It’s About Poverty, Stupid!

Earlier this year, a pair of pundits  lamented the lack of grand policy ideas in Canadian politics. To no one’s surprise, this federal election has not radically changed the tone of our political discourse and the last few weeks have been fairly devoid of entrepreneurial policy debate. In a last minute effort to spice things-up, I thought I would throw my favourite grand policy idea into the ring and see if there are any takers. Steve, Iggy, Jack, and Gilles! Listen carefully because this is a game-changer!

To build some suspense, let me first tell you that this is a 40-year old policy proposal. At least some form of this policy has been endorsed by the Liberal Senator David Croll, the infamous Royal Commission on Economic Union and Development Prospects for Canada, Conservative Senator Hugh Segal, Prime Minister Pierre Trudeau, Manitoba NDP Premier and former Governor General Ed Schreyer, Martin Luther King Jr., Richard Nixon, and Milton Friedman. Amazingly, many years ago, this policy was also implemented at a trial level when the federal government and the provincial government of Manitoba partnered for five years and focused resources in Dauphin, Manitoba. This policy is sometimes envisioned as a single substitute for the myriad income security programs in Canada currently costing our government $130 billion annually. And this policy “guarantees” the elimination of poverty. Guessed what it is yet?

The policy I am talking about is the self-explanatorily named Guaranteed Annual Income. As generally conceived a GAI would be administered by the state and would ensure every citizen or permanent resident of a Canada receive an income which would be large enough to provide them with their necessities. My favourite version of the policy would see the federal government distribute a universal grant (valued at $1 above a market-basket-measure of poverty) to all persons regardless of income and regardless of willingness to work. This form of GAI would see subsistence income as a right of citizenship whose purpose is to: i) eliminate statistical material poverty, ii) achieve a more equal sharing of the economic benefits of society, iii) simplify the income security system in Canada,  iv) eliminate the stigma associated with income support, v) maximize the transparency and predictability of income support, vi) recognize the value of “unpaid” work while concurrently increasing marital and employment mobility, and vii) replace a considerably expensive income assistance system in Canada which has historically been ineffective.

Predictably, a GAI would require financing through an increase in tax rates or a widening of the tax base. However, it is important to remember that: i) we already spend over $130 billion annually on income assistance, ii) non-trivial savings will be achieved through the consolidation of assistance programs, iii) we should expect something as noble as poverty eradication to come at a price, and iv) a GAI could itself widen our tax-base by, for example, providing impoverished individuals with the foundation they require to find decent work. Related to this final point is the belief that a GAI also creates an economically valuable “culture of entrepreneurship” insofar as a GAI provides Canadians with an income floor which facilitates risk-taking or, at least, the pursuit of more rewarding but traditionally low-paying work, such as work in that arts, which may help to facilitate the emergence of a bohemian culture and thus attract a creative class. To be more draconian, a GAI might also reduce the need for minimum wages or business-related income security and thus drive down business costs and increase productivity.

The point here is that GAI is undoubtedly a big idea which can be approached from a variety of angles and which could generate a series of socially, economically, and politically valuable outcomes. This policy, however, is absent for our political debates and I think that says something about the political community’s appetite for poverty eradication. A politician truly committed to the eradication of poverty should have the courage to at least put something like GAI on the table for this election and beyond.

– By Dylan Marando

President, SCW Canada

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