By Emily Blake
Alternatives North is advocating for the NWT government to introduce a basic income guarantee program, which it says could eliminate poverty.
The Yellowknife-based social and environmental justice coalition released a report on Tuesday outlining a delivery model for basic income guarantee in the territory.
Under the proposed program, eligible residents would receive an unconditional transfer payment – a sum of money you can rely on that tops up your income to a fixed amount, based on the region where you live.
Alternatives North said such a program would ensure everyone in the territory can meet their basic needs and live with dignity and security.
“The high cost of living is often seen as a problem with prices, which is obviously part of it, but we have to look at the other side of the ledger too, to the incomes that people have. That’s where a basic income guarantee comes in,” said Suzette Montreuil of Alternatives North.
“It would be an upfront investment that provides a truly stable foundation for all residents of the NWT.”
Estimated costs and benefits
The report was prepared by PlanIt North and economist Michel Haener with assistance from Evelyn Forget, a professor at the University of Manitoba.
The authors recommend that the NWT government replace income assistance with a basic income guarantee for five to 10 years. They said a 10-year pilot is preferred as it would ensure generational impacts are measured.
The report estimates implementing the program would cost between $58.9 million and $138.3 million a year based on four delivery scenarios. Most new funding for the program could come from the federal government under a cost-sharing agreement with the territory, the authors said.
The report said the cost would be offset by an estimated $6 million in savings from cutting the administration of income assistance, as well as up to $32 million in additional rental income to Housing NWT.
Additional positives would include improved health outcomes, reduced use of the healthcare system, positive impacts on child development, crime reduction, an improved workforce and cultural revitalization, Alternatives North said.
How would the program work?
Under the proposed program, residents over the age of 18 would receive transfer payments if they have lived in the NWT for at least a year and if their income is less than their regional market basket of goods, a measure of poverty used by Statistics Canada based on the cost of a basket of a goods that represents a basic standard of living.
Those payments would be distributed equally among adults in a household.
The report states that recipients would not pay income tax on the amount they receive and it would neither limit nor complicate their access to benefits and support from other programs.
In response to concerns that a basic income guarantee could disincentivize some people from working, the report explores four potential delivery scenarios.
It recommended a program that provides payments up to 100 percent of a person’s regional market basket measure with a 50-percent reduction rate, meaning the amount of the payment that is reduced for each dollar earned in income. That scenario, estimated to cost $138.3 million a year to implement, was considered the least likely to create “a welfare wall” or discourage increased earnings.
Alternatives North said the NWT is an ideal location to implement a basic income program. The report highlights the high cost of living in the territory among other factors that contribute to poverty, such as low education levels, housing issues, and intergenerational trauma from colonization and the residential school system.
The group pointed out that the federal and NWT governments have committed to reduce poverty by 50 percent by 2030 relative to 2015 levels.
Releasing a poverty report card in 2020, Alternatives North said the territory was failing at poverty reduction. That report found a quarter of children and at least one in five households lacked the financial means to achieve a standard of living.
Statistics Canada found more than 17 percent of NWT households were living below the poverty line in 2022 according to the northern market basket measure, and nearly 28 percent of people lived in a household that experienced food insecurity.
Political support needed
Alternative North’s proposal requires support from both the NWT and federal governments for a basic income guarantee to become a reality in the territory.
Montreuil said all NWT MLAs had been sent a copy of the report and several had expressed support. She said she hopes the proposal will be discussed in the legislature and considered by the NWT government.
“I think it’s quite favourable to the NWT and it would be great to see them implement it,” she said.
While some MLAs in the previous Legislative Assembly supported trying basic guaranteed income in the NWT, cabinet said it had no plans to explore such a project.
At the federal level, as the upcoming election looms, Alternatives North’s Ben McDonald said some parties “may be more predisposed” to support such a program. Rolling out the program would require political backing no matter who is in power, he said.
“One of the alluring things about this proposal is it really is about simplifying social supports. It’s about reducing administration and ultimately reducing administrative costs to government, and that’s something that would be alluring across the political spectrum,” said Christine Wenman, a planner with PlanIt North.
Alternatives North said beyond political support, further work is needed to refine a delivery model, confirm costs and benefits, establish a monitoring program and engage with Indigenous governments and the public.
The group added that a basic income guarantee alone will not address poverty challenges residents in the territory face. Alternatives North called for expanded integrated service delivery, programs that address addictions and wellness, and adequate housing among other supports.
