Finally time for a Guaranteed Annual Income

The idea of a Guaranteed Annual Income for everyone is starting to catch on - both here in Canada and in Europe.

by Noralou Roos and Evelyn Forget

WINNIPEG, MB/ Troy Media/ – Could the Guaranteed Annual Income – once considered a radical notion – now be an idea whose time has come?

The Dutch city of Utrecht recently announced it is starting an experiment to determine whether introducing a basic income produces a more effective society.

Closer to home, Joseph Ceci, Alberta’s new finance minister, proposed a guaranteed income program last year on the election campaign trail, and both Calgary Mayor Naheed Nenshi and Edmonton Mayor Don Iveson, have also promoted such a program.

Now, medical officers of health and boards of health members across Ontario are officially calling for provincial and federal governments to bring in a basic income guarantee.

So what exactly is a Guaranteed Annual Income (GAI)?

Well, it turns out, GAI has been supported by generations of economists and welfare theorists, from the left and the right. One version works like a refundable tax credit. If an individual has no income from any source at all, they receive a basic entitlement. As earned income increases, the benefit declines but less than proportionately.

As a result, low income earners receive partial benefits so that they are not worse off than they would be if they quit their jobs and relied solely on income assistance.

This means that there is always an incentive to work, and people who work are always better off than they would be if they didn’t work.

So why are such a broad group of people – finance ministers, mayors and medical officers of health – pushing such a program?

Poverty, substantial evidence now tells us, is one of the best predictors of poor health. And poor health costs everyone.

Research in the city of Hamilton, Ont., demonstrated that residents of the city’s wealthy West Mountain neighbourhood lived, on average, to 86.3 years, while average age at death for residents of one of the poorest Hamilton neighbourhoods was only 65.5 years – a shocking gap.

Way back in the 1970s, Manitoba tried implementing a Guaranteed Annual Income in Winnipeg and in the small town of Dauphin.

In Dauphin, everyone was eligible to participate. A family with no income from other sources would receive 60 per cent of the Statistics Canada low-income cutoff (LICO), which varied by family size. Every dollar received from other sources would reduce benefits by 50 cents.

Important for an agriculturally dependent town with a lot of self-employment, the GAI offered stability and predictability. Sudden illness, disability or unpredictable economic events would no longer be financially devastating. The project ran for four years, ending in 1979.

So did the GAI produce anything to report? Remarkably, even this four-year program had strong positive results. Dauphin high school students were more likely to remain in school than had been true in the years before the GAI started (or in the years after the GAI stopped).

The health of Dauphin residents also improved, with fewer hospitalizations (8.5 per cent reduction), specifically for mental illness, accidents and injuries.

So how much would introducing GAI across Canada cost?

According to several Queen’s University professors, the cost of replacing social assistance (which includes welfare and disability support) and old-age security (which includes a top-up for low-income seniors) and providing every adult with an annual income of $20,000, and children with an income guarantee of $6,000, would be $40 billion. The Fraser Institute calculates the total cost of Canada’s current income support system (the payout plus administrative costs) at $185 billion.

Our own estimates, which build on existing social programs, range from a gross annual cost of $17 billion for a program that (in today’s dollars) is slightly more generous than was offered in Dauphin, to a “Cadillac” version costing $58 billion that would guarantee everyone a minimum income equal to the LICO, and pay at least some benefits to people earning well above the LICO. The cost of GAI depends on how generous it is, how quickly benefits are phased out with additional income and how existing social programs are affected.

Some of these costs, of course, would be partially recovered from the additional taxes paid by recipients, as well as the lower costs faced by so many other social programs that are driven by poverty. Hospital care alone, for example, costs Canada $63.5 billion in 2014.

Bottom line, whether it’s our calculations or those done by other organizations, a GAI is definitely do-able. And it is clear: The potential benefits of a GAI are substantial.

Maybe it is time for the rest of Canada to at least look to what Alberta is saying and focus on the health, educational and financial benefits that the Guaranteed Annual Income might offer.

Noralou Roos is the director of EvidenceNetwork. ca and professor in the Department of Community Health Sciences at the University of Manitoba. Professor Evelyn Forget is a health economist at the University of Manitoba. Her re-examination of Mincome and ongoing work on Guaranteed Annual Income is supported by CIHR and SSHRC.

www.troymedia.com

Just Posted

A tent housing a mobile vaccination clinic. (Interior Health/Contributed)
Over 5K jabbed at Interior Health mobile COVID-19 vaccine clinics

The clinics have made stops in more than 40 communities since launching last week

Provincial Health Officer Dr. Bonnie Henry talks about B.C.’s plan to restart the province during a press conference at Legislature in Victoria, Tuesday, May 25, 2021. THE CANADIAN PRESS/Chad Hipolito
Interior Health COVID-19 cases falling slower than the rest of B.C.

More than a third of provincial cases announced Thursday came from the Interior

A tent housing a mobile vaccination clinic. (Interior Health/Contributed)
Second dose vaccinations accelerating throughout region: Interior Health

To date, more than 675,000 doses have been administered throughout the region

Okanagan Lake (File photo)
Thompson-Okanagan ready to welcome back tourists

The Thompson-Okanagan Tourism Association expects this summer to be a busy one

Aerial view of a wildfire at 16 Mile, 11 kilometres northwest of Cache Creek, that started on the afternoon of June 15. (Photo credit: BC Wildfire Service)
Wildfire at 16 Mile now being held

Wildfire started on the afternoon of June 15 at 16 Mile, east of Highway 97

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

FILE – Most lanes remain closed at the Peace Arch border crossing into the U.S. from Canada, where the shared border has been closed for nonessential travel in an effort to prevent the spread of the coronavirus, Thursday, May 7, 2020, in Blaine, Wash. The restrictions at the border took effect March 21, while allowing trade and other travel deemed essential to continue. (AP Photo/Elaine Thompson)
Feds to issue update on border measures for fully vaccinated Canadians, permanent residents

Border with U.S. to remain closed to most until at least July 21

A portion of the George Road wildfire burns near Lytton, B.C. in this Friday, June 18, 2021 handout photo. THE CANADIAN PRESS/HO, BC Wildfire Service *MANDATORY CREDIT*
Blaze near Lytton spread across steep terrain, says BC Wildfire Service

Fire began Wednesday and is suspected to be human-caused, but remains under investigation

Blair Lebsack, owner of RGE RD restaurant, poses for a portrait in the dining room, in Edmonton, Friday, June 18, 2021. Canadian restaurants are having to find ways to deal with the rising cost of food. THE CANADIAN PRESS/Jason Franson
Canadian restaurateurs grapple with rising food costs, menu prices expected to rise

Restaurants are a low margin industry, so there’s not a lot of room to work in additional costs

RCMP crest. (Black Press Media files)
Fort St. John man arrested after allegedly inviting sexual touching from children

Two children reported the incident to a trusted adult right away

Barbara Violo, pharmacist and owner of The Junction Chemist Pharmacy, draws up a dose behind vials of both Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines on the counter, in Toronto, Friday, June 18, 2021. An independent vaccine tracker website founded by a University of Saskatchewan student says just over 20 per cent of eligible Canadians — those 12 years old and above — are now fully vaccinated. THE CANADIAN PRESS/Nathan Denette
At least 20% of eligible Canadians fully vaccinated, 75% with one dose: data

Earlier projections for reopening at this milestone didn’t include Delta variant

This undated file photo provided by Ernie Carswell & Partners shows the home featured in the opening and closing scenes of The Brady Bunch in Los Angeles. Do you know the occupation of Mike Brady, the father in this show about a blended family? (Anthony Barcelo/Ernie Carswell & Partners via AP, File)
QUIZ: A celebration of dad on Father’s Day

How much do you know about famous fathers?

Emily Steele holds up a collage of her son, 16-year-old Elijah-Iain Beauregard who was stabbed and killed in June 2019, outside of Kelowna Law Courts on June 18. (Aaron Hemens/Capital News)
Kelowna woman who fatally stabbed teen facing up to 1.5 years of jail time

Her jail sentence would be followed by an additional one to 1.5 years of supervision

Most Read