A Guaranteed Livable Basic Income
Canada needs a guaranteed livable basic income (GLBI) to free people from poverty and enable them to participate adequately in society.
CV21’s vision is to replace the complex patchwork of piecemeal, complicated, difficult-to-administer and stigmatizing social assistance, income-support, and rental subsidy schemes that exist at the provincial and federal levels and replace them with a new unconditional, guaranteed livable basic income or cash payment that is not means-tested. Various groups such as the young, persons with a disability, indigenous Canadians, and those living in rural settings have known profound financial hardship in recent years. A GLBI has the potential to alleviate economic insecurity for those living in urban areas and the rural parts of Canada.
The problem
In 2020 there were roughly 1,271,000 Canadian households whose after tax income fell in the $20,000 to $30,000 bracket which we normally designate as living in poverty. This equates to roughly 10.3% of all economic family units in the country or roughly 3 million Canadians, or 8% of the national population. Many of these folks receive social assistance benefits that are policed closely by provincial governments which have a near singular focus on shutting out potential cheats. Despite the sensationalist accounts in some media, the reality is that fraud is mostly a low single-digit percentage occurrence. In fact, in most jurisdictions in Canada, what is reported as “overpayment” is often administrative error, timing, or recipient reporting mistakes rather than intentional fraud. Convictions for social-assistance fraud are very small relative to total overpayments.
Furthermore, those with incomes modestly above the official poverty line are barely getting by and are frequently on the brink of crisis. Their livelihoods are coming under increasing threat from automation, tariff-induced job losses, outsourcing to cheaper overseas labor pools, and a general growth in lower waged jobs or part-time work. With income and wealth inequality becoming more pronounced, and potentially huge transformations in the economy looming on the horizon, now is the time to replace our existing social welfare system with something that will ensure a greater measure of equality, dignity and choice for recipients. The status quo is no longer adequate.
"I think to be frank, they can't not afford to implement basic income because we're at a point in the development of our economy or society where an increasing number of people are being left behind, and we need to provide them with the supports which allow them to be fully functional citizens in our society."
Wayne Lewchuk, Professor Emeritus, McMaster University, interview CTV News, 2024
Our solution
Canada Vision 21 believes that we must change the nature of income support programs in Canada for everyone over the age of 17. There should be a national Guaranteed Livable Basic Income (GLBI) in the form of a universal (at the point of delivery), non-conditional monthly cash payment with benefits gradually recovered as income rises. Ideally, the GLBI would reflect the actual costs of leading a ‘livable’ life in each specific region of Canada. We need current social assistance recipients and low-income individuals to have access to a new federally administered income support system that empowers them. Essentially, CV21 envisages a universal cash payment with tax back. It would combine the dignity and universality of a flat payment with a fiscal focus that would target the benefit toward lower-income households. It would avoid the stigma of means testing and extensive up-front intake interviews and would, by virtue of its claw back design, also avoid the dilemma of the poverty-trap which, under existing welfare-type benefits, can provide disincentives to seek work. It would not require participation in education, training or the labour market in order to qualify for receipt of the GLBI. The delivery method can be modelled on the Canada Child Benefit or the GST credit system which currently handle mass automatic deposits. CV 21 proposes a GLBI that would be calculated at 45% of the median private market income ($65,100 Statistics Canada, 2022) and would provide a sum of $29,295 for an individual (currently). A taper formula would operate for income in excess of $29,295. With this taper, a single individual could combine the $29,295 GLBI with earned income, keeping a positive financial incentive all the way up to twice the benefit level ($58,590 in earnings), at which point the GLBI would be fully phased out. Market income would remain subject to regular taxation (CV21 proposes using a 25% rate for modelling purposes), but combined with the GLBI, take-home income would always rise with earnings. As this new federal payment would remove some of the ‘social’ spending burden on the provincial & territorial governments, they would be required to maintain and improve spending on exceptional needs such as health and disability supports. In tandem with the new benefit, they would also be expected to continue to expand provincial and municipal plans to build non-market, affordable housing. The cost of poverty in Canada is estimated to be more than $80 billion per year in direct and indirect social costs; providing people with a GLBI will give a boost to gainful employment and business activity and likely reduce problems such as alcohol and drug abuse, crime and insecurity, and related policing costs, as people acquire some agency and dignity in their lives once again. Evidence from pilots around North America show overwhelmingly that participants in basic income schemes primarily spend their money on necessities such as food, rent, transportation and clothing. A GLBI and a new approach by the Provinces to non-market provision of housing for those with low to moderate incomes, and supportive housing for people with disabilities and substance addictions, is the solution CV21 will actively work to promote.