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

2. 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

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

4. 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

5. 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

6. Basic income & Canada's income security system

7. Basic income & Canada's income security system

8. Basic income & Canada's income security system

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

10. 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

11. Basic income & Canada's income security system

12. Basic income & Canada's income security system

13. Basic income & Canada's income security system

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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

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

23. 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

24. 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

25. 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

26. 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