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A Guaranteed Annual Income: An Idea Whose Time Has Come?

The Ontario government is launching a pilot project this fall for a Guaranteed Annual Income (GAI), and the federal Liberals are considering the idea as well. Would a GAI be a good idea for Ontario and Canada?  Tim Murphy, John Capobianco and Kathleen Monk assess the pros and cons.

 

 



John Capobianco:

The idea of a guaranteed annual income (GAI) has been floated around for some time, and in concept it makes some sense.

But the challenges come from the implementation of such a program. Like everything else that is tax-based, the devil is in the details.

The provincial government announced recently that it wants to set up a pilot project to see if this can work; the federal government is also making some moves to study this further through a parliamentary committee in a pre-budget report it tabled last week.

Essentially, a GAI is defined as a cash transfer from government to individuals or families to ensure a minimum income. So conceptually, it would allow individuals and families to have a safety net – a set income that would allow for some comfort, especially when the economy is in a tenuous state as it is for us here in Ontario and the rest of Canada. It is for this reason that this idea will have some support from all corners of the political spectrum – even the federal Conservatives are ok to study the idea.

As I mentioned earlier, the devil is in the details and we won't know those until we get a better sense of what the provincial government is considering with their plan, and whether the federal government will also get involved, since it would work more efficiently if all levels of government are on the same page when it comes to implementing a GAI.

What we don’t need are more multi-levelled social programs which are not particularly coordinated, and as such, not effective in solving long-term income issues.

 

  Kathleen Monk:

You are right John, the devil is in the details. The test will be: will it actually help people? Will people still be eligible for existing supports, drug coverage etc. or will they lose them? Will this pilot project of a guaranteed annual income (GAI) in Ontario be progressive, or will it be a way for right-wing forces and parties to further dismantle existing social programs?

My friend Rob Gillezeau, who’s an economist & Assistant Professor at University of Victoria, has said: “There are more politically pragmatic things we can do that are perhaps even better policy.” Like universal, affordable childcare for example.

I think that a guaranteed annual income (GAI) is an idea that should be looked at, but it’s important that governments, policy writers and civil society also grapple with the larger problem of income inequality. As John mentioned, at the federal level there has been much discussion of a GAI lately, and on Monday of this week, NDP finance critic Guy Caron called on the Standing Committee on Finance to undertake a study on guaranteed minimum income – which is a good first step.

 

 Tim Murphy:

It is difficult taking on two such well-informed folks, but here goes. Evidence-based decision-making usually starts with evidence, so it makes consummate sense to test whether a guaranteed annual income is a good idea. And for this, the Ontario Liberals should be congratulated.

That said, this is not, and should not be, a partisan idea.

While a number of "progressive" voices have championed the concept, so have diverse ones on the right. Robert Stanfield made it part of his platform in 1969; Hugh Segal, the living heart of the Conservative Party, has long been a supporter, and even Lisa Raitt has indicated interest. (Kathleen: Even for me, it is a bit Machiavellian to think that Conservatives would pursue this idea to undermine existing social programs!)

The advantages could be tremendous – a living wage, less government bureaucracy meddling in the daily expenditures of families, reduced stigma and, if set at the right level, a way to help people over the welfare wall. As Segal himself said, it can eliminate the dehumanizing effect of government officers deciding who and who isn’t worthy of aid and what is permitted spending and what isn’t.

 

John Capobianco:

I love it when my Liberal friend, Tim, starts to quote Conservatives on policy issues - makes me feel good! But Tim is right when he says that this shouldn't be a partisan issue.

What will become a partisan issue is the implementation of such a plan. And this is where Kathleen is right to query what are the other alternatives which could be brought forward that will have the same impact.

There is a case study that many look to when considering the feasibility of a GAI scheme and that is the Mincome Project in Dauphin, Manitoba. Canada experimented with a guaranteed minimum income and in this particular case it found that it did not discourage people from working except in two areas: new mothers and teenagers who decided to use this guaranteed income to stay in school longer.

The pilot project the Ontario Liberals are considering for the fall, and exactly what their ultimate objective will be defined as, will be critical to ensuring a real test for success.

The economy is always the most important consideration for voters - and with that the security of a job. A GAI can be a solution to some challenges, but whether it is a band-aid solution or a long-term solution is yet to be determined.

 

Kathleen Monk:

Yes John, there is some good evidence from the Manitoba pilot project and while I am certainly not assigning dark and evil partisan intentions to those championing the idea of a GAI (that comment is for you Tim), I do think the GAI needs to be thoughtfully considered. I bet even Hugh Segal would back me on that statement.

I think governments at all levels need to figure out ways that we can build on our social programs. There are many other programs that should be examined and championed alongside a GAI.

My old boss, Ed Broadbent. championed the idea of an enhanced Working Income Tax Benefit. Another idea is to enhance the GIS to fill income gaps without the complications of the GAI debate.

There is a real question that should be put to the Ontario Liberals today: why are they championing the idea of a GAI now when in 2012 the Liberal government cut $21 million from homelessness prevention? Or in 2015 when the Liberals quietly cut a year of funding from the Local Poverty Reduction fund, by switching 6-year funding plan to 5-years?

Regardless, more debate is needed, and more help is needed for some people in Ontario and throughout Canada. Here's hoping our governments have the wisdom and insight to implement the best plan.

 

Tim Murphy:

John: this is almost a liberal enough idea for Patrick Brown to flip-flop his way into supporting it! That said, I don’t want to get too enthusiastic before the evidence is in, and there are potential disadvantages too that need to be tested. Does it have the effect, as some U.S. studies and the Fraser Institute suggest, of reducing the willingness of recipients to work?

For me, the real test may be bureaucratic and intergovernmental. Can three layers of government, each with their own programmes, ever find a way to agree on making this work? In some ways, with so many governments, federal and provincial, currently of a common stripe, now may be the best time to act.

And Kathleen, I don’t think the Wynne government has anything to apologize for on the social policy front. From free tuition for anyone whose family income is less than $50,000, to helping pay social workers and others a real wage, to the recent announcement on housing, this is a government that has a real track record on social policy reform and action.

Nonetheless, there is much yet to be done. Ontario’s announcement was really about an intention to proceed and the idea is only at the inception stage. It will be an aggressive task to consult, design, implement and analyze the test in advance of the 2018 election.  

 

Tim Murphy is an Executive Partner at the law firm McMillan LLP, Campaign Co-Chair for Ontario Premier Kathleen Wynne and the former Chief of Staff to Prime Minister Paul Martin. His comments are generally curmudgeonly but always his own. John Capobianco is a Senior Partner and National Public Affairs Lead at FleishmanHillard. He has been a Conservative strategist with over 30 years of political activism at all three levels, including as a former federal Conservative candidate. Kathleen Monk is a strategic communications professional with over 15 years of experience in media, government, and the non-profit sector. A frequent media commentator on politics and public affairs Ms. Monk appears regularly on the CBC. 

 

 

Posted date : March 16, 2016
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