By: WIL ROBERTSON AND TRACY SMITH.
See original post here.
Basic income is too complex to implement. At least that’s the thinking in the latest release by the Atlantic Provinces Economic Council. Yet data from Statistics Canada demonstrated that changes to the Canada Child Benefit—a basic income program for families—were largely responsible for a nearly four percent decline in poverty from 2019 to 2020.
APEC’s report claims that “the evidence on national, long-term basic income programs is limited,” but we do have significant evidence that negative income tax programs (a form of basic income) are effective.
The Canada Child Benefit and Guaranteed Income Supplement in Canada demonstrate the efficiency and efficacy of providing income security for children and older adults in Canada. There are also reams of global research on the effectiveness of cash transfer programs.
The “work disincentive” argument (that people will stop working if they receive a basic income) also reared its head in APEC’s report, despite evidence that shows people do not suddenly leave their jobs when they receive income support. Robert Gilbert and colleagues in 2018 examined 16 basic income programs around the world and found they had “no substantial impact” on labour market participation.
APEC also points to the Canada Emergency Response Benefit (CERB) to bolster its work disincentive argument. Yet a recent report to Senator Nancy Hartling of New Brunswick debunked the false narrative that the CERB caused mass labour shortages.
Likely the biggest argument levelled against a basic income is that it would be too expensive. The APEC report lays out concerns that implementing a basic income would lead to widespread tax hikes and reductions in government expenditures, threatening its long-term viability.
No consideration is given, however, to the savings that such a program would invariably accrue over time. Sustaining a system of poverty is hugely expensive. Addressing only the symptoms of poverty, as our systems are currently oriented to do, is costly not only in dollar figures but in human lives.
A basic income, if offered at an adequate level to those who need it, could essentially eradicate poverty, with tremendous immediate and upstream cost savings.
The introduction of new taxes could indeed be helpful but only if they target those with excessive wealth. In 2021, the richest one percent collectively owned roughly 30 percent of the wealth in this country, according to researchers James Davies and Livio Di Matteo.
Perhaps now is time to consider options to make our tax system more progressive. Alex Hemingway, in a policy note composed last year, suggested that imposing a modest tax (one percent on net wealth of more than $10 million, two percent on wealth over $50 million, and three percent on wealth over $100 million) would raise $363 billion in Canada over 10 years. Taxing wealth is an area that others are also considering. U.S. President Joe Biden has proposed a “Billionaire Minimum Income Tax” of a full 20 percent for those making more than $100 million. A basic income is not out of the realm of possibility.
There is nothing inherently complex about implementing a basic income program in Canada; we have done it in the past and will invariably need to do so again in the future. Hopefully, for Canadians in the Atlantic Provinces and across the country, this future isn’t too far off.
That future could be closer than most realize. In Prince Edward Island, significant progress has been made towards a demonstration project to trial a basic income, an endeavour supported unanimously by the province’s legislature, including its Progressive Conservative premier, Dennis King. In April, the premier and other party leaders in PEI called on the federal government to help launch the project, but the Prime Minister has yet to agree to move forward.
As the APEC report highlighted, bills C-223 and S-233, introduced by NDP MP Leah Gazan in the House and independent senator Kim Pate in the Senate, call for the establishment of a national framework for a guaranteed livable basic income – in essence to study and determine what a basic income would look like if we were to implement it across the country. If it is, no doubt we will see that basic income is the answer to poverty we’ve been waiting for.
About the Authors: Wil Robertson is a basic income advocate, researcher, and steering committee member for Coalition Canada Basic Income: Revenu de Base. Tracy Smith-Carrier is Canada Research Chair for Advancing the UN Sustainable Development Goals and an associate professor at Royal Roads University