By Sidney Coles
The idea of a Guaranteed Annual Income (GAI) is once again receiving attention from policymakers and decision-makers at local, provincial, and national levels.
Last Thursday, Victoria City Councillors voted on whether to endorse the Union of BC Municipalitity’s (UBCM) resolution to explore a Universal Basic Income (UBI) in BC. Mayor Marianne Alto, who introduced the motion, acknowledged it was being brought forward as a followup to a resolution that the previous council had made in 2016.
The idea of a universal minimum level of income support for all Canadians was first recommended by the Croll Committee’s report in 1971. A strong case for guaranteed income in Canada was made again in the Macdonald Commission’s 1986 report and in several of its background research studies. The commission itself described its proposals as “radical, not cosmetic, and wholesale rather than tinkering at the margins.”
UBCM plans to bring a resolution to the floor at its next annual general meeting (AGM), urging the provincial and federal governments to implement a UBI, “ensuring everyone has sufficient income to meet their needs, helping British Columbia and Canada lessen poverty and homelessness, alleviating the pressure on municipalities to use their limited resources to fill gaps in our social safe net.”
Victoria council’s motion “follows on some national work that a variety of members of council and staff have been working on” in support of a number of municipal associations boosting a similar provincial program in PEI and looking to the federal funding across the country, according to Alto.
Counc. Marg Gardiner was the sole opposing vote on the motion.
“I believe the case for a guaranteed income has not yet been proved,” she said. “Like many attentive citizens, I followed the Dauphin study during the ’70s.”
As grounds to reject the motion, she cited insider knowledge gained through her late husband’s participation in the Dauphin project, in his role as professor and chair of economics at the University of Manitoba.
“I cannot support the motion due to so many statements within it that are unproven,” she said.
The experiment Gardiner was referring to was called ‘MINCOME’ and was run in the town of Dauphin Manitoba between 1974 and 1979. It was designed by a group of economists who wanted to do something to address rural poverty in the region. Through that program, the average family in Dauphin was guaranteed an annual income of 16,000 Canadian dollars. All the program benefits were indexed to the cost of living. Families with no other income who qualified for social assistance would see little difference in their level of support, but for people who did not qualify for welfare under traditional schemes—particularly the elderly, the working poor, and single, employable males—MINCOME meant a significant increase in income.
In her 2011 study on the Dauphin experiment, “A Town with No Poverty: the Health Effects of a Canadian Guaranteed Annual Income Field Experiment,” Evelyn Forget argued that “the data collection on the experiment lasted for only two years and virtually no analysis was done by project staff.”
Her study showed a direct link between receiving a guaranteed income and improved health benefits, with regional hospitalization rates dropping to 170 visits in 1980 from 235 in 1974. Other results included overall improvements in people’s mental health, and a rise in the number of children completing high school.
Despite these positive outcomes of MINCOME, the real cost of the program was ultimately its downfall. The original budget for the scheme proved to be broadly inadequate. The inflationary price increases of the 1970s, coupled with a larger than anticipated unemployment rate, meant that the proportion of the total going to program expenses exceeded estimates. It was this outcome that many of its opponents latched onto—this and the fact that some who had no income, but were living in well off households, were also eligible.
Beyond cost, Coun. Susan Kim spoke to another criticism often raised of UBI which is that the provision of a guaranteed income will disincentivize people to work.
“One of the debates in the department of political science at UVic that I would sit in on was the merits of UBI. Among leftists, there’s an argument: yes, support people, literally let them live, right? And the other argument is, well, then you’re giving the state an excuse to stop providing welfare programs,” said Kim.
“The way I see it, we’ve kind of already stopped anyway, so let’s go ahead with at least making sure people can pay their rent, afford the food that they need, and then have the knock-on impacts of positive long-term health outcomes for their families.”
The MINCOME was the only experiment to comprise a “saturation” site, meaning every family in Dauphin—with a population of approximately 10K and another 2.5K living in its rural municipality—was eligible to participate in the GAI, regardless of their existing income. At the time, it was the most ambitious social science experiment ever to take place in Canada. Its instigators Derek Hum, along with Manitoba civil servants Ron Hikel and Michael Loeb, originally contemplated a budget of $17M and expected to enroll over 1K families, with Ottawa paying 75% of the costs through a cost-sharing agreement. Ultimately, it was acknowledged that the program was far more costly than anticipated and some saw it as an economic failure.
However, the Dauphin experiment was not the only one launched in Canada.
In 2017, Ontario’s Liberals launched a three-year pilot UBI project in Hamilton that was canceled by premier Doug Ford in 2019, who also cut funding to evaluate the project. An independent survey-based study on the project carried out by labour studies researchers at McMaster University, and funded by the Social Science and Humanities Research Council, showed that the Hamilton basic income project had proven to be transformational. According to the researchers, it was “fundamentally reshaping their [the participant’s] living standards as well as their sense of self-worth and hope for a better future.”
They reported that respondents also saw less frequent visits to health practitioners and hospital emergency rooms, and moved to higher paying, more secure jobs. Over 80% of the group surveyed reported the basic income also had a positive effect on their mental well-being. Most respondents reported being more motivated to find better-paying jobs.
These mixed-costs benefits will all be further considered when the UBCM brings the issue to the floor at its AGM in September. What is less debatable—and adjacent to the issue—is that municipalities are on the front line, responding when their residents are unable to support their own wellbeing. Local governments are pushed beyond capacity to deal with the downstream effects of poverty, putting unsustainable pressure on their limited ability to deliver necessary local public services and social supports. A federal cost-sharing universal basic income may alleviate these pressures.
Victoria council’s motion “follows on some national work that a variety of members of council and staff have been working on” in support of a number of municipal associations boosting a similar provincial program in PEI and looking to the federal funding across the country, according to Alto.
Counc. Marg Gardiner was the sole opposing vote on the motion.
“I believe the case for a guaranteed income has not yet been proved,” she said. “Like many attentive citizens, I followed the Dauphin study during the ’70s.”
As grounds to reject the motion, she cited insider knowledge gained through her late husband’s participation in the Dauphin project, in his role as professor and chair of economics at the University of Manitoba.
“I cannot support the motion due to so many statements within it that are unproven,” she said.
The experiment Gardiner was referring to was called ‘MINCOME’ and was run in the town of Dauphin Manitoba between 1974 and 1979. It was designed by a group of economists who wanted to do something to address rural poverty in the region. Through that program, the average family in Dauphin was guaranteed an annual income of 16,000 Canadian dollars. All the program benefits were indexed to the cost of living. Families with no other income who qualified for social assistance would see little difference in their level of support, but for people who did not qualify for welfare under traditional schemes—particularly the elderly, the working poor, and single, employable males—MINCOME meant a significant increase in income.
In her 2011 study on the Dauphin experiment, “A Town with No Poverty: the Health Effects of a Canadian Guaranteed Annual Income Field Experiment,” Evelyn Forget argued that “the data collection on the experiment lasted for only two years and virtually no analysis was done by project staff.”
Her study showed a direct link between receiving a guaranteed income and improved health benefits, with regional hospitalization rates dropping to 170 visits in 1980 from 235 in 1974. Other results included overall improvements in people’s mental health, and a rise in the number of children completing high school.
Despite these positive outcomes of MINCOME, the real cost of the program was ultimately its downfall. The original budget for the scheme proved to be broadly inadequate. The inflationary price increases of the 1970s, coupled with a larger than anticipated unemployment rate, meant that the proportion of the total going to program expenses exceeded estimates. It was this outcome that many of its opponents latched onto—this and the fact that some who had no income, but were living in well off households, were also eligible.
Beyond cost, Coun. Susan Kim spoke to another criticism often raised of UBI which is that the provision of a guaranteed income will disincentivize people to work.
“One of the debates in the department of political science at UVic that I would sit in on was the merits of UBI. Among leftists, there’s an argument: yes, support people, literally let them live, right? And the other argument is, well, then you’re giving the state an excuse to stop providing welfare programs,” said Kim.
“The way I see it, we’ve kind of already stopped anyway, so let’s go ahead with at least making sure people can pay their rent, afford the food that they need, and then have the knock-on impacts of positive long-term health outcomes for their families.”
The MINCOME was the only experiment to comprise a “saturation” site, meaning every family in Dauphin—with a population of approximately 10K and another 2.5K living in its rural municipality—was eligible to participate in the GAI, regardless of their existing income. At the time, it was the most ambitious social science experiment ever to take place in Canada. Its instigators Derek Hum, along with Manitoba civil servants Ron Hikel and Michael Loeb, originally contemplated a budget of $17M and expected to enroll over 1K families, with Ottawa paying 75% of the costs through a cost-sharing agreement. Ultimately, it was acknowledged that the program was far more costly than anticipated and some saw it as an economic failure.
However, the Dauphin experiment was not the only one launched in Canada.
In 2017, Ontario’s Liberals launched a three-year pilot UBI project in Hamilton that was canceled by premier Doug Ford in 2019, who also cut funding to evaluate the project. An independent survey-based study on the project carried out by labour studies researchers at McMaster University, and funded by the Social Science and Humanities Research Council, showed that the Hamilton basic income project had proven to be transformational. According to the researchers, it was “fundamentally reshaping their [the participant’s] living standards as well as their sense of self-worth and hope for a better future.”
They reported that respondents also saw less frequent visits to health practitioners and hospital emergency rooms, and moved to higher paying, more secure jobs. Over 80% of the group surveyed reported the basic income also had a positive effect on their mental well-being. Most respondents reported being more motivated to find better-paying jobs.
These mixed-costs benefits will all be further considered when the UBCM brings the issue to the floor at its AGM in September. What is less debatable—and adjacent to the issue—is that municipalities are on the front line, responding when their residents are unable to support their own wellbeing. Local governments are pushed beyond capacity to deal with the downstream effects of poverty, putting unsustainable pressure on their limited ability to deliver necessary local public services and social supports. A federal cost-sharing universal basic income may alleviate these pressures.
