P.E.I. should push feds to support $260M basic income program, committee says
If Ottawa won't come on board, P.E.I. should go it alone with smaller pilot, MLAs say
A special all-party committee of the P.E.I. legislature is urging the provincial government to begin "immediate negotiations" with the federal government seeking support for a universal basic income guarantee for the province.
But such a program would come with a significant price tag, estimated at $260 million per year — almost $100 million more than the current budget for the entire P.E.I. Department of Social Development and Housing.
Providing all Prince Edward Islanders with access to a guaranteed basic income would "ensure every Islander, no matter their circumstance, can live with basic health and dignity," MLA Trish Altass told the legislature Tuesday.
Altass served as chair of the Special Committee on Poverty in P.E.I., which has held 24 meetings since Sept. 2019, canvassing local advocacy groups and national experts on how to measure and address poverty in the province, and on how to set up parameters for a basic guaranteed income.
In 2016, members of the previous legislative assembly provided unanimous support for a Green motion calling on the federal government to support a basic income pilot project on P.E.I.
Since that time, the idea has been picked up by politicians of different political stripes at every level of government. But this report marks the first time anyone has laid out how a guaranteed income might work, and what a program might cost.
Proposal now in government's hands
With the adoption of the committee's report in the legislature Tuesday, its work is concluded. It's now up to the government under Premier Dennis King to decide what to do with the committee's 16 recommendations.
Ottawa has so far been unwilling to provide financial support for either a basic income pilot for P.E.I. or for similar proposals in other parts of the country.
If that remains the case, then the committee's recommendation is that P.E.I. go it alone, providing its own funding for a three-year pilot encompassing up to 4,200 randomly selected Islanders, at an estimated cost of $19 million to $26 million per year.
Under the proposed parameters, participating Islanders would be guaranteed an annual income of $18,260 for a single adult and $25,747 for a family of two.
That figure is 85 per cent of the threshold determined by Statistics Canada for P.E.I., meant as an indicator of how much it costs a low-income family in the province to purchase basic necessities.
The report says any provincial pilot should run at least three years and be evaluated by an arms-length, third-party agency, with a second group of Islanders who aren't part of the pilot also followed for comparison purposes.
The committee has made it clear that, ultimately, a fully funded basic income guarantee for the entire province, which would require federal support, would be preferable to a pilot program.
Cancelled pilot could leave participants worse off
Drawing on the experiences of other communities like Hamilton, Ont., where basic income pilots were cancelled before they had run their course, the committee decided there were risks associated with starting a pilot here.
"If the project is not renewed, or even cut during the middle of the project, then people with low income are left in a potentially vulnerable place, even more so than before the start of the project," the report states.
However, MLAs on the committee believe a basic income guarantee for all of P.E.I. cost-shared with the federal government could serve as a pilot for the rest of the country.
The report estimates more than 50,000 P.E.I. residents would qualify for such a program — almost a third of the population. Eligibility would be based on the previous year's tax return.
How it could work
Any additional earnings beyond the basic income level would clawed back by a proposed 50 cents for every dollar earned for those in the program.
For those under 65, the basic income would replace social assistance, although the report notes that the province would still require some sort of income support program to provide benefits in the short-term.
For seniors, basic income benefits would be reduced dollar-for-dollar against Old Age Security, Guaranteed Income Supplement and spousal allowance benefits.
The report says Canada Child Benefit levels are high enough that basic incomes would not have to be increased for families of more than two people.
With Employment Insurance, basic incomes would top up earnings if EI benefits were below the basic income level.
Living wage pegged at $19.30
The committee was also tasked by the legislature at coming up with a living wage for Island residents, which it pegged at $19.30 per hour, based on a report from the Canadian Centre for Policy Alternatives.
As per the CCPA report, the committee said $19.30 is the level "at which a household can meet its basic needs once government transfers have been added to the family's income and deductions have been subtracted."
The committee said the living wage needed to support a family on P.E.I could be lowered if government were to provide additional supports for childcare, housing, or public transportation.
The current minimum wage on P.E.I. is $12.85 per hour, rising to $13 on Apr.1, 2021.
Province needs feds, says premier
While the committee's report passed without opposition in the legislature Tuesday, no MLA other than the committee's chair took up the invitation to speak to the report.
The Green Party included a commitment to a basic income guarantee in its 2019 election platform, but the governing PCs did not. Nor did the third-party Liberals.
The premier has spoken in support of a basic income guarantee but also suggested the province couldn't proceed without federal backing.
"Our government is very committed to working on a basic income guarantee," King told the legislature on July 11, 2019.
"I believe very much that this is a good idea and I believe very much that Prince Edward Island is the perfect spot to start this but we need the federal government to partner with us."