‘Poverty is expensive’: Toronto doctor says universal basic income actually costs society less
By Kamyar Razavi & Mike Le Couteur Global News
One of the pillars of the federal government’s coronavirus response — the Canadian Emergency Response Benefit, or CERB — is leading to calls for a permanent basic income support program in Canada.
Jessie Golem, a Hamilton, Ont., resident, is among those championing such an initiative. Golem was part of a pilot project in Ontario three years ago that provided income support to 4,000 low-income earners in several communities across the province. The pilot was only in place for a little over a year before it was abruptly cancelled by the government of Premier Doug Ford.
Golem told Global News’ The New Reality about having to work 60 to 80 hours a week prior to receiving the provincial government basic income.
“I felt very stuck and kind of trapped in this situation, where I just sort of had to keep on working in order to survive in the hopes that in the future it would get better,” she says.
She said the basic income pilot allowed her to stop working at multiple dead-end jobs, and to start her own business instead.
“I was actually finding that I was making more money than I was before, when I was cobbling together those jobs, and stressed and depressed.”
Golem has now become a vocal advocate for basic income in Canada.
Basic income is a ‘lifeline’
Ottawa launched the CERB, which provided $2,000 a month to nearly nine million Canadians left jobless by the pandemic, in April. The initiative has paid out slightly over $80 billion.
In September, CERB recipients transitioned to an updated Employment Insurance program. A basic income scheme would be more inclusive than CERB, offering relief to anyone whose income fell below a given threshold, regardless of their employment status.
Despite its cost, CERB was remarkably popular. That popularity has led to a renewed push to adopt a basic income.
There have been two previous iterations of a basic income scheme in Canada. The most recent was Ontario’s Basic Income Pilot Project, launched by the former Liberal government of Kathleen Wynne.
Golem says that the set income she received through that program, far from being an excuse not to work, as critics allege, allowed her to find the time and energy to pursue her real passion — starting a photography business.
“If the pilot hadn’t been cancelled, I’d be a full-time photographer right now,” she says. “And would that not have been a better economic impact?”
Even though the Ontario pilot was in place for a short time, researchers at McMaster University in Hamilton were still able to complete a survey of over 200 participants who had enrolled in the program. The researchers found notable improvements in a variety of health outcomes, and in a majority of the respondents.
The authors found, “many recipients reported improvements in their physical and mental health, labour market participation, food security, housing stability, financial status and social relationships.”
They also found recipients used health services less frequently.
Overall, 79 per cent of respondents said they felt a partial or substantive improvement in their health.
And when it came to work, the survey found that “the majority of those employed before the pilot reporting working while they were receiving basic income. Many reported moving to higher-paying and more secure jobs.”
After the Ford government broke its promise not to cancel the program, Golem posted a message on social media, and subsequently tracked down 70 other participants, whom she then photographed for a series called “Humans of Basic Income.”
The images capture people from all walks of life explaining how basic income transformed their life. “I found that people were using basic income similarly to me. They were starting up businesses. People were going back to school to get a better job and better education.”
Basic income could address systemic inequities
The coronavirus pandemic has exposed and perpetuated many social and health inequities in Canada, including systemic racism, chronic poverty, and homelessness.
Offering a basic income to those in need, supporters of the initiative say, is a major way of addressing some of the many barriers that people, especially Black, Indigenous and other racialized Canadians face.
“This is especially important because racialized communities and families are more likely to live in poverty, and are more likely to have precarious employment,” says Dr. Naheed Dosani, a Toronto-based palliative care doctor who works with that city’s homeless population. “It goes without saying that living in poverty is very expensive,” he adds.
The ‘Mincome’ model
One of the very first basic income trials happened in Canada, 50 years ago in Dauphin, a tiny farming village in Manitoba.
The town, situated roughly 300 kilometres northwest of Winnipeg, had enough people to provide an adequate sample size, but was not too big to make the research too expensive or unwieldy.
Evelyn Forget, a professor at the University of Manitoba, was a student when she first heard of the program. She was captivated, and chose to become a health economist.
In 2008, over four decades after the now-famous social science experiment in Dauphin came to an end, Forget decided to take a closer look at its findings. She pored over the decades-old data and published a report. Among its key findings were a significant decline in hospital visits, improvements in mental health, and a lower high school dropout rate.
Forget says the whole point of the experiment was to find out what people did with the money, and whether they would continue to work.
“For most people, there was very little impact on work effort,” Forget said. Basic income, she says, was actually an incentive to do better at work. “We have to start thinking about investing in things like basic income as investments rather than expenditures.”
Now, members from three federal parties are advocating for a basic income scheme in Canada.
“There is a missing middle of working Canadians that are being left behind,” says Nate Erskine-Smith, the Liberal Member of Parliament for the riding of Beaches-East York in Toronto. “We need to re-invent, and, I think, repair our social safety net so that no one is left behind.”
NDP MP Leah Gazan has put forward a motion that the CERB be turned into a permanent livable basic income.
However, the prime minister is rebuffing those calls, saying in a virtual town hall on Wednesday that basic income is “not something that we see a path to moving forward with right now.” Instead, Trudeau pointed to other income support programs, like the Canada Child Benefit, that are already in place.
Not a ‘cost,’ but an ‘investment’
Canada’s Parliamentary Budget Officer estimates running a basic income scheme for six months nationwide would cost anywhere between $47 billion and $98 billion.
The sticker price of a basic income program has always been a detractor of the program.
Critics aren’t necessarily concerned about its upfront costs. Instead, they say that an appropriate basic income program must replace other welfare programs in order to provide true savings.
Conservative MP Pierre Poilievre has called Ontario’s scheme “the welfare state on steroids,” alleging that the shuttered program did nothing to eliminate red tape.
Proposals for a basic income scheme in Canada would not give money to everyone — that would be hugely more expensive. In the United States, former Democratic presidential candidate Andrew Yang was proposing a form of universal basic income that would go to all Americans.
The Canadian proposal would only support individuals whose income falls below a certain threshold. “This isn’t about sending cheques to everyone,” Erskine-Smith says.
Similar schemes have been implemented in recent years in Finland and Spain.
“They show improved health, improved wellbeing,” says Sheila Regehr, of the Basic Income Canada Network, of the various basic income trials that have been run around the world.
“What a basic income does is provides a foundation from which people can grow and launch and get on with their lives,” she says.
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