by Kate McFarland | Dec 8, 2016 | News
In a unanimous decision on Tuesday, December 7, the Legislative Assembly of Prince Edward Island (PEI), Canada, agreed to “pursue a partnership with the federal government for the establishment of a universal basic income pilot project” on PEI.
Peter Bevan-Baker
CC BY-SA 3.0
The motion was originally proposed by Green Party Leader Peter Bevan-Baker, and received the support of all four political parties in the province, which have been united for well over a year in their support for investigating a basic income guarantee (BIG).
Bevan-Baker drew inspiration from past experiments in Manitoba (the Mincome trial of the late 1970s) as well as the pilot scheduled to begin next year in Ontario. He believes that PEI’s small size — the island has only about 150,000 residents — would make it an ideal setting for an additional pilot study. Hugh Segal, adviser for the Ontario pilot, has also encouraged other provinces, such as PEI, to run their own trials of basic income.
According to Bevan-Baker, a pilot project is necessary “so we can evaluate whether the benefits outweigh the costs” — as quoted in a CBC News report about the successful motion — where the costs, in his view, might include a work disincentive effect as well as financial costs to the government. The main benefit specified in the motion is the reduction or elimination of poverty. However, the motion also mentions many other possible positive effects, including “local economic growth, supporting entrepreneurship, reducing administrative complexity and costs, improving working conditions, reducing crime, improving health, and helping to build vibrant rural communities.” CBC News quotes Bevan-Baker as saying, “A universal basic income could enable the greatest unleashing of human potential ever seen.”
The full text of the motion is as follows:
WHEREAS implementing a universal basic income in Prince Edward Island would significantly reduce or potentially eliminate poverty in the province;
AND WHEREAS a universal basic income would likely have many other positive effects,
including local economic growth, supporting entrepreneurship, reducing administrative
complexity and costs, improving working conditions, reducing crime, improving health, and helping to build vibrant rural communities;
AND WHEREAS all four Prince Edward Island political parties have indicated their support for exploring a universal basic income;
AND WHEREAS the federal government has indicated an interest in exploring a universal basic income;
THEREFORE BE IT RESOLVED that the Legislative Assembly urge government to pursue a partnership with the federal government for the establishment of a universal basic income pilot project in Prince Edward Island;
THEREFORE BE IT FURTHER RESOLVED that Government shall provide an update on the progress of this initiative in every session of this assembly.
The motion is still only an early step toward a basic income pilot in PEI. If the province is to actually implement a pilot, it will require cooperation and support from the federal government. The PEI Department of Family and Human Services has previously issued the following statement:
The Province supports the concept of the Basic Income Guarantee. We have been consistent in our response that any pilot project in this area would require active and committed federal participation. We are always open to partnerships with the federal government to improve the financial well being of the residents in our province.
No specific model for the basic income has been proposed for the (possible) pilot. The Working Group for a Liveable Income — an advocacy group that has been instrumental in promoting BIG in PEI for over a decade — explicitly supports a negative income tax (NIT), in which “if the person receiving BIG gets other personal income, the maximum level benefit will be affected by a reduction rate”. Segal has also recommended an NIT for the Ontario pilot. While ‘universal basic income’ is often used to refer to a universal cash grant with no reduction based on other earnings, in contrast to a NIT (cf. “What is the Basic Income Guarantee?”), it is not certain whether the PEI motion intends the phrase in this sense (which would entail that PEI is pursuing a form of BIG less commonly discussed in Canada).
References
Motion No. 83, Legislative Assembly of Prince Edward Island.
“P.E.I. MLAs effusive in their support for basic-income pilot project,” CBC News, December 7, 2016.
Kevin Yarr, “’A rare opportunity’ for basic income pilot project on P.E.I,” CBC News, November 23, 2016.
Reviewed by Dawn Howard
Photo CC BY-NC-ND 2.0 Government of Prince Edward Island
by Guest Contributor | Dec 6, 2016 | Opinion
Written by: Pierre Madden
On November 12 and 13 I attended a congress of the Liberal Party of Quebec, which is currently in power in the province.
The Minister of Employment and Social Solidarity, François Blais, confirmed that a joint working group, with his colleague in Finance, will issue a preliminary report on Basic Income in the Spring. Our neighbouring province of Ontario (which, together with Quebec accounts for 62 percent of the population of Canada) was just released a working paper on a pilot project to begin in April 2017. Quebec does not seem to be leaning towards a pilot project.
In his talk, Minister Blais placed much emphasis on the principles underlying the development of the government’s project:
- The development of human capital (though education, for example)
- The obligation of protection from certain risks (with unemployment insurance and health insurance, for example)
- Income redistribution
The minister’s speech was highly focused on incentives to work or study (especially for the illiterate or those without a high school diploma).
The principle of unconditionality, a fundamental aspect of Basic Income, will likely not be a feature of the government’s plan.
On the second day of the congress it was the minister’s turn to ask me if he had answered my question. I described my own situation as a case in point. I am 62, three years away from my public pension which here in Canada is sufficient to raise most people out of poverty (works for me!). Why would the government be interested in the development of my human capital? The minister replies: “In a case like yours, we would have to go back in time to see what choices you made.” I have several university diplomas, which doesn’t help his argument. I am still either underemployed or unemployable.
The minister could only answer: “I would have to know more about your individual case.”
And that is what the government does and will continue to do for all those considered “fit for work.” Petty bureaucratic inconveniences for those “unfit for work” will be removed and their inadequate benefits will be improved by dipping into the funds previously used for the “fit” as they return to the workforce. The government sees no difficulty in a law it passed just last week (Bill 70: An Act to allow a better match between training and jobs and to facilitate labour market entry). The government highlights the positive measures it imposes to help participants join the job market. Those who prefer a non-paternalistic approach (“Give me the money and let me make my own decisions”) are penalized.
The irony is that before he entered politics Minister Blais actually wrote a book in support of Basic Income for all. He confirmed to me that he still believes what he wrote 15 years ago.
In Canada, both the federal and the provincial governments partially reimburse sales tax. Here in Quebec, the Solidarity Tax Credit refunds part of the estimated sales tax paid by consumers. The higher your income, the lower the monthly payout, so it works like a negative income tax. The minister was asked about this as a stepping stone towards Basic Income. He simply said it would be “a more radical approach.” Of course, tax credits don’t impact on “human capital.”
You can be sure I will be rereading François Blais’ book when his work-group’s report comes out next year.
About the author: Pierre Madden is a zealous dilettante based in Montreal. He has been a linguist, a chemist, a purchasing coordinator, a production planner and a lawyer. His interest in Basic Income, he says, is personal. He sure could use it now!
by Kate McFarland | Dec 6, 2016 | News
Andrew Weaver, a climate scientist and member of British Columbia’s Legislative Assembly for the Green Party, has proposed that the province test a basic income guarantee in one or more of its towns.
Weaver outlined his recommendations for a BC pilot in a report in The Tyee. Rejecting Hugh Segal’s recommendation for a three-year pilot in Ontario pilots as inadequate, Weaver believes that the pilots should run for at least five years (“the amount of time it takes to finish a post-secondary degree”).
He also recommends conducting the trials in towns of 5,000 to 6,000 people, preferably with wide income inequality, and possibly testing different implementation in different towns. Regarding eligibility for the pilot, Weaver says that “a Green government would likely determine eligibility based on the tax year before the announcement is made, thus avoiding an influx of people hoping to opportunistically take advantage of the payments.”
The Green Party of British Columbia won its first seat in the provincial legislature in the 2013 general election, when Weaver was elected to represent Oak Bay-Gordon Head district in the Greater Victoria region. Overall, the Greens received about 8% of the popular vote. The next British Columbia general election will be held on May 9, 2017. Kamloops This Week reports Weaver as declaring that if the Greens were to take office, they would attempt to implement a basic income pilot by the end of the first year. At present, however, this remains a very big “if”.
A series of posts on Weaver’s blog, contributed by Sarah Miller, explore the idea of a basic income and its implementation in British Columbia:
References
Andrew MacLeod (November 26, 2016) “BC Greens Pitch a Five-Year Basic Income Pilot Project” The Tyee.
Jessica Klymchuk (November 30, 2016) “Green Leader Weaver visits Kamloops, chides NDP for accepting corporate donations” Kamloops This Week.
Reviewed by Dawn Howard.
Photo (Sandon, British Columbia) CC BY-NC-ND 2.0 Jasperdo
by Kate McFarland | Nov 27, 2016 | News
Warren (Smokey) Thomas, president of the Ontario Public Service Employees Union (OPSEU), has issued a cautionary statement against the province’s interest in pursuing a basic income guarantee.
The OPSEU leader’s statement comes in response to the comprehensive report published by Hugh Segal, the lead adviser to the Ontario government’s impending pilot study of a basic income guarantee, which was published on November 3.
Thomas worries that the adoption of a basic income guarantee, which enjoys much of its support from politicians on the right, would be followed with cuts in essential public services:
“Basic Income has had the support of right-wingers for decades now because of the expectation that it would reduce the government’s role in providing services, and shift that work on to families and communities. Given the direction the current Ontario government is taking on social services, I think Ontarians have every reason to be skeptical.”
“We support the goals of raising incomes for people living in poverty. We support extra counselling. We support reducing the stigma associated with social assistance. But we aren’t convinced Basic Income will do these things. If anything, it may make people a little less poor, for a little while, until public services end up on the chopping block. I’m worried that this Basic Income is just part of the Liberals’ larger plan to further privatize the province.”
Instead of a basic income guarantee, Thomas supports raising the minimum wage, expanding and increasing existing social assistance programs like Ontario Works (OW) and the Ontario Disability Support Program (ODSP), and maintaining funding for public services.
Segal argues in his report that a basic income should be tested as a replacement for OW and ODSP, which place limits on recipients’ earned income and work participation and thus require extensive monitoring of recipients. OW, for example, requires that recipients demonstrate “financial need” and prove that they are making “reasonable efforts” to obtain employment (in the absence of extenuating circumstances). ODSP requires that recipients document proof of a disability. According to Segal, the main purpose of the pilot is to test the effectiveness of an unconditional income guarantee against what he describes as “broad policing, control, and monitoring” inherent in these programs.
If Segal’s recommendations are adopted, Ontario’s pilot will examine–among other impacts–the cost of administering a basic income guarantee in comparison to OW and ODSP, as well as its relative effectiveness in improving health, education, and workforce participation. Segal also urges that the pilot be designed such that no participant would be financially worse off under the basic income guarantee than under these existing programs.
Thomas’s skepticism is not an unusual response from a progressive critic of basic income. In the United States, for example, anti-poverty researcher and advocate Robert Greenstein (President of the Center on Budget and Policy Priorities) has argued that any politically feasible basic income has a high risk of leaving tens of millions of poor Americans worse off–since, to attract right-wing supporters, the policy would most likely accompany massive cuts in other programs and services (see also Greenstein’s interview in Vox). Earlier in the year, writer and attorney Joel Dodge raised similar concerns about right-wing basic income proposals in an interview with Basic Income News (following up on his article for Quartz on the same topic).
Thomas’s remarks were publicized via a OPSEU press release. The OPSEU represents more than 130,000 employees of the provincial government of Ontario (as reported on its website).
The government of Ontario is currently accepting public feedback on Segal’s report, both online and via in-person meetings, until January 31, 2017.
Reference
“OPSEU sounds note of caution on Basic Income plan” (OPSEU Press Release from November 18, 2016).
Article reviewed by Genevieve Shanahan
Top photo: OPSEU at Toronto Pride Parade, CC BY-NC-SA 2.0 David Allan Barker
by Kate McFarland | Nov 4, 2016 | News
The latest step to Ontario’s basic income pilot occurred on Thursday, November 3, 2016, when the Ministry of Community and Social Services released a call for public input on the design and objectives of the study and published a new comprehensive report from Project Adviser Hugh Segal.
In February 2016, the provincial government of Ontario, Canada announced a budgetary commitment to finance a pilot study of a basic income guarantee. In June, the government appointed former senator Hugh Segal — who has been promoting basic income in Canada for more than a decade — as the project’s Special Adviser. (For some of Segal’s past writings on basic income, see here.)
Segal has now released a detailed and comprehensive discussion paper in which he lays out his recommendations for the design and administration of the pilot. The government is soliciting input from the public before it makes its final decision.
This release of this proposal for Ontario’s basic income study closely follows the publication of details about the upcoming pilots in Finland and the Netherlands, as well as the charity GiveDirectly’s study in Kenya.
A Negative Income Tax Model
If the provincial government of Ontario decides to adopt Segal’s newly announced proposal, it will test a basic income guarantee (BIG) — wherein cash payments are disbursed automatically and unconditionally to individuals whose income falls below a certain threshold — as a replacement to its Ontario Works program and Ontario Disability Support Program.
Segal recommends that participants in the pilot be guaranteed a monthly income of at least $1320, or 75 percent of the province’s Low Income Measure, with an additional $500 supplement to those with disabilities.
In Segal’s proposal, the BIG is to be structured as a negative income tax (NIT), in which the amount of the subsidy is tapered off for higher earners, in contrast to a “demogrant” model wherein all participants would receive a fixed monthly payment regardless of other earnings. That is, the government would “top up” the earnings of pilot participants whose incomes fall beneath $1320 (or other level chosen for the basic income guarantee). Those who earn more than $1320 per month would receive smaller benefits or, depending on earnings, none at all.
Eligibility is to extend to all residents of the selected communities between the ages of 18 and 65, regardless of current income. All participants will be guaranteed a minimum income, as per the NIT model summarized above. However, depending on their initial and subsequent earned income, some participants may not receive any payment during the course of the experiment. As Segal’s discussion paper notes, “even though the program is based on a principle of universal access, not all participants will receive symmetric payments or any payment at all.”
Segal offers two reasons for his recommendation that the pilot test a negative income tax rather than a universal demogrant. First, this makes the design unique: no other planned trial of a basic income guarantee will employ the NIT model; thus, outside of Ontario’s pilot, no data on the impact of this specific model will be collected. Second, Segal believes that a demogrant, unlike an NIT, is not realistically affordable in Canada (nor in other developed nations).
Experimental Design
Segal recommends two types of studies:
(1) A randomized control trial, to be conducted in an urban center, in which different treatment groups receive different levels of guaranteed income and/or pay different rates of taxes on additional earned income. Subjects will be randomly sampled from all residents (of at least one year) between the ages of 18 to 65, with participation in the experiment being voluntary. Participants would then be randomly assigned to one of four groups, including a control.
(2) “Saturation sites” in which all members of a community receive the basic income guarantee (and are subject to corresponding changes in the tax schedule). Ideally, according to Segal’s report, “one saturation site would be located in southern Ontario, one in northern Ontario, and one would be chosen and planned in close collaboration with First Nations communities.”
In each case, the study is to last a minimum of three years.
Measured Outcomes
According to the discussion paper, the “core question” that Ontario’s pilot endeavors to answer is, in Segal’s words, “Is there a more humane and efficient way to reduce poverty, a way that better respects the rights of those in poverty to make their own life choices, reduces stigma and growth in bureaucracy, yet produces improved outcomes in terms of work and life prospects?”
In order to answer this question, Segal lays out many variables that he urges researchers to monitor and analyze in the pilot, including the following:
- Administrative costs or savings to the government.
- Health outcomes, as measured by (for example) prescription drug use or number of visits to primary care physicians, emergency departments, and hospitals.
- “Life choices” such as career decisions, education decisions, family decisions, and choices in living arrangements.
- Education outcomes of participants and their children, including completion, attendance, and standardized test scores.
- Work behavior, including employment status, hours worked, number of jobs, and participation in job-search activities. The report mentions participation in the underground economy as another outcome of interest.
- “Food security” status as assessed through the Canadian Community Health Survey and the researchers’ own surveys or interviews.
- Subjects’ “perceptions of their place in society, their capacity to contribute, their social environment’s capacity to protect them” as collected through interviews.
- Interactions between the basic income guarantee and other welfare programs (e.g. the Canada Child Benefit).
- In saturation sites, community-level impacts such as changes in rent and prices of goods and services, crime and incarceration rates, civic participation, and the use of public services.
Thus, the Ontario pilot is likely to examine a much wider and more diverse range of outcomes than the impending basic income pilots in Finland and the Netherlands, which focus more narrowly on assessing the impact of a basic income guarantee on employment.
This difference follows in part from a deliberate decision not merely to reproduce these studies. Segal states Ontario should not duplicate research being conducted elsewhere, for the sake of “maximiz[ing] the diversity of various different data sets generated by such endeavours.”
National Context
Segal recommends that Canada’s federal government “consider partnering with any willing province on any Basic Income pilots now being considered or contemplated.”
As Segal describes in the report (links added), Ontario is not alone in Canada in its interest in pursuing a basic income pilot:
“[T]he federal government introduced an enhanced child benefit in July 2016, with the objective of constructively increasing the income of low and middle-income Canadian families with children. Moreover, the House of Commons Finance Committee recommended in its pre-budget report that the government of Canada move forward with a pilot project on Basic Income.
“In its most recent ministerial mandate letter, the government of Quebec instructed the Minister of Employment and Social Solidarity to modernize income support programs and embrace better ways of reducing poverty, including a Basic Income guarantee. The Quebec Liberal Party Youth Wing, in August 2016, summoned the government to implement a Basic Income guarantee in lieu of the province’s current welfare system. The government of Nova Scotia has initiated a comprehensive social support review looking for better ways to eliminate the welfare wall and to better support the working poor. The mayors of Calgary and Edmonton have welcomed the idea of a Basic Income guarantee and associated pilot projects, as has Alberta’s Minister of Finance. In August 2015, the Government of Saskatchewan Advisory Group on Poverty Reduction also recommended a Basic Income pilot.”
Call for Input
As announced on November 3, 2016, Ontario’s Ministry of Community and Social Services will be conducting consultations to solicit public input on the basic income trial, guided by Segal’s discussion paper. Consultations will run through January 2017.
Those who want to provide input may contribute in one of two ways: attend an in-person meeting (see the schedule here) or share feedback online (until January 31, 2017).
The first stage of the pilot study — selecting the sites, obtaining access to data sources, and selecting and obtaining consent from participants — is slated to commence before the end of March 2017.
More Information
News release from the Ontario government (Ministry of Community and Social Services): “Ontario Seeking Input on Basic Income Pilot”
Discussion paper: “Finding a Better Way: A Basic Income Pilot Project for Ontario” by Hugh Segal.
Thanks to Jenna van Draanen for proofreading a draft of this article.
Cover photo: “Terminally Invisible” CC BY-NC 2.0 Kat Northern Lights Man (taken in Toronto, Ontario).
