Title: Position Statement: Basic Income Guarantee
Location: GUELPH & WELLINGTON TASK FORCE FOR POVERTY ELIMINATION
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It is the position of the Guelph & Wellington Task Force for Poverty Elimination that poverty is an
urgent human rights and social justice issue for local, provincial, and federal governments. A Basic
Income Guarantee (BIG) is required as part of a coherent strategy to effectively eliminate poverty.
The Guelph & Wellington Task Force for Poverty Elimination believes that the perpetuation of poverty is both avoidable and untenable, particularly in a country as wealthy as Canada. The social and economic consequences of Canada’s persistent failure to eradicate poverty is well documented. The waste of human potential, as well as the costs to both current and future generations, calls on all of us to make poverty an urgent human rights and social justice priority for local, provincial and federal governments. It is the position of the Poverty Task Force that a Basic Income Guarantee (BIG) is required as a foundational piece of any coherent strategy to effectively eliminate poverty.
What is a Basic Income Guarantee?
A Basic Income Guarantee (BIG), also known as a Guaranteed Annual Income, is an unconditional cash transfer from government to individuals or families to provide a minimum annual income (Lammam, 2015). The Basic Income Canada Network asserts that a BIG “ensures everyone an income sufficient to meet basic needs and live
with dignity, regardless of work status” (2015).
Why is a Basic Income Guarantee necessary?
A Basic Income Guarantee (BIG) has the potential to eliminate poverty in Canada. Based on the Low-Income Measure After-Tax (LIM-AT), 4.6 million people in Canada, or 13.8% of the population, lived in poverty in 2013 (Statistics Canada, 2015). Rates were slightly higher in Ontario, where 14.6% of Ontarians lived in low income (Statistics Canada, 2015). While there are social insurance and assistance programs aimed to support those in financial need, some fail to lift recipients out of poverty. For example, while Ontario Works (OW) is intended to help people who are in temporary financial need, its benefit rates are often too low for families and individuals to make ends meet. For example, a single person on OW receives a maximum of $681 per month (includes basic needs allowance and maximum shelter allowance), or $8,172 annually. This falls nearly 60% below the LIM-AT threshold of $19,460 per year.
While the provincial government has made incremental increases to social assistance benefit rates in the past few years, there are examples of other benefits that have had a more direct and immediate impact on those living in poverty. The Guaranteed Income Supplement (GIS) provides a monthly non-taxable benefit to Old Age Security
(OAS) pension recipients who have low income and are living in Canada (Government of Canada, 2015). The introduction of this benefit, along with the Old Age Security (OAS) program and the Canada Pension Plan (CPP), has led to Canada having one of the lowest rates of elder poverty in world (Emery, 2013).
Aside from social insurance and benefit programs, many Canadians struggle while living in poverty despite being employed. At $11.25 per hour, an individual making minimum wage in Ontario working full-time throughout the year (35 hours per week, 50 weeks per year) will bring home $19,688 annually (before-tax). This falls below the
Low-Income Measure Before-Tax (LIM-BT) threshold of $22,160. While the province of Ontario continues to make commitments to increase the minimum wage in a bid to lift people out of poverty (the rate will jump to $11.40 per hour as of October 1, 2016), it continues to fall well below the living wage of $16.50 per hour for GuelphWellington (Ellery, 2015).
In addition to low wages, the rise of precarious employment has resulted in real implications for economic wellbeing.
Recent research suggests that 20% of those working in Canada are in precarious forms of employment, while another 20% are in employment that shares at least some of the characteristics of precarious employment.
This includes full-time employees who receive a wage, but no benefits, workers who may work variable hours, and workers who believe they are unlikely to be employed by the same firm a year from now (Lewchuk, 2013).
Inadequate social assistance benefits, low minimum wage rates, and precarious employment are just some of the factors that are contributing to the spread of poverty, which is having negative effects on the overall health and wellbeing of Canadians. Research continues to demonstrate that income is perhaps the most important social
determinant of health, noting that level of income “shapes overall living conditions, affects psychological functioning, and influences health-related behaviours” (Mikkonen, 2010).
The cost of poverty in Canada is also a point of consideration. It is estimated that the financial cost of poverty in Canada is between $72.5 billion and $86.1 billion per year (Citizens for Public Justice). This includes the cost of poverty on the Canadian healthcare system, social assistance spending, the Canada Social Transfer, the criminal justice system, and other factors (Canada Without Poverty, n.d.).
It is the position of the PTF that the introduction of a BIG is an integral part of any effective approach to eliminating poverty in Canada.