Guaranteed minimum income could be problematic, warns poverty advocate

The head of the Social Development Centre Waterloo Region says unless governments are careful, a guaranteed minimum income program might not be as effective as proponents think.

Minimum income programs need nuance to succeed

For a guaranteed minimum income program to be successful, governments will have to ensure it's highly nuanced and doesn't discourage employers from creating stable decent jobs, says Trudy Beaulne, executive director Social Development Centre Waterloo Region. (Chris Wattie/Reuters)

The head of the Social Development Centre Waterloo Region says she's not sure a guaranteed minimum income program is all its cracked up to be.

Both the provincial and federal governments are researching the idea, with the Ontario Liberals even promising to fund a pilot project in its 2016 budget.

A guaranteed minimum income is a public benefit that tops-up a person's salary if their income falls below a set level.

Though the idea is being trumpeted as a way to eliminate poverty, Trudy Beaulne, executive director of Social Development Centre Waterloo Region, said unless governments are careful, it might not be as effective as proponents think.

"If we have a program that assures everyone a basic income level, that might create a disconnect between the incentive to create decent jobs for people," Beaulne told CBC Kitchener-Waterloo.

"Employers may decide, 'Well, we don't need good business practices, we don't need to create well-paid positions, we don't need to create secure jobs because people will be taken care of.'"

Beaulne said she also has concerns about the program's potential cost.

"It's a very, very cost-heavy program to run. All of the calculations that have been prepared, that we've seen, are very large numbers. And we wouldn't want it to be discarded for that reason."

She said to be successful, government would have to raise taxes, in particular corporate taxes, to pay for it.

'Mincome' programs need nuance

Ultimately, Beaulne said, for a guaranteed minimum income program to be successful it will have to be very nuanced.

"It's not one-size fits-all," Beaulne said, adding the best kind of minimum income support would provide different levels of support at different stages in a person's working life. 

A discussion paper by Poverty Free Ontario, written in 2014, suggests breaking it down into three stages: 

  1. Children and youth (0-25): Including a full national child benefit that would help lower-income families shoulder the cost of raising children, and a youth income benefit for young people to ensure "debt free" learning and training opportunities as they get ready to enter the workforce.
  2. Early and middle adulthood (25-55).
  3. Later adulthood (55+): Begin to extend eligibility for the GIS (guaranteed income supplement) down from full retirement years to this stage of adulthood, allowing them to gradually step down from full employment to full retirement, and then upgraded as needed after OAS (Old Age Security) and CPP (Canadian Pension Plan) incomes are inadequate.