Do You Support a Guaranteed Basic Income Program?

Canada has quite a good system of helping to reduce poverty in our senior citizens.  OAS is payable to most.  GIS is available for low income seniors. Plus, every province and territory has a variety of support programs.

But what about a guaranteed minimum income amount for all adults?

This idea is not new. Every ten years or so there is renewed interest in the concept. This recent CBC article makes a case for universal basic income and claims the current Covid-19 pandemic underscores that the need is stronger than ever.

A group of activists from Basic Income Canada Network is currently trying to drum up support for providing every Canadian with a minimum income of $22,000.

Basic Income posters

Basic Minimum Income is a guaranteed, unconditional payment made to all eligible residents. The claim is that had it been in place before coronavirus, it would have provided an immediate automatic income top-up that would have been less complex than all the various income subsidy programs being put in place now.

A basic income program is something to fall back on and give people time to figure out what they need to do next.

Advantages of basic minimum income

The proponents of a guaranteed minimum income state that it is a superior way of stabilizing people’s income and reducing poverty.

  • It would keep administration costs to a minimum by eliminating all other social assistance programs, such as unemployment insurance, disability payments, welfare, OAS and GIS, as well as Child Tax Benefits and GST/HST rebates.
  • “Frees up people to pursue what creates more meaning for them.” (Daniel Straub – The Liberation of Switzerland).  In other words, unleash the potential to pursue personal interests and inspire creative thinking for innovations.
  • Give people some financial independence and control.
  • Increase the flow of money back into the economy – housing, food, and clothing.
  • Social justice problems (read crime and homelessness) associated with poverty would be diminished.

As the coronavirus pandemic has revealed, low- and modest-income workers from grocery store clerks, cleaners, care workers, and volunteers (who are all mostly women) make a largely unrecognised contribution that is nevertheless crucial to the functioning of society.

Disadvantages of basic minimum income

The biggest barrier is negative stereotypes about poor people – “Whatever happened to earning a living?

When my mother (who, unlike many of her generation, had worked at paid employment since she was a teenager) became eligible for OAS payments she was incensed that her neighbour (a life long stay-at-home housewife) also received the same amount.  “I’ve worked all my life and she just sat at home!

In our culture we’re brought up to believe that in order to survive you have to work.  There are strong feelings that we shouldn’t give people money for nothing.  They’d probably just spend it on booze and cigarettes.

Other objections:

  • Payments might discourage recipients from looking for a job – those lazy ne’er-do-wells.
  • It would require a massive amount of money that would have to come from tax adjustments.
  • Low-paying, low-status jobs would be expensive to fill.
  • Current workers may leave the workforce and rely solely on basic income “hand-outs.”
  • Lazy, greedy people would just abuse the system.
  • Who will work if we’re giving away money for free?

A social experiment

In a labour market experiment, for a four-year period (1974-1978), the poorest families in Dauphin, Manitoba were granted a guaranteed minimum income.

The government thought it would become a universal program, but the idea eventually just died off.  It came to a quick halt when an economic recession hit Canada causing prices to increase 10% each year.

All that remains of that experiment are hundreds of boxes of unanalysed documents in a warehouse, collecting dust.

The university study

Professor Evelyn Forget of the University of Manitoba unearthed some of the government documents and performed her own analysis.  She found that the unemployed had more opportunities to find work better suited to them rather than taking the first job that came along.

Only two segments worked less – new mothers who wanted to stay home longer with their babies, and teenagers who, under less pressure to support their families spent more time in school, resulting in more graduates.

She also discovered an 8.5% decrease in hospital visits with fewer work-related injuries, accidents, domestic abuse, and mental health problems.

In today’s terms, an 8.5% decrease in hospital visits across Canada would save the government over $4 billion annually … the amount (they are) currently trying to save by slashing social programs and arts funding.”

Her conclusion was thata guaranteed minimum income program is a superior way of delivering social assistance.

The bottom line

In theory, the concept of a guaranteed minimum income sounds good.  In practice, I think about our government bureaucracy.

Plans to reduce extreme poverty are commendable but difficult to implement successfully. Plus, it’s not without controversy.

Can our federal and provincial governments come together and agree on the administration of such a complex plan when their usual response is the quick fix (like when they raised the eligible age for OAS a few years ago but then cut certain benefits)?

Is it feasible?  What kinds of tax policies and adjustments would be required to support it? There are no systems on earth that can be completely equitable and effective at the same time, especially when the consensus seems to be that people should be responsible for themselves.

How do you feel about a guaranteed minimum income?

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4 Responses

  1. Craig James says:

    GBI is a bad idea. Government policies should create an environment in which people are always trying to achieve more in their lives, not settling for a minimum existence. What happens when the GBI voter base can raise that minimum through voting power. The few supporting the many is not sustainable.
    Fact check; what % of total population pays income tax? This minority would shrink even more with GBI.

    • Marie Engen says:

      Hi Craig. Thanks for your comment. You are obviously on the “anti” side of this controversy. But to be fair, I don’t think it implies settling for a minimum existance. It would replace the many social programs we already have. Sure there are people who abuse the system now and that probably wouldn’t change. $22,000 is not a great amount to live on. Most of us would want a heftier income than that to live the lifestyle we want and would strive to increase it over time, as people tend to do. Plus a lot of us like our jobs. The main problem is how much would it cost and how would it be subsidized? Fun fact: Switzerland put this to a vote a few years ago and it was shot down by over 70%.

  2. To answer your question directly, I’m in favour. The Liberal government repeatedly asserts that they make evidence-based decisions. While I think their decision-making is generously salted with ideology, the evidence seems to suggest that a Guaranteed Basic Income is more efficient, will reduce poverty and homelessness, and will ultimately save significant sums of money for governments at all levels. While some may be content with living on the basic income alone, I suspect most people will try to improve their lot in life. I wouldn’t be surprised if it actually improved our economy dramatically. People who have a good idea or a vision may choose not to pursue it because it means giving up a secure job. But, if would-be entrepreneurs know that they are “backstopped” to a degree, the freedom to take financial risks will improve. And just maybe, low-paid “essential” workers will receive an income that is more commensurate with their roles in society. Thanks for raising the subject.

    • Marie Engen says:

      Thank you Russell for your well formulated argument for GBI. I agree and couldn’t have said it better. It would also reduce the redundancy of all our current federal and provincial social assistance programs and their varied income testing. But getting all the governments on board and in agreement would be a daunting task.

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