Basic Income: New Year, new look at an old idea

B.C. is spending $4 million to look at the feasibility of basic income as a way to reduce poverty in the province. The Canadian Taxpayers' Foundation says its been tried and hasn't worked.

Critic cautions it's 'outrageously expensive money for nothing'

Researchers will look at whether handing out basic income regardless of employment status can help bring down poverty and support workers as jobs are lost. (The Canadian Press/Graeme Roy)

One of the conditions B.C. Green Leader Andrew Weaver made before throwing his support behind the New Democrats — allowing the party to govern after the 2017 election — was that it examine the idea of introducing a basic income for poorer British Columbians.

Last summer, Shane Simpson, the NDP minister of social development and poverty reduction, made good on the arrangement and announced the creation of a three-person panel to look at whether basic income is a viable option to reduce poverty in the province. 

The idea isn't new. It was first floated in England in the 16th century as a way to cut down on theft by desperately poor people. A basic income provides regular payments to certain, eligible recipients with no conditions attached.

Basic income trials have been attempted most recently in northern European countries such as Finland. Proponents, like Weaver, argue that the giving people a basic income — whether they are employed or not — provides income security and reduces anxiety among the unemployed.

Payment proposals have ranged from $15,000 to $20,000 a year per adult.

"When people have their basic needs met, they have a greater chance of achieving their full potential — they can pursue education and job training or take the risk of starting a new business," said Weaver in a statement to CBC.

However, opponents — such at the the Canadian Taxpayers Federation — have argued it creates more bureaucracy and is too expensive.

In Canada, the idea has been piloted and tried on a small scale beginning in the 1970s, but has been repeatedly shelved because of prohibitive potential costs or lack of political support. 

In the 1970s, the province tested an annual age for the working poor. What happened? 2:09

$4 million for study

In its last budget, the B.C. government allocated $4 million over two years to study the issue again — in-depth and with a B.C. focus this time. 

The committee will be chaired by David Green of the Vancouver School of Economics at the University of British Columbia.

The other two members are Jonathan Rhys Kesselman of Simon Fraser University and Lindsay Tedds from the School of Public Policy at the University of Calgary.

The trio will oversee approximately two dozen independent research projects ranging from the impact of automation on the labour market, alternative structures for income support, financial literacy and even patterns of homeless shelter use.

They are also seeking public feedback. Then, they will have until early 2020 to come up with a report based on the new information.

Ontario is cancelling a pilot on Basic Income in the spring. (Matt Prokopchuk/CBC)

The concern is that half of Canadian jobs are at risk of automation in the next decades and others will be contract and part time. Simpson said a basic income would help the hundreds of thousands of B.C. residents living in poverty.

"B.C. has one of the highest poverty rates in Canada, yet we are one of the wealthiest provinces," said Simpson in a statement to CBC.

"It is vital that we look at every option and every opportunity to make life better for the 557,000 people who are living in poverty here," said Simpson in a statement to CBC.

The committee will also consider how basic-income principles might be used to improve the existing income support system, he said. 

Could cost billions

Jonathan Rhys Kesselman, an economist who specializes in taxation policy, public finance and social policy, said it could cost billions of dollars to pay for basic income.

But he says many people would argue the current welfare system is "mean, it's stingy, it is stigmatizing and it's administratively costly."

Evidence from basic income pilots done in Canada and elsewhere, he says, indicate that attitudes to paid work don't change, but more married women and young workers 18-24 years-old, opt to work less.  

The report could also focus on reforms to the current income assistance system to make it less stigmatizing and easier to access, he said.

But critics worry that basic income could be added on top of the existing welfare system and the cost would be prohibitive.

Kris Sims of the Canadian Taxpayers Federation points to the Finnish pilot that was abandoned recently when it was calculated that taxes would have to increase by 30 per cent to cover costs.

"Four million dollars to spend on something you already know doesn't work, that just doesn't make any sense," Sims said.

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