Should a guaranteed livable income should be part of the answer to post-pandemic struggles for working people throughout Canada?
By: David Maher (email@example.com)
Federal New Democratic Party Leader Jagmeet Singh is asking whether a guaranteed livable income should be part of the answer to post-pandemic struggles for working people throughout Canada.
Singh spoke to community organizations in Newfoundland and Labrador through a virtual town hall on Friday to discuss how a guaranteed livable income could help the economy in the years ahead. A later town hall with small business owners in the province had to be rescheduled for a later date.
Singh says the idea boils down to a redistribution of wealth through taxation: make those who have turned profits during the pandemic help those who have borne the brunt of the economic challenges brought on by COVID-19.
“People are worried about the debt and the deficit, they’re worried about how much the pandemic is going to cost. We want to tell people that it shouldn’t be you that has to pay for this. It shouldn’t be people that have already sacrificed that have to make even more sacrifices,” said Singh, in an interview.
“The richest Canadians, the billionaires, have actually increased their profits massively. The wealthiest Canadians got a $37-billion increase in their wealth in this time period. What we’re proposing is, let’s make those at the very top pay their fair share and contribute to a fairer system where we invest in healthcare, where we make sure there’s a social safety net so if you can’t work there’s money and support for you.”
The discussion on Friday was an exploration of the issues surrounding a guaranteed income, not an outline of policy by the federal party.
Singh says such a program would have to complement existing income support programs, like child tax benefits and social security, not replace them.
“The problem is that the supports put in place are not livable, they’re not enough for people to get by on,” said Singh.
“What we want to do is make sure when we help people that can’t work, we want to support families, support moms who have kids, people who are taking paternity of maternity leave, we want the support that we have, the help that we give people, be enough so someone can live and be able to pay their bills.”
On Oct. 28, the provincial New Democratic Party brought forward a private members’ resolution to establish a working group to explore a guaranteed income program in Newfoundland and Labrador. The motion passed unanimously in the legislature, but it doesn’t guarantee such a committee will be struck, due to the non-binding nature of private members’ resolution.
New Democratic Party MHA Jordan Brown explained why the thinks the idea is worth exploring during debate.
“This is why I think a study on this would be so meaningful: we’re a very caring province, we check on our neighbours, we see how everyone around us is do it,” said Brown.
“This is a logical step for us, in my opinion.”
In 2016, Ontario tried a basic income pilot project in a small number of cities with 4,000 people, with the intention of discovering how a guaranteed income of just over $16,000 annually would affect food security, mental health, healthcare usage, and housing, among other metrics. The project was scrapped in May 2019 before the pilot was completed.
However, in Finland a pilot was completed from 2017 to 2018. A guaranteed income was found to have a positive effect on those taking part in the trial, according to a June 2020 report by Kela, a social insurance institution in Finland.
“Survey respondents who received a basic income described their wellbeing more positively than respondents in the control group. They were more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness,” reads the report.
“They also had a more positive perception of their cognitive abilities, i.e. memory, learning and ability to concentrate.”
The report doesn’t conclude definitively that the basic income pilot was the sole factor in the benefits listed, but noted similar experience had produced similar results in other jurisdictions.
A report by the parliamentary budget officer in July 2020 estimated the cost of such a program in Canada at between $46 billion and $95 billion for a six-month period. In Newfoundland and Labrador, the budget officer estimates such a program would cost $487 million and $941 million for the same period.
“On the flipside, I’ve heard from businesses that when the CERB was in effect, they were having trouble getting people back to work. I know there was proposals at the federal level to modify the CERB and not have that clawback – I know that clawback was a hinderance to people returning to work – but it would be interesting to see how it would play out if we could have something effective in place that wouldn’t hinder work or the ability to work or the willingness to work and still inject money into the economy.”
Brandon Ellis, senior manager of police for the Atlantic Chamber of Commerce, says the idea is worth exploring, but the cost and associated tax increases are top of mind for the business community. On the other hand, more money in the economy through the system could be a benefit to business owners.
“The CERB was an interesting case study. One thing we did see is we saw a lot of people spending their money over the course of the pandemic,” said Ellis.
“On the flipside, I’ve heard from businesses that when the CERB was in effect, they were having trouble getting people back to work. I know there was proposals at the federal level to modify the CERB and not have that clawback — I know that clawback was a hinderance to people returning to work — but it would be interesting to see how it would play out if we could have something effective in place that wouldn’t hinder work or the ability to work or the willingness to work and still inject money into the economy.”
Mark Nichols, co-chair of 15 and Fairness NL, advocates for increasing the minimum wage in Newfoundland and Labrador as an anti-poverty strategy. He says he’s intrigued by the notion of a guaranteed income and wants to see it explored, but he hopes it isn’t seen as a single solution to the complex issues faced by those living with poverty.
“I think too many people see it as this magic pill that’s going to make poverty go away. That’s simply not the case,” said Nichols.
“If we just put more money in people’s pockets and say there you go, you now have enough to live on. Once capitalism knows people have extra money in their pockets, they’re going to find ways to get at that. If you don’t have an affordable housing strategy, do some stuff around rent controls, you know, that amount of money in people’s pocket would continuously need to go up. You need to be careful about it in how its designed.”