Series Posted on Thursday, August 16, 2018

Basic Income In Canada: What’s in a Name?

Sheila Regehr

Sheila Regehr Chairperson of the Basic Income Canada Network, a retired federal public servant and former Executive Director of the National Council of Welfare.

In the matter of where things stand on basic income in Canada, I find that a great deal depends on how it is named and framed. By clearing away some confusion, I think there is good reason to be optimistic about the success of the movement towards a basic income for everyone in this country.

While all the global factors that are driving renewed interest in basic income play out in Canada, from concerns about technological unemployment to democratic deficits and environmental crises, there are important practical debates specific to our country. Two key debates revolve around whether basic income threatens other social infrastructure like public services, and whether a basic income is too radical or bold an idea for a country that tends towards ‘relentless incrementalism’ (setting aside that when we have gone bold, as with medicare, we have had iconic success).

I want to start with a straightforward policy story in order to contrast it with a more recent and obscure one. In the 1960s, to address very high levels of poverty among seniors, a number of policies were conceived, including forms of basic income. One, a demogrant named Old Age Security (OAS), is a direct cash transfer to individual women and men aged 65 and over, unrelated to labour force participation. For those with little other income there is a Guaranteed Income Supplement (GIS), adjusted for family size (couples or singles), which does exactly as its name indicates. Other measures were designed to help people save for their advanced years, including public pensions and tax breaks for retirement savings.

So fighting poverty was not the only objective—security was, too. But on the key measure of poverty, the results are clear and dramatic. Poverty rates for seniors (aged 65 and over) fell quickly and steadily in the ensuing decades (creeping up again relatively recently) while for the rest of the population (aged 0-64) they have continued to fluctuate around significantly higher levels. Depth of poverty is also far less for seniors than for non-seniors living in poverty, especially when comparing single adults. When universal health care was introduced, seniors received another boost of well-being. This public service and others designed to help seniors stay active and involved were not seen to compete with essential income. OAS and GIS are forms of basic income that are named appropriately and work well.

Now we turn to the 1970s when recommendations were made to provide a guaranteed income to other adults, again largely as a poverty-fighting measure, driven as well by concerns about automation and other factors, like human rights, with gender equality in the mix in relation to women’s non-market work. Senator David Croll, who headed the Royal Commission that recommended a guaranteed income, was not the high profile figure that Martin Luther King Jr. was but his language, sense of values, and rationale were cut from similar cloth. So in Canada, as in the US, we piloted a basic income.

Some of today’s basic income skeptics suggest that Mincome, as it was known, ran for four years then went nowhere because it was just not a feasible idea. Another misguided proposal in the 80s did not help. But the claim that Mincome was not successful, or that the idea is too radical or not feasible bears closer examination and some unmasking. It ended because political winds shifted, not because of poor results. Everything was warehoused without analysis until Evelyn Forget decades later discovered that the results were actually very good and in ways that were unexpected[1]. Researchers are still discovering more. In the meantime, new basic income-type programs have developed, but under different guises.

This second policy story takes place in the mid to late 1990s, when facing public concern about child poverty, federal, provincial and territorial governments embarked on a more coherent, generous way of supporting children, using a model similar to seniors’ benefits, declining proportionately as other income rises. The deal also included additional services, not fewer. Named the Canada Child Benefit (CCB) in its latest iteration, child benefits are delivered through the tax system, are well supported by the public and amounts have continued to increase. There was no public association of this idea with earlier guaranteed income debates.

Whether this feat was due to remarkable oversight or brilliant marketing, child benefits, regardless of the name, are a form of basic income. The amount is not sufficient on its own to escape poverty but it is significant and, at a maximum of over $6,400 per child in 2018, is higher than the Alaska Permanent Fund Dividend. The CCB provides a strong element of financial security and stability to families well up into middle-income levels. The idea of basic income didn’t disappear, it just went underground. Child benefits survived several years of a federal government bent on austerity where tax became a four-letter word. It is almost impossible to talk about basic income without talking about progressive taxation. The federal government currently administers more than 30 direct cash transfers linked to the tax system, although most are very small compared with seniors’ and children’s benefits.[2]

What is most intriguing about the child benefit story is that the naming and framing around children has provided indelible camouflage for the fact that the money does not go to the children. It goes to working-age adults who make autonomous decisions about their labour force participation and everything else. People do not talk about the program that way; it’s all about children. People do talk about whether working-age adults will quit their jobs or drink their income away with a basic income or wonder will it have dire consequences for workers, as if it is all hypothetical. But we now have a generation’s worth of experience and evidence with a partial basic income in the form of child benefits. What we find is the same pattern that basic income pilots reveal everywhere: better physical and mental health, less stress, more investment in children’s education, reduced violence, smoking and alcohol consumption, and better ability to manage work demands in the labor force and at home.[3]Government evaluations show reductions in incidence and depth of poverty. In addition, the Governor of the Bank of Canada has recently credited child benefits as a boon to the economy.[4]

If these working-age adults can be trusted and are doing well, and dire consequences have not materialized, it becomes harder to argue that other working-age adults should be denied a basic income or that these same individuals and families should be denied income security once their children reach 18. And yet, unlike the story of seniors, the naming has obscured reality. This was a case of basic income by stealth. On the one hand we should be grateful because given the times, perhaps that was the only way to do it. On the other hand, to move forward we have to have an open and adult conversation about what is real, what we value, who is left out and suffering, especially single adults, and what we need for the future. Inequality, insecurity and economic instability are affecting an ever-growing share of the population.

The Basic Income Canada Network, formed in 2008, was the first to intentionally draw attention to the fact that Canada has well-established basic income programs. The current federal Minister responsible for the program acknowledges that child benefits are indeed a form of basic income, and it is more widely accepted now in the media and public that this is the case. We are also able to talk about tax again and the need for greater fairness, simplicity and coherence, not that it will be easy. We have a provincial basic income pilot running and others proposed. We are edging closer to a major improvement on the services front with pharmacare.

Given our story at this point I am optimistic that we can understand that basic income is only radical as a departure from outdated, punitive welfare systems, and recognize that boldness and incrementalism are not mutually exclusive given that we are already half way there. We are more ready for the grown-up conversation than we have been in quite a while.

[1]Results included improved physical and mental health and increased high school completion. See, for example, Dr. Forget’s’ article, The Town with No Poverty: The Health Effects of a Canadian Guaranteed Annual Income Field Experimentin Canadian Pubic Policy, Volume 37 Issue 3, September 2011, pp. 283-305.

[2]See David Macdonald’s A Policy Maker’s Guide to Basic Income(October 2016), as well as Out of the Shadows(December 2016) showing how most tax breaks still provide most benefit those in the highest income deciles, both reports from the Canadian Centre for Policy Alternatives.

[3]See for example: Jones, Lauren, Milligan, Kevin, and Mark Stabile, “Child Cash Benefits and Family Expenditures: Evidence from the National Child Benefit,” National Bureau of Economic Research Working Paper #21101 2015.

[4]October episode of ‘The House’ CBC podcast where the Governor of the Bank of Canada stated that the Canada Child Benefit caused Canada’s GDP to go up by 0.5% in 2017.

Sheila Regehr is a founding member of the Basic Income Canada Network, and its Chairperson since 2014. She is also a former Executive Director of the National Council of Welfare, an independent advisory body to the federal government that published the only comparative reports available on Canada’s 13 different social assistance systems, comprehensive poverty profiles, and analytic reports focused on solutions. It consulted across the country with governments and civil society from 2006 to 2012 as provinces, territories and municipalities were developing and undertaking poverty reduction strategies. Its last and most in-demand report was The Dollars and Sense of Solving Poverty.

Sheila’s 29-year career in the federal public service also spanned front-line work, policy analysis and development and senior management.  She was a Canadian negotiator at several United Nations world conferences on gender equality and social development, and chaired UN negotiations on poverty and on unpaid work. Her areas of policy expertise include income security and taxation, such as child tax benefits, the tax treatment of child support, the development of Economic Gender Equality Indicators in collaboration with Statistics Canada, maternity/parental benefits, pensions and social assistance. Sheila’s insight also comes from experiencing poverty herself as a young parent.