Basic income remains the best public service


By Robin Boadway and Roderick Benns

As basic income policy gets more press as a way to drastically reduce poverty, inevitably there will be those who seek to preserve the status quo approach. This has served us inadequately for many years and yet there are some believers who remain. These same believers often seek to create false policy choices, as Armine Yalnizyan has done in her recent offering to the Star, Basic income? How about basic services?’

Yalnizyan, unfortunately, offers nothing new. She dismisses basic income of the universal sort recently put to a referendum in Switzerland on the grounds of cost. Very few advocates, least of all Hugh Segal who is providing advice on design and implementation of a demonstration pilot in Ontario, are proposing such a system for Canada. She then argues that a basic income of $15,000 a year would make many low-income seniors and some low-income families with children worse off. This would be true if the $15,000 replaced all benefits currently obtained from Old Age Security and Guaranteed Income Supplement and the Canada Child Benefit. However, such a problem is easily overcome with a thoughtful and progressive policy design.

From that she suggests, with no justification that the focus of basic income should be solely on provincial welfare and disability recipients. She dismisses providing recipients of a basic income an amount of $15,000 per year (which would be not too much more than what welfare in 1993 would be worth today). She argues that a worker, given the choice between a basic income of $15,000 and working 25 hours per week at minimum wage, would choose not to work. This presumes that the basic income would fall to zero for such a worker, which would not be the case for a program in which basic income is income-tested — like a negative income tax or a refundable tax credit system. There is every reason to think this is the model being pursued in Ontario, and it’s the one most talked about across Canada.

At the federal level, Jean-Yves Duclos, federal minister of families, children and social development, has stated that a guaranteed minimum income is a policy worthy of discussion, opening the door to possible federal involvement. As well, at the party’s national convention just held in Winnipeg, the resolution states the party will, in consultation with the provinces, “develop a poverty reduction strategy aimed at providing a minimum guaranteed income.”

From a municipal level, no less than nine provincial and territorial capital leaders support basic income or at least pilot projects, with innumerable smaller city and town mayors across the nation declaring their support as well.

Yalnizyan also writes that to raise everyone to the poverty level would require at least $30 billion a year. This is about half of the value of all non-refundable tax credits that could contribute to financing basic income. She suggests that such a sum could be put to use enhancing public services, and that this would somehow benefit everyone and be easier to see in an era of low growth.

In other words, she implies that making more public services freely available reduces the need for income. In some sense it does, but free pharma care, dental care, post-secondary education, and community and recreational programming does not provide adequate food, clothing or shelter. If faced with an either-or choice, we would rather ensure that people can afford the necessities of life than be given free public services.

However, a basic income is not mutually exclusive with public services nor a substitute for them. This is a false policy choice. Those without enough money for adequate food surely cannot be expected to eat sidewalks, dine on their tuition costs, nor consume new recreation centres.

— Robin Boadway is an economist at Queen’s University and is the former editor of theJournal of Public Economics. Roderick Benns is the publisher of Leaders and Legacies, a social purpose news site helping to lead the basic income discussion in Canada.