How could basic income work in N.L.? This coalition has a plan

A grassroots coalition of basic income advocates has taken the first step toward a concerted push for the policy in Newfoundland and Labrador.

Anti-poverty workers spanning 10 community organizations met Wednesday to release a policy paper envisioning how the province can implement a basic income model, which would provide a baseline minimum income for all adult residents.

The paper — "A Basic Income for Newfoundland and Labrador: Opportunities, Options and Analysis" — recommends a refundable tax credit framework based on a percentage of the poverty line, which Statistics Canada has drawn at $22,050 annually. If the paper's recommendations are followed, no one in the province would drop below this threshold.

A cash injection on that scale would require multiple streams of revenue, the paper proposes.

Existing tax benefits, such as the tax reduction and income supplement, could be folded into a basic income program. The paper also floats a two percentage point increase to the top earning brackets as another option to fill the coffers, and cites eventual savings from reducing the costs of poverty down the line. 

For the paper's authors, post-COVID-19 recovery poses an ideal opportunity to test such a program.

"We've seen a tremendous amount of increases in poverty, unemployment, food security and concerns around housing affordability," Doug Pawson, executive director of End Homelessness St. John's, said Wednesday.

"And we know that adopting a basic income program could really help alleviate many of those poor health, social and economic outcomes that currently exist."

The paper includes economic analysis from Harvey Stevens, an economics professor at the University of Manitoba, who also created models for the basic income proposal in Prince Edward Island. Various cost-estimate models are detailed in the paper, ranging from $471 million to $3.8 billion. Calculations for potential revenue sources are also included, with existing tax benefit estimates amounting to $82.3 million, additional taxation options estimated at generating between $628 million and $1.2 billion, and potential savings from poverty reduction coming in at $959 million.

The paper's authors say the national conversation on basic income has gathered momentum during the pandemic, especially in light of support provided by the Canada emergency response benefit, which issued cash transfers to people who lost income. That money, like basic income, came with no strings attached — recipients could spend it however they saw fit.

In Newfoundland and Labrador, 121,260 residents availed of the benefit, offering many people a window into how a basic income system could operate in the province.

Advocates also point out that current social assistance programs deliver significantly less income support than that offered by CERB.

"When the pandemic came in and we started with CERB … the government decided that people needed about $500 a week to live on," activist Debbie Wiseman told The St. John's Morning Show. 

"Social assistance right now — or income support, they call it — is less than half of that. And so we're expecting people to live on less than half of the ongoing poverty rate. Basic income would lift people up to the poverty rate, which is about $20,000 a year."

On Wednesday, Wiseman said she's witnessed first-hand how poverty is affecting people in the province.

"I've seen people who choose between food and paying rent or light bills, people who don't turn on their heat for the winter because they can't afford the extra amount that would add to their bill," she told reporters. 

"I myself grew up poor and I know how hard it is to escape poverty. And I believe poverty is a policy issue."

Critics say basic income programs discourage work, arguing that handing residents free money could discourage finding and holding down jobs. Widespread research — including an analysis of Ontario's prematurely cancelled basic income pilot project — argues otherwise, however.

That analysis revealed that nearly three-quarters of respondents kept working while receiving basic income. And while some of Ontario's pilot project participants did stop working, about half of them headed back to school for retraining.

Paula Sheppard, who leads the province's status of women advisory council, said a basic income could help more people go to school, start businesses, and even create jobs for others.

"The end result, of course, is more earning potential and a more productive society," she said, not less productivity, as naysayers may fear.

Even last year's Liberal government climbed on board, with all MHAs voting to strike an all-party committee to study a basic income pilot. That committee never materialized, however, and House members have yet to revive it in the current session. 

In order to realize the larger-scale options proposed in the working group's paper, Food First NL director Josh Smee suggested Ottawa would need to pitch in — a sentiment echoed by St. John's East MP Jack Harris last year.

But even without federal support, Smee said elements from the design proposal could be incorporated as an intermediate step.

"Probably all of us would love to see tomorrow a truly universal basic income for everyone," Smee said. "But within that spectrum, there's still wins that can happen before you get all the way there, I'd say."

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