Minister eyes guaranteed minimum income to tackle poverty

Theglobeandmail.com
Feb. 5, 2016
By Bill Curry

The federal minister responsible for reducing poverty says he is interested in the idea of a guaranteed income in Canada.

Veteran economist Jean-Yves Duclos, who is Minister of Families, Children and Social Development, told The Globe and Mail the concept has merit as a policy to consider after the government implements more immediate reforms promised during the election campaign.

“There are many different types of guaranteed minimum income. There are many different versions. I’m personally pleased that people are interested in the idea,” said Mr. Duclos, who has a mandate to come up with a Canadian poverty-reduction strategy.

The federal Liberals have made ambitious promises to tackle poverty and to work with the provinces on improving Canada’s social safety net in areas such as skills training and employment insurance. Any major reforms would require the co-operation of the provinces, given the overlapping responsibilities for dealing with poverty. Mr. Duclos is in Edmonton this week to meet with his provincial counterparts. The agenda is expected to include a wide-open discussion of how Ottawa and the provinces can work together to address issues such as unemployment and housing shortages.

A minimum or basic income involves a government ensuring everyone receives a minimum income regardless of their employment status.

Interest in the idea of a guaranteed income is heating up since the Finnish government announced last year that it will research and test the concept.

That has led to growing calls to explore the idea here. Former senator Hugh Segal and Conference Board of Canada chief economist Glen Hodgson are among those recommending pilot projects.

Dauphin, Man., was the site of a short-lived test of the concept in the 1970s that researchers say was successful at reducing poverty.

The general concept is that a guaranteed income would cover basic needs and reduce demand on existing social programs. However, proposals vary widely on whether it should be paired with a drastic reduction in social programs such as welfare and unemployment insurance or complement them.

This means versions of the idea have appeal across the political spectrum, as it could lead to a larger or smaller role for government depending on the model.

A guaranteed income was not part of the federal Liberal platform, and Mr. Duclos said it is not currently on the government’s agenda given the focus on delivering campaign commitments. However, the minister is clearly interested in exploring the idea over the longer term.

One of Mr. Duclos’s most pressing files is folding several existing benefits for parents into a single monthly payment that is geared to income. That has a target implementation date of July. The minister noted that elements of that plan are in line with a guaranteed national income.

“Most importantly, I think it’s the principles behind the idea [of a guaranteed income] that matter. These principles are greater simplicity for the government, greater transparency on the part of families and greater equity for everyone,” he said. “In fact, it’s the same principles that are behind the implementation of our Canadian child benefit in the next budget, so it’s great that different versions of different systems can achieve the same objectives of greater simplicity, transparency and equity.”

Mr. Duclos’s positive tone is at odds with the conclusions of a 2012 research paper he co-wrote on the merits of a guaranteed minimum income for Quebec when he was an economics professor at Laval University. The paper warned that such a program would be costly and could encourage less participation in the work force.

“We find that contrary to what is often assumed, guaranteed income schemes may increase poverty rates and the incidence of low-income rather than decrease them,” the report states.

However, Mr. Duclos, who has a PhD from the London School of Economics, has been studying the concept for decades and has also written more positively about it.

He called for a basic-income program in a 2008 paper for the Institute for Research on Public Policy.

Conservative MP and finance critic Lisa Raitt said she would like the House of Commons finance committee to study the idea. She also said she raised the issue with Finance Minister Bill Morneau recently during a private pre-budget meeting.

“He seemed favourable,” she said. “I have an open mind on it. I know that there’s been progress made on it around the world in terms of how people are viewing it. I don’t know if it will work in Canada but the work of the committee will help us figure out whether or not it is something that is good or not good.”

A 2009 Senate committee report recommended a basic income for people with severe disabilities. It also called on the federal government to study the costs and benefits of a basic annual income.

Social- and affordable-housing advocate Stephan Corriveau, who is the director-general of a coalition of Quebec housing organizations, said a key question is what programs would be eliminated or reduced as part of a shift toward a national guaranteed income.

“The devil’s [in] the details. A guaranteed national income is both a very promising and threatening statement,” he said. “It could be threatening because some of the proposals that are on the table are actually going to diminish the income of the lower-income part of the population and are being used as a way of dismantling the social security net.”

Tim Richter, president of the Canadian Alliance to End Homelessness, said other social programs would still be needed.

“Income is always a part of poverty and poverty reduction, but there are structural issues related to housing and child care and other things that will need to be addressed in addition to the income equation if we’re going to lift people out of poverty,” he said. “It is a piece of the puzzle, but it shouldn’t be seen – I don’t think – as a silver bullet to solve all issues related to poverty.”