Basic Income is Essential to Fight Poverty

Government Bureaucracy

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I am truly honoured to have Hugh Segal on the Podcast. A former Senator for the Government of Canada, Mr. Segal is a big proponent of a Basic Income system.

In a Toronto Star article from 2010, Hugh states the following:

    • “I do not believe that, in a country such as Canada, fellow citizens must live so far below what we consider a poverty line that they are unable to provide the basic necessities of shelter, food and clothing for themselves and their children. And, based on the current allowances provided by the welfare system, I also refuse to accept that people purposely choose to avoid employment in order to subsist on such a paltry income.”

Despite this, Canadians still are divided on poverty and its root causes. In 2018, Angus Reid produced a poll to gather Canadians’ perceptions on poverty:

    • Roughly half of Canadians (52%) agree that “poor people have hard lives because government benefits don’t go far enough to help them live with dignity,” and nearly as many (47%) agree that “a good work ethic is all you need to escape poverty.

Why Basic Income When Poverty Rates are Declining?

Over the past 10 years, according to information released by Statistics Canada, the country has seen a decline in poverty.

Social Development Minister Ahmed Hussen pointed to introducing the Canada Child Benefit and increasing the Guaranteed Income Supplement for seniors as reasons for the decline. He said that the number of Canadians no longer living in poverty since the Liberals took power include 334,000 children and 73,000 seniors. For these reasons, a Basic Income program may not be necessary in a country like Canada. 

For Segal, the decline in overall poverty is not representative of specific groups that face barriers to success. These may include Indigenous people living on reserve, particularly young single women, who face all types of barriers. As such, it may be misplaced to use the national poverty rate as an indicator of whether or not governments should pursue a basic income.

Is a Basic Income Program Necessary to Fight Poverty?

The OECD’s Canada Report March 2021 states the following:

“Permanent change to income support may be required to make social safety nets more reliable and effective for the longer term. One route would be for provinces and territories to upgrade safety net welfare provisions, possibly with financial assistance from federal government. In principle, a guaranteed income scheme offers another solution. However, Chapter 2 concludes that such a scheme is likely to be expensive and may entail significant adverse labour supply effects.”

In 2017, the OECD undertook a study on Basic Income across a few European countries and found that significant tax increases would be a result:

As well, the OECD claims that big tax rises would be necessary to facilitate a Basic Income Program:

For Mr. Segal, a Basic Income program would not need increases in taxation as it would replace many existing social welfare programs that Canada currently has.