Nearly 10 per cent of the Canadian population lives in poverty. Canada’s current social safety nets are failing to lift people above the poverty line, are stigmatizing and intrusive for recipients, and are expensive and inefficient to administer by governments. Basic income, if delivered properly, could address those major failures—and there’s a bill being presented to Parliament right now to discuss it.
Bill C-223, an Act to develop a national framework for a guaranteed livable basic income, aims to establish a different and long-overdue pathway to poverty reduction in Canada—a basic income. Although the bill is a critical policy initiative, for far too long governments have meddled in feasibility and framework studies, while dragging their feet on real action to address income inequality.
Bill C-223 is a Private Member’s Bill presented by NDP Winnipeg Centre MP Leah Gazan. It was first introduced in the House of Commons in December 2022. The bill is in second reading in the House of Commons and is slated to be voted on early this week. If passed, it requires the Minister of Finance to develop a national framework for all Canadians over the age of 17 (including temporary workers, permanent residents, and refugee claimants) to access a Guaranteed Livable Basic Income (GLBI).
The framework would determine the sufficiency of a GLBI for all regions in Canada, including costs of goods and services necessary for Canadians to lead a dignified and healthy life across different communities. The framework must also promote and guide national standards for health and social supports which are complementary to a GLBI program.
The bill states that enrollment in education and participation in the labour market should not be required to qualify for a GLBI, and accessing the supplement would not result in a decrease in services or benefits for those with exceptional health or disability needs.
Universal Basic Income versus Guaranteed Livable Basic Income
Basic income is an umbrella policy referring to an unconditional cash transfer from government to individuals to enable everyone to meet their basic needs, participate in society and live with dignity. Basic income policies, pilots and programs are not all the same. Increasingly, the term is used by governments for any cash-based social support program—even highly targeted or experimental ones for specific populations, as we’ve seen in Quebec and Newfoundland in the last five years, as well as in international pilots like the one in Wales. The two most common basic income policies that have garnered support in the US and Canada are a Universal Basic Income (UBI) and a Guaranteed Livable Basic Income.
A UBI model provides the same benefit amount to every individual regardless of their other income. Those who earn higher incomes and don’t need the payments would have some or all of these payments taxed back. A GLBI model takes earned income into account from the beginning, and supplements that income with an ‘income guarantee. Under a GLBI model, if an individual’s income is very low, they would get the greatest amount, and as other income increases, the benefit gradually reduces. Those who have sufficient income from other sources don’t get a payment. In Canada, GLBI has already been tested twice, with Manitoba’s Mincome Project (1974 to 1979) and Ontario’s Basic Income Pilot (2017 until its premature cancellation in 2018).
UBI designs have considerably higher upfront costs than GLBI models, and are far more popular among advocates in the US and internationally than they are in Canada. For advocates in Canada, a GLBI model—like the one Gazan’s Bill C-223 aims to develop—is favorable to a UBI, both because it’s cheaper upfront to administer and because basic income is first and foremost about poverty reduction and replacing archaic and inefficient social welfare systems.
Canadian advocates are clear that any effective GLBI program should ensure everyone has an adequate income above the poverty line, replacing certain types of programs (such as provincial welfare) while still working alongside other important social supports. Basic income is not a one-size-fits-all or silver bullet solution to ending poverty. While having cash is incredibly important, GLBI as a poverty reduction program is most effective in tandem with other progressive social policies and programs.
A multifaceted and robust social welfare system aiming to combat poverty includes living wage policies, healthcare, education, pharmacare, tenant rights and protections, more accessible and affordable housing, public transportation systems, and more. Cash in people’s pockets cannot solve the woes of a financialized housing market or chronically under-funded public healthcare system. However, cash is an essential and urgent piece of the puzzle of addressing poverty—as the Canada Child Benefit, and Guaranteed Income Supplement programs prove.
The time for a basic income is now
While this bill signifies a serious federal interest in developing a national basic income program–which hasn’t been seen in Canada since the 1970s Mincome project–there is a risk for the “framework development” process to become a drawn out bureaucratic slog so the federal government can further delay real action on poverty reduction.
Over the last 10 years, provincial governments (most notably, British Columbia) have responded to anti-poverty advocacy by making commitments to “study” basic income and its potential for poverty reduction. Once cautiously celebrated by advocates, it is now abundantly clear that these “feasibility studies” are tactics to delay real policy action and meaningful efforts to address income insecurity.
We already have an abundance of evidence that a GLBI will have positive impacts for people, families, and communities. Evaluations of basic income pilots in Canada and worldwide find that unconditional cash transfers has a positive impact on people’s mental and physical health, on high school graduation rates, and their sense of trust and connection to their communities.
Decades of research shows that letting poverty persist is bad for people’s health, the wellbeing of families, and the social fabric of communities.
Social assistance programs across the country consistently fail to address poverty because of insufficient rates and complex eligibility criteria, while being stigmatizing for recipients. Poverty ends up being addressed by far more expensive public programs—like emergency rooms—or by already cash-strapped charities like food banks who end up only being able to put a bandaid on the gaping wounds of poverty.
Aggregate data from US pilots support what we heard from participants of the prematurely canceled Ontario Basic Income Pilot—people who receive basic income primarily spend their money on necessities like food, rent, clothing, and transportation.
Skeptics are quick to assume that people will stop working if they get a basic income. Pilots from across the world consistently show that labour market impacts are negligible when programs are designed with low and gradual reductions in payments, proportional to income. In the 1970s Mincome pilot in Manitoba, those most likely to reduce working hours were single mothers of young children and people returning to finish their high school education. These unpaid endeavours—that people can afford to take on while receiving a basic income—make our communities healthier, safer, and smarter.
A guaranteed livable basic income could transform Canada’s social welfare system and make significant headway in alleviating poverty. Bill C-223 has the potential to kickstart this transformation. However, before committing to another feasibility study, policymakers must seriously consider the wealth of evidence already available about basic income’s impacts and potential design as they move forward with Bill C-223.
