Basic Income: Rethinking Social Policy

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Oct. 11, 2016

A Policymaker’s Guide to Basic Income

This report assesses two broad approaches to basic income: the universal approach, where all Canadians receive an identical cheque at regular intervals; and a negative income tax approach that is geared to income. Within these approaches, we simulate multiple scenarios in an attempt to determine their costs and likely impacts on poverty.

AUTHOR(S): David Macdonald
OCTOBER 5, 2016
Download:  < https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2016/10/Policymakers_Guide_to_Basic_Income.pdf >  1022.54 KB42 pages

There has been a resurgence of political interest in Canada in the rather old idea of a universal basic income, sometimes called a guaranteed annual income. Essentially, a basic income is a “no strings attached” transfer from government to individuals or families that can be simpler to administer and provide more dignity to recipients than welfare payments and other forms of social assistance. This report simulates various potential basic income models to determine which ones do better at reducing poverty in a cost-effective way.

Specifically, this paper assesses two broad approaches: (1) the one-size-fits-all (universal) basic income, where all Canadians receive an identical cheque in the mail at regular intervals (probably annually); and (2) a negative income tax approach that is geared to income, i.e., the richest Canadians receive nothing and the poorest receive the maximum income supplement. Within these approaches, the author simulates multiple scenarios using Statistics Canada’s Social Policy Simulation Database and Model (SPSD/M) in an attempt to determine their costs and likely impacts on poverty.

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Basic Income: Rethinking Social Policy

Basic Income Compendium: Rethinking Social Policy

In this compendium, the CCPA has brought together over a dozen public policy voices to share their thoughts on the issue of basic income. The contributors have different views on the risks and benefits of a basic income, but all agree that we must not waste this opportunity to put equality and social justice back at the centre of public policy.

EDITED BY: Alex Himelfarb Trish Hennessy
OCTOBER 6, 2016
Download:  < https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office%2C%20Ontario%20Office/2016/10/CCPA%20ON%20Basic%20Income_FINAL.pdf >  475.1 KB62 pages

This compendium offers a wide range of considerations that any government or policy maker attempting to embed a basic income as an objective of their mandate ought to consider. The contributors to this compendium have different views on the risks and benefits of a basic income, but all agree that we must not waste this opportunity to rethink welfare and put equality and social justice back at the centre of public policy.

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Basic income is coming to Ontario: now what?

How do we ensure all Canadians have access to the essentials, have sufficient income, and can live in dignity? CCPA-Ontario director Trish Hennessy and public policy expert Alex Himelfarb challenge us to reframe the basic income debate in this Toronto Star op-ed:

TheStar.com – Opinion/Commentary – Basic income on its own, however designed, will not be enough to eliminate poverty or achieve the other objectives its proponents are pursuing
Oct. 7, 2016.   By ALEX HIMELFARB, TRISH HENNESSY

This month, the Ontario government is expected to release a report by former Senator Hugh Segal mapping the way toward a basic income pilot project and setting the stage for consultations with Ontarians.

The Ontario government defines basic income as “a payment to eligible families or individuals that ensures a minimum level of income.” The pilot is intended “to test the growing view that a basic income could help deliver income support more efficiently, while improving health, employment and housing outcomes for Ontarians.”

From the outset, the idea of a basic income has been mired in controversy in large part because it exposes fundamental differences in our views of justice, freedom, the balance between collective and individual rights and responsibilities, and the role of government.

The idea of an unconditional income guarantee has won renewed favour from proponents across the ideological spectrum, but that also means advocates hold very different views of what a basic income should look like, how generous it should be, whether it should be targeted or universal, and how it should be paid for.

For the province, it will be essential to be clear on the objectives of this experiment and on the bottom line: What are the criteria for measuring success? Is this first and foremost about social justice or about cost saving?

The growing interest in basic income reflects, at least in part, a recognition that the evolution of our welfare state has not kept pace with demographic and economic change and the transformation of our labour market: the impact of technological change on work, the instability of the labour market, and the rise of income inequality, which privileges a few at the expense of the many.

Over the last few decades, Canadian policy makers seem to have viewed the welfare state largely as a “cost,” a threat to balanced budgets and fiscal health. While many countries were testing new social models, our focus was on keeping benefits low, targeting more narrowly, privatizing delivery where possible, and lowering public expectations.

Here’s the challenge: will basic income be a program within the current austerity frame designed to reduce costs and government’s footprint, or does it represent an alternative to that frame, an objective or set of objectives for transforming our welfare state and reinvesting in social justice and greater equality?

A new report by the Canadian Centre for Policy Alternatives looks at eight different ways to deliver a basic income and finds that the most effective and affordable option would be through a federal negative income tax that shrinks in value as incomes rise.

That would make it highly targeted to lower income individuals. It would be unconditional as well as easily and efficiently delivered. But the report also makes clear that basic income on its own, however designed, will not be enough to eliminate poverty or achieve the other objectives its proponents are pursuing.

Critics rightly argue that basic income is no magic bullet, that indeed there are no magic bullets. The history of the idea of basic income shows it’s no passing fad, but translating it into action can easily get mired in the muck of consultations, delays, poor execution or, most likely, inadequate funding.

That said, the Ontario experiment may be just the kind of jolt we need to break the mould; an important opportunity to reimagine the future of social and labour market policy. It gives us a chance to see how income provided unconditionally could give poor Ontarians greater autonomy and the breathing room to find their way out of poverty.

But more than that, it allows us to ask how our tax and transfer system, social services, and labour policies can be made to work together to achieve greater equity and social justice in these changing times.

The basic income experiment forces us to ask the right questions: how do we ensure all Canadians have access to the essentials, that all can live in dignity regardless of job status, that all have sufficient income so none need live in poverty?

Thinking of basic income in those terms, less as a single program and more as a set of objectives for all governments, changes the frame, shifts expectations and gives us a chance to address issues that have been ignored for too long, from the inadequacy and inefficiency of social assistance to how best to ensure a living wage.

In the end, Ontario cannot answer these questions alone. All governments will have to be at the table. But Ontario has an opportunity to lead.

Alex Himelfarb is a former clerk to the Privy Council and is chair of the Canadian Centre for Policy Alternatives Ontario Advisory Board. Trish Hennessy is director of the Canadian Centre for Policy Alternatives’ Ontario office. They are co-editors of Basic Income: Rethinking Social Policy, available at www.policyalternatives.ca

< https://www.thestar.com/opinion/commentary/2016/10/07/basic-income-is-coming-to-ontario-now-what.html?utm_source=newsletter&utm_medium=email&utm_content=Read%20more&utm_campaign=Newsletter%2010/07/16 >

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< https://www.policyalternatives.ca/publications/reports/basic-income  >

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