A ‘Basic Income’ & Canada’s Income Security System John Stapleton Open Policy November 23, 2016 Hamilton, Ontario

Basic income & Canada's income security system Order of Presentation Canada’s income security system: - Programs and Proportionality Who is living in poverty? A closer look A basic income: some numbers and concepts Worrying about work….. Some thoughts from the income security data Basic income & Canada's income security system

Programs and Proportionality 1. Canada’s Income Security System Programs and Proportionality Basic income & Canada's income security system

Canada’s Income Security System Now pays out $170 billion ($153 billion in 2013) 8.5% of GDP ($2.0 trillion economy) $30 billion extra (conservatively needed to take all Canadians out of poverty. $170 + $30 = $200 billion 10% of GDP 1.5 percentage points additional Basic income & Canada's income security system

Canada’s Income Security System Canada’s Income Security System - Proportionality Target Group Percent of Population Share of Income Security System Difference Aged 16.5% 52% +35.5% Children 19.3% 9% -10.3% Working age adults 64.2% 38% -26.2% Basic income & Canada's income security system

Basic income & Canada's income security system

Basic income & Canada's income security system

Basic income & Canada's income security system

Basic income & Canada's income security system 2. Who is living in poverty? A closer look Basic income & Canada's income security system

Who is living in poverty? 12.7% of Canadians 1.7% of all Canadians are seniors living in poverty (about 10% of all seniors – 13.3% of poor) 5.1% of all Canadians are recipients of social assistance – about 40% of the poor 6.0 % of Canadians are non-elderly, working age, mostly working poor – 47% of poor Basic income & Canada's income security system

Basic income & Canada's income security system

Basic income & Canada's income security system

Basic income & Canada's income security system

Some numbers and concepts 3. A Basic Income Some numbers and concepts Basic income & Canada's income security system

Basic income & Canada's income security system Numbers and Concepts No agreement on GAI or Basic Income terminology – they mean different things to different people …………….but……………… GAI tends to mean blowing up the existing system and replacing it with a negative income tax or some big benefit of some description Basic Income tends to mean leaving most of the system intact but replacing/augmenting welfare and bringing everyone to the poverty line with no conditionality Basic income & Canada's income security system

Basic income & Canada's income security system Numbers and Concepts Something to think about…………… One could argue that seniors and children have a basic income guarantee now: OAS and GIS, GAINS and Trillium credits A single gets $18,000 a year with no other income Children get about $6,000 a child (averaged out) with the new federal child benefit program Question? Do we just need a new program and more money for working age adults? Basic income & Canada's income security system

Basic income & Canada's income security system Numbers and Concepts More to think about…….. Program Administration now costs about $8 billion Profound cuts and rationalization could get it to $4 billion – cut 40,000 staff Minimum cost of GAI or Basic income is $25Billion to $30 billion Administration savings can’t pay for it! Basic income & Canada's income security system

Basic income & Canada's income security system Numbers and Concepts Implement a Negative Income Tax Blow up everything else Pay everyone a set amount and tax back from 6 in 7 Canadians who are not poor using existing tax system The cost soars to (up to ) $500 billion – 25% of GDP Bankrupts Canada instantly A solution in search of a problem? Basic income & Canada's income security system

Basic income & Canada's income security system Numbers and Concepts Apologies to the Bare Naked Ladies: “If I had 30 billion dollars….. I’d buy you …….” A real national child care program A real solution to climate change An end to gridlock and infrastructure decay Many Canadians have their own ideas as to their priorities for a spare $30 billion – They would not start with a GAI or basic income !!! Basic income & Canada's income security system

Basic income & Canada's income security system Numbers and Concepts What $30 billion means: $1,739 for every man woman and child in Canada to pay up $3,478 for the richest 50% of Canadians if we did not want the bottom half to pay…… It’s not chump change! Basic income & Canada's income security system

Basic income & Canada's income security system Numbers and Concepts Must also consider First Nations Not just income poverty Also what we could call ‘living standard poverty’ where heat, light, water, housing, education are substandard Would raising everyone to the poverty line or above solve living standard problems? Basic income & Canada's income security system

Basic income & Canada's income security system Part 4 Worrying about work….. Basic income & Canada's income security system

Basic income & Canada's income security system Fraser Institute “Although the practical implementation challenges make a GAI reform implausible in Canada, evidence from five North American experiments with a negative income tax style GAI provides some valuable insights. A negative income tax discourages recipients from working because it subsidizes leisure and reduces the marginal benefit of working. The results from the experiments generally point to a reduction in hours worked by recipients, reinforcing the concern about work disincentives.” Basic income & Canada's income security system

Basic income & Canada's income security system Worrying about work….. Give people money and they won’t work? Lazy millionaires? Lazy poor people? People who “want to be poor/homeless” The counter: - rich people who work? Why would they? - 2.6 million in working poor families? - working seniors in Walmarts and Tim’s ? Basic income & Canada's income security system

Basic income & Canada's income security system Worrying about work…. Many people believe on balance that motivation comes through deprivation; or Motivation ought to come through deprivation . But it seems that almost everyone wants to work – a tonic for the soul – heals illness – and provides self-esteem Non-work is painful – not leisure! Basic income & Canada's income security system

Some Thoughts from the Data 1. Our income security system is out of whack with who is poor 2. It works best for people who are not poor 3. It fails people who are poor 4. The system could easily afford to provide a basic income if there is the national will to do it. 5. Seniors are doing best but we need to ‘Grow the pie” for all to reduce and eliminate poverty. Basic income & Canada's income security system