Benefits of basic income will be felt by everyone

Posted on April 16, 2017 in Social Security Debates – Opinion/Column
April 14, 2017.   By Robin Baranyai

Ontario is about to embark on a bold experiment in poverty reduction. A pilot project, set to begin sometime this spring, will measure the effect of replacing participants’ welfare and disability benefits with a guaranteed basic income.

The Ministry of Community and Social Services says it will announce details “soon” about which communities will be selected for participation, and how the pilots will be structured. It is taking into account public feedback based on a detailed discussion paper prepared by political strategist and former senator Hugh Segal.

During his nine years as a Conservative senator, Segal was a passionate advocate for a basic income. He found little political will to do more than tinker with existing benefits.

“Over the last quarter century,” he says, “there is probably no area of public policy, in either urban or rural Canada, where creativity and courage from governments have been less evident than on the issue of poverty faced by working age adults.”

Support for basic income is building across the country and abroad. It unites people on both sides of the political spectrum: Quebec MP Guy Caron, a former economist, has made guaranteed income a major plank in his bid for the federal NDP leadership.

A guaranteed basic income would allow recipients to work without having their benefits clawed back. This would remove a major barrier to getting off social assistance, commonly termed the “welfare wall.” Earning too much income, even temporarily, can risk benefits they can’t afford to lose, such as daycare subsidies and dental coverage.

Public resistance to basic income is largely rooted in the notion people who are paid to “do nothing” won’t be motivated to get a job, a supposition Segal says is completely unsupported. “There’s not a scintilla of evidence to back that up,” he told CBC’s The Current in November.

Rather, freeing people from the unremitting stress and “time poverty” of constantly scrambling to make ends meet can give them a chance to better their situation — whether through employment, or upgrading their skills — without constantly proving their eligibility for benefits.

Removing this requirement would introduce a measure of dignity in a process that is both demeaning and administratively burdensome, Segal argues, with nearly 900 eligibility rules for Ontario Works and the Ontario Disability Support Program. As a bonus, streamlining benefits administration could free up front-line workers to help recipients search for decent jobs.

During public consultations, respondents differed on exactly how much the basic income should be; however, there was “strong agreement” it should be enough to lift participants out of poverty. The majority of respondents agreed with the recommendation basic income should be structured as a negative income tax, or refundable tax credit.

This model mirrors an experiment piloted in Dauphin, Man., in the late ’70s, known as “Mincome.”

In a few short years, the community impacts were encouraging. There were fewer hospitalizations overall, and significantly fewer hospitalizations related to mental health. Teens stayed in school longer.

Perhaps most significantly, there was “no meaningful reduction” in labour force participation, except among two groups: new mothers and teenaged boys who opted to remain in school and graduate.

The results are not surprising. According to the Public Health Agency of Canada, poverty is the best predictor of early illness, longer hospital stays and shorter lifespans. It also is strongly tied to food insecurity, substance abuse and poor education outcomes.

Alleviating poverty is more than a moral imperative, it’s sound economic policy. Reduced crime, improved health outcomes and higher educational attainment promote sustainable economic growth. All of Ontario stands to benefit.

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