Guaranteed Livable Basic Income

GLBI Wiki is meant to be a tool to educate on the Canadian Basic Income concept. It is not intended to be used for other Countries or comparing to existing programs like EI.

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Guaranteed Livable Basic Income (GLBI) in Canada refers to the debate and trials with basic income, negative income and related welfare systems in Canada. The debate goes back to the 1930s when the social credit movement had ideas around those lines. Following in 1940 with the establishment of the Employment Insurance system, 1945 for Maternity Benefits (EI) and the Family Allowances Act, which was the first universal welfare program implemented in Canada under the leadership of William Lyon Mackenzie King. As a government Income Security Expenditure, payments were transferred directly to the individual who qualified for them, in this case the mother of the children concerned¹.

During the decades that followed, GLBI has been supported in various forms by different Political Parties, which have at times been at odds with how to implement such a strategy while not impeding on Provincial jurisdiction.

GLBI vs UBI

Guaranteed Livable Basic Income is not Universal Basic Income. While UBI is considered cheaper per person to maintain from a 'Universal' and 'Administrative' standpoint, a GLBI being means tested recovers funding by ensuring cost-effective income testing. For GLBI, this is done on an annual basis, contrary to the existing Social Support systems in place provincially that test income on a monthly basis (ex. PEI).

Since 2017 GLBI according to the Ontario Basic Income Pilot formula, and adjusting for inflation based on the SPSD/M 28.0 2022 Calendar Year Low Income Measure (citation needed), has raised by over twelve percent. This is almost consistent with the Bank of Canada Inflation Calculator estimate of 14.88 percent over 5 years.

History

The humanist philosopher Thomas More, writing in his seminal 1516 work Utopia, argued for a universal basic income.

The Nobel Prize winning activist Bertrand Russell proposed in 1918 that a universal basic income, "sufficient for necessities, should be secured for all, whether they work or not, and that a larger income should be given to those who are willing to engage in some work which the community recognizes as useful. On this basis we may build further."

Bertrand's view was that providing the basic needs of every citizen would free them up to work on more important societal goals and live more harmoniously with their fellow man.

After World War II, economist Milton Friedman floated the idea of a guaranteed income. Friedman wrote:

"We should replace the ragbag of specific welfare programs with a single comprehensive program of income supplements in cash — a negative income tax. It would provide an assured minimum to all persons in need, regardless of the reasons for their need…A negative income tax provides comprehensive reform which would do more efficiently and humanely what our present welfare system does so inefficiently and inhumanely."²

In 1935, the Employment and Social Insurance Act was enacted by the Parliament of Canada, during the final months of the government of R. B. Bennett. The Act was intended to introduce a nationwide employment insurance scheme, and also convince voters that Bennett was willing to intervene aggressively in the economy, as President Roosevelt had done in the United States with the New Deal. However, the Act was not incumbent of any type of Guaranteed Income.

At the same time, William Aberhart, Premier of Alberta, was inspired by Major C. H. Douglas Social Credit theory and tried to implement a basic income for Albertans during the 1930s. However, he was thwarted in his attempts by the Federal Government of the time. ³

In 1936, the Employment and Social Insurance Act was ruled unconstitutional by the Supreme Court of Canada, as unemployment insurance was found to fall under one of the heads of power assigned by Canada's constitution to the provinces. The ruling of the Supreme Court was upheld by the Judicial Committee of the Privy Council in 1937. The Employment and Social Insurance Act therefore failed to achieve its policy goal, as Canada was left for a time without unemployment insurance.

This change in position followed the Privy Council's decision in the Aeronautics Reference, which declared:

There may also be cases where the Dominion is entitled to speak for the whole, and this not because of any judicial interpretation of ss. 91 and 92, but by reason of the plain terms of s. 132, where Canada as a whole, having undertaken an obligation, is given the power necessary and proper for performing such an obligation.

The first compulsory national unemployment insurance program was instituted in August 1940 under the King government after a constitutional amendment was agreed to by all of the Canadian provinces, to concede to the federal government legislative power over unemployment insurance. New Brunswick, Alberta and Quebec had held out against the federal government's desire to amend the constitution but ultimately acceded to its request, Alberta being the last to do so. The British North America Act s. 91 was amended by adding in a heading designated Number 2A simply in the words "Unemployment Insurance".

Actual Pilots

There have been 2 pilots in Canada thus far, that have been funded directly from provincial governments in the search for viable data towards a Basic Income in their province. In the late 1970's Manitoba had their pilot, and in the 2010's for Ontario. Both pilots ended with a change of government and no renewal or cancellation.

It is without certainty if Manitoba's Mincome experiment would have continued if it was without a change in government. In Ontario, the cancellation of the Basic Income Pilot was without public consultation or warning, propelling those 4,000 recipients back onto provincial programs that were more than a $700 drop per month in income, nearly equal to the entire funding of Ontario Works as a single recipient at maximum rate. After the cancellation of Basic Income in Ontario, there was no rate increase for the system for nearly 4 years. Currently Ontario is in an election, so it is uncertain if it will be relaunched under Ontario Liberal or NDP governments.

Mike Morrice who is the Ontario Greens Leader, has openly encouraged his support for GLBI as a means to help the vulnerable population like recipients of the Ontario Disability Support Program, while waiting for the Canada Disability Benefit as well.

Manitoba Mincome

The Manitoba Basic Annual Income Experiment (Mincome), conducted some 40 years ago, was an ambitious social experiment designed to assess a range of behavioural responses to a negative income tax, a specific form of Guaranteed Annual Income.

Prompted by the analysis of poverty from the Economic Council of Canada (1968), the Special Senate Committee on Poverty (1971) recommended implementation of a federally financed and administered Guaranteed Annual Income (GAI) program to address poverty. The Manitoba government led by Ed Schreyer was receptive to the idea of an experimental project to test such a program and submitted a proposal for funding to the Department of National Health and Welfare in March 1973. The minority federal Liberal government led by Pierre Trudeau, which had called for a review of Canada’s social security system in the 1973 Throne Speech, was also receptive to the idea of a trial guaranteed income plan. The two governments entered discussions and reached formal agreement on the budget for a Basic Annual Income Experiment Project in June 1974.6

"Over the years, but particularly in the 1960s and 1970s, considerable effort has been spent in the examination of this system [of personal income and transfers] and its component programs, with a view to identifying potential improvements in the areas of fairness, effectiveness, efficiency, and simplicity. These interests led to one of the most significant social experiments in Canadian history, namely the Manitoba Basic Annual Income Experiment (Mincome)." —Judith Maxwell, chairman of the Economic Council of Canada, in the Foreword to Hum and Simpson (1991, ix).6

Results

No final Mincome report was issued, but a federal grant established the Institute for Social and Economic Research at the University of Manitoba in 1981. The institute developed a machine-readable database of the results of Mincome, leaving the analysis of the experiment to individual academic initiatives.

Ontario Basic Income Pilot

In June 2016, the Province of Ontario asked the Honorable Hugh Segal, a former senator, to provide advice on how to design a basic income pilot project.

In his subsequent discussion paper, Segal recommended that the province test a negative income tax model that provides recipients with 75 per cent of the low-income measure, regardless of their employment status.⁴⁵

References

[¹]Guest, Dennis. (2013). Family Allowance, The Canadian Encyclopedia
[²]Murse, Tom. "Should There Be a Universal Basic Income in the U.S.?" ThoughtCo, Feb. 16, 2021
[³]Mulvale, James P. (2008), Basic Income and the Canadian Welfare State: Exploring the Realms of Possibility. Basic Income Studies, 3(1)
[⁴]Parliamentary Budget Officer (PBO), Costing a National Guaranteed Basic Income Using the Ontario Basic Income Model April 17, 2018
[⁵]The Progressive Economics Forum. (2006). Pondering a Guaranteed Annual Income, September 7, 2006
[⁶][https://www.umanitoba.ca/media/Simpson_Mason_Godwin_2017.pdf The Manitoba Basic Annual Income Experiment: Lessons Learned 40 Years Later. (2017). Published by University of Toronto Press]