On September 10 Maytree convened a group of key thinkers from policy, government, advocacy, labour and academia on the issue of income supports. The following highlights some of the themes we heard.
The discussion began by looking at the concept of guaranteed income, why it is so popular right now, how it might work, and what some of the challenges are with implementing it.
Support for guaranteed income
The push for guaranteed income can be seen in the work of activists, academics and non-governmental organizations (NGOs) across the political spectrum. There are campaigns by activists and NGOs in health, housing, food and other sectors, arguing in favour of some kind of guaranteed income for all Canadians.
To understand the popularity of guaranteed income, we need to look at the retreat of the federal government as a leader in the social services. The promise of a single solution seems alluring. In many ways, the embrace of guaranteed income is consistent with a turn towards emphasizing the responsibility of the individual. It considers the individual as best suited to figuring out how to spend his or her finances.
How guaranteed income might work
In terms of how guaranteed income might work as a social policy, there are at least two delivery mechanisms.
The first is negative income tax (NIT).
Basically, NIT works in the following way: if someone has no income, they would get a certain amount of “guaranteed income” each month. However, if they earned $1,000/month, the guaranteed income they receive each month would be reduced by a certain amount.
The infrastructure for NIT is in place, and it is something the federal government could do quite easily. However, while there are many advantages to NIT, there are also problems – what do we do when things go wrong? For example, in Ontario, recipients of social assistance face the threat of claw backs and loss of medical and other benefits as soon as an individual begins to earn upwards of $200 a month.
If the NIT were implemented, accountability measures would be key. There would need to be a transparent, accessible way for people to appeal or dispute claw backs, and the system would need to be less punitive.
The second mechanism is basic income. This means everyone receives a certain amount without a means test or work requirement, say $10,000 a year (18% of GDP approximately). In Canada, the concept was tested in Dauphin, Manitoba between 1974 and 1979 when the provincial and federal governments provided funds towards a guaranteed annual income for residents. However, the test “ended without much analysis or a final report.”
One of the major problems with both of these delivery mechanisms is that they are still tied to the tax filing system which does not reach everyone, especially those individuals living in poverty.
Poverty is not just about income
Not everyone is supportive of the idea of guaranteed income. One of the issues that emerged in our discussion is that poverty is not only about income; it’s related to employment status, cost of housing, cost of child care and access to decent food.
By focusing on guaranteed income, we may miss out on a chance to talk about other factors that contribute to income security such as employment. The precarious nature of twenty first century work, for example, is very different than it was in the industrial era. Solutions that address this change will not happen through the introduction of guaranteed income.
We also need to understand that there may be trade-offs. What kinds of programs would we lose if we adopted guaranteed income? People also receive other services; if guaranteed income were a reality, would they lose access to these services?
Challenges to existing income supports
In the context of income supports that already exist, it is best to think of guaranteed income as a technology or tool with which to design effective policy. We can look for a modest series of guaranteed income-type programs that are already in place, and improve or ramp them up. There are many programs already out there that make a difference. Examples include the Canada Child Tax Benefit, Old Age Security pension, the refundable GST credit and the income-tested Child Disability Benefit.
But there are challenges faced by current income supports.
There’s the challenge around how the supports are designed. While we have good programs, many were designed in another era. We need to consider modernization.
For instance, Employment Insurance was developed in the 1970s when most workers tended to spend their entire career with one employer. Now, Canadians are more likely to work at multiple jobs over their lifetimes. We have also seen structural changes that have led to the decline of certain sectors such as the manufacturing sector. A modern, well-designed Employment Insurance scheme should have common eligibility standards and identical benefits across the country, rather than benefits that are calculated based on unreliable local employment rates, which may not reflect the reality of work for many individuals in the community.
Another challenge is in how supports are delivered. We need to ensure that the delivery mechanism is straightforward and easy to troubleshoot. For instance, as supports are designed, we need to ask how a cheque will be received and what will happen if there is a problem. As well, there is a need to reach non-tax filers, as they are often the people living in poverty and might get missed if the delivery mechanisms are based on taxes filed alone.
A third challenge that was identified is around implementation. We need to consider the basic rights of people in poverty. The question to answer is how we implement income supports in such a way that those living in poverty can access their basic rights.
Assumptions about income supports
There is a lack of a coherent narrative or framework around why we have the income supports that we do. Instead of focusing on the dignity of the individual, we focus on the morality (and immorality) of the poor. These assumptions guide public policy, political rhetoric and the delivery of many social programs across the country. Challenging these beliefs will mean including the lived experiences and voices of those on the margins and confronting old stereotypes about the poor.
The following assumptions are present, implicitly and explicitly, in many of our current income security supports.
- People should have to jump through hoops to get income supports. The process we put people through in applying for social assistance is difficult. There are numerous forms to fill out and government offices to visit. The implicit assumption seems to be that people will lose the incentive to work if they are treated too generously by the state. In reality, many people living in poverty do work, and many of those that do not, would like to do so.
- Tax is a four-letter word. We need to change the way we think about taxes. There was an anti-tax revolution under U.S. President Regan and U.K. Prime Minister Thatcher, and it was picked up by many other countries, including Canada. The volume of taxes is what matters – it’s not just about taxing the very wealthy 1%. Taxes should be progressive (when possible), and they should be paid by everyone.
- The labour market works for everyone. There are some people who cannot work for a variety of reasons, such as disability, family circumstances and other factors. Others, while they may be able to work, will need additional supports. There needs to be more imaginative thinking about what a compassionate and responsive approach might be to include all Canadians in the economy.
- Money spent on the poor disappears. In reality, money that ends up in the hands of middle and low-income families goes back into the economy. When people buy goods and services, they contribute to the economy. There is an assumption that money or benefits that are distributed to the poor disappear into a black hole. Instead, money and support for the poor go back into the local economy through spending on food, housing, services and more.
The connection between income supports and rights
By using a rights-based approach to frame income supports, it is possible to draw attention to questions of accountability, such as the construction of various programs, and whether they actually allow people to claim their rights. Perhaps an ombudsperson or rights tribunal might be an effective way to address rights claims or violations. We also need to know what progress looks like: we need to be able to measure poverty. To do this, we need more and better data. There is also the issue of access: who are we trying to reach with certain income supports? Who is being excluded? Who has access to these programs in practice? Finally, a rights approach calls for the creation of programs that are grounded in the lived realities of peoples’ experiences.
Continuing the discussion
While our current income support system has some positive aspects, we can see the challenges and potential of creating and sustaining income supports that will lift people out of poverty and make better lives for themselves and their children. However, if we look at the current system with a rights-based framework in mind, we can see a better roadmap to improvement. Any discussion around improving our current income supports must consider the impacts on the people living in poverty in a way that recognizes their dignity and experience. As we wrote in the May 2015 Maytree Opinion, “Time for a system upgrade,” accountability, transparency, measuring progress, access and participation will be essential hallmarks to improving our social supports system and to fighting poverty.
- Guaranteed Income or Guaranteed Incomes? – Ken Battle, Caledon Institute of Social Policy
- Income Security for Working-Age Adults in Canada: Let’s Consider the Model Under Our Nose – John Stapleton, Metcalf Foundation
- What Works? Proven Approaches to Alleviating Poverty – Anne White, Nevena Dragicevic, and Thomas Granofsky, Mowat Centre