A guaranteed basic income could end poverty, so why isn’t it happening?

May 12, 2022

On April 27, Senator Diane Bellemare published an op-ed in the Globe and Mail opposing a proposal for guaranteed basic income where all Canadian citizens and residents over the age of 17 would receive unconditional guaranteed sufficient income.

One recent poll suggests nearly 60 per cent of Canadians support a basic income of $30,000. In another poll, 57 per cent of Canadians agree that Canada should create a basic universal income for all Canadians, regardless of employment.

Despite the strong public support, Bellemare argued that, “A basic income would be an unfair, complicated, and costly way to eliminate poverty.” As a social scientist who has researched cash transfers, and an entrepreneur and organizational leader, we challenge the view that basic income is “unfair”, “complicated” and “costly.” Instead, we argue that it can be fair, simple and affordable.

Basic income can be fair

Basic income can be fair to all Canadians, accommodating people with different needs. A system that includes basic income does not necessarily entail clawing back existing benefits and services.

Importantly, a gradually phased-in, carefully designed basic income program can be monitored and adjusted over time, to ensure that diverse individual needs are always addressed.

Research from Stanford University suggests that a basic income program can inspire meaningful social integration — greater participation in social and civic activities in the community — while also providing individuals with stability, safety and security.

An analysis of Ontario’s basic income trial illustrated that people with diverse needs reported better personal relationships with friends and family with basic income. In turn, their sense of social inclusion and citizenship improved.

The Ontario Conservative government cancelled the Ontario Basic Income Pilot that was initiated by former Ontario Premier Kathleen Wynne’s government. THE CANADIAN PRESS/Nathan Denette

Basic income can be simple

With careful planning, a basic income system could be designed to be simple, adaptable, reliable and fair. In other words, it could be a type of synergistic solution that involves an optimal mix of different policy programs that yield greater efficacy. For example, a basic income program could be combined with a wage subsidy program.

Contrary to Senator Bellemare’s assertion that “basic income would likely hamper participation in the labour market,” research has found that basic income has no negative impacts on the labour market. That is, basic income has no negative impact on employment rates or wages.

With a basic income program, recipients would be motivated to participate in the labour market and feel empowered to discover the most fulfilling way to work without fearing for their financial security.

Basic income can be affordable

Recent cost-benefit analyses have demonstrated that carefully designed cash-based interventions can be cost effective and generate net savings for society. Recipients rely less on social services over time, meaning governments pay less to fund these programs.

While Bellemare’s analysis suggests there could be a cost problem, other, more thorough analyses have taken into account the true costs and benefits of basic income programs and rebuked that claim.

We caution against overly simplistic cost estimates and call for a more careful, thorough calculation of the true costs and benefits associated with of basic income programs. In fact, Canada can adopt a basic income program without increasing its fiscal debt.

Basic income can be a reliable, powerful component of a nationwide program to reduce poverty. THE CANADIAN PRESS/Richard Plume

Last year, the Parliamentary Budget Office of Canada estimated that a guaranteed basic income of $17,000 per individual would cost the government $88 billion.

This amount could be offset by scaling back tax credits that disproportionately benefit Canadians who earn higher incomes. In addition, a well-designed basic income program can provide non-monetary benefits that are typically not captured in cost-benefit analyses, such as improvements in health, education, social cohesion and productivity.

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Read more: Giving people money with no strings attached is good for their health, dozens of studies indicate

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Research supports basic income

There is a considerable amount of research that supports basic income around the world. It is prudent to carry out significantly enhanced research to reduce hesitations on basic income on social and economic grounds. Basic income can be a reliable, powerful component of a nationwide program to reduce poverty and enable all citizens to thrive.

Basic income should form part of a practical comprehensive plan for eliminating poverty in Canada. Indeed, there is emerging political will to push for a national strategy for a guaranteed basic income.

Last summer, Liberal MP Julie Dzerowicz sponsored Bill C-273, the National Strategy for a Guaranteed Basic Income Act. It was the first time a bill about basic income was debated by Parliament. And in February 2021, four senators — three from Prince Edward Island, one from Ontario — published an open letter that called for nationwide guaranteed basic income.

This is essential, because poverty is an unnecessary, cruel abomination. Think of it this way: most Canadians probably have a close friend or family member who is impacted by poverty, since one in 15 Canadians still live in poverty.

Poverty touches us all — it is everyone’s tragedy, which is absurd because poverty can be affordably reduced as we have argued above. Hopefully, one day future Canadians will look back to 2022 and ask how a just society could ever have tolerated such needless suffering.