The advocacy group, Make Poverty History Manitoba (MPHM), is calling on the Province of Manitoba to “increase the basic needs budget to bring the total incomes of all Manitobans up to at least 75 percent of the [poverty line] in 2017, as part of a comprehensive plan.” More than 90 organizations support this move.
The idea of establishing a reasonable ‘basic income’ for Manitobans has been discussed for many decades. Forty years ago, a social experiment was conducted that gave residents of one community a ‘minimum income’.
Researcher Evelyn Forget, who studied the Dauphin MINCOME Experiment that was conducted in the late 1970’s, reflects on the study’s impact, particularly for welfare recipients. She cites the example of a single mother who was frustrated because she’d been denied the opportunity to take job training while collecting welfare.
“When she transferred to MINCOME, that decision was hers alone,” says Forget. “She soon had a part-time job that eventually became full time.”
Forget’s work, which is summarized in “The Experiment that Could End Welfare” in Alberta Views from May 2016, shows that a basic income may be possible in the near future, but there’s much to consider before a city like Winnipeg could make it happen.
This was one of several topics discussed at a conference at the Manitoba Legislature organized last month (on Nov. 16) by MPHM.
“When you are on EIA (Employment and Income Assistance), life is difficult. Money for spending is limited,” says Eva Beaudoin, who spoke at the gathering.
Beaudoin is an advocate with the Manitoba League of Persons with Disabilities (MLPD) and the DisAbled Women’s Network (DAWN) Canada.
“When you work [while receiving EIA benefits] so much is taken off your cheque,” she says.
Beaudoin raised three girls on EIA. “It is tough as you can’t give them what they want like what their friends have,” she explains. “I tried. I had to think, what will I do for Christmas?”
For their part, the government of Manitoba claims to be addressing these issues.
“The province is taking steps to improve programs that support Manitobans who face multiple barriers to employment,” says Manitoba’s Minister of Families, Scott Fielding.
“This includes building capacities and pathways to facilitate transitions from EIA dependence to long term success in the workforce,” he adds.
“Reforming Manitoba’s Employment and Income Assistance program is a current priority of our government in an effort to better help those who need it most,” says Fielding.
“In addition, the provincial government is committed to removing nearly 3,000 low income Manitobans from the tax rolls in 2017.”
The cost of a minimum income
Jordan Press, author of “Minimum income programs no magic bullet in poverty battle, report says” from The Canadian Press on October 5, 2016, found that a basic income can lift some people out of poverty but will increase taxes for the middle class.
“This could cost anywhere from $49 billion to $177 billion a year in new spending, depending on how much gets clawed back, requiring double-digit tax increases to cover the cost,” Press writes.
Gregory Mason, Professor of Economics at the University of Manitoba, says a minimum income policy would have plenty of challenges.
In his article, “Guaranteed Annual Income Difficult to Implement” in the Winnipeg Free Press on Mar 14, 2016, Mason argues Canadians want to work for pay and he questions if a minimum income would decrease the work ethic.
“As it turned out, relatively few [people quit work] because the income guarantee was too low to cover everything a family needs to participate in society,” writes Mason, who studied the MINCOME experiment in Dauphin. “Current proposals for the basic income would cover necessities.”
Laura Anderson and Danielle Martin agree there are plenty of considerations that need to be examined before proceeding with such a plan.
In their article, “Let’s get the basic income experiment right” in the Toronto Star on March 1, 2016, they raise the question, “How will people plan ahead?” The pair points out that in the MINCOME experiment, people went to school or raised families instead of working.
“Ontario’s provincial budget included funds for a basic income pilot project,” Anderson and Martin write. “And on that very day, Senator Art Eggleton tabled a motion calling on the Senate of Canada to encourage the federal government to do the same.”
Rethinking strategies to deal with poverty
At another conference on the same subject, organized by Winnipeg Harvest on Nov. 24, Dr. James Mulvale, Dean of Faculty of Social Work at the University of Manitoba, presented a hard look at the economic realities we presently face.
“People really have economic security on their minds these days. The supply of full-time well-paid jobs is shrinking,” says Dr. Mulvale, who also explains most jobs in the labour market are part time, casual, or term positions.
“People have a sense, the old ways of doing things aren’t working anymore,” he says, adding this is especially true for young people.
Cuts to social housing programs also reinforce this issue, says Dr. Mulvale, suggesting new ways need to be considered when dealing with poverty.
Here is Dr. Mulvale’s TED Talk on the issue:
Social cost of poverty
The Basic Income Canada Network (BICN) advocates for a fair labour market and fair taxation.
On their website, the BICN writes, “This is financially possible to have public revenues to fund basic income through a reform of the taxation system that restores equity and progressivity, and that draws upon new revenue sources such as resource royalties and Crown corporation income.”
Dr. Mulvale and Dr. Sid Frankel presented their research at the Winnipeg Harvest conference. Both are from the Faculty of Social Work at the University of Manitoba. Entitled, “Next Steps on the Road to Basic Income in Canada” is from the University of Manitoba Libraries and Hein Online In the Journal of Sociology & Social Welfare, in 2016.
Mulvale and Frankel cite work from the Ontario Association of Food Banks in 2008, led by business economists and policy experts. This study estimates the social cost of poverty for Canada is between $24.4 billion and $30.5 billion.
They also highlight further cost, namely, “Private costs are between $48.1 billion and $55.6 billion.” These include healthcare, justice, social services, school withdrawal, and missed employment opportunities.
Developing new tax credits to fight poverty
Frankel and Mulvale also cite a study by A. Jackson “We need a practical approach in the basic-income debate.” The Globe and Mail on March 17, 2016, which says, “[Canada needs] to selectively improve refundable income-tax credits and other income-support programs so that all household incomes after taxes and transfers meet a basic level.”
In this way, Frankel and Mulvale explain, there would be a refundable tax credit similar to the Canada Child Tax Benefit and the Old Age Security and the Guaranteed Income Supplement. They say this would “provide a non-stigmatizing and adequate income to working-age persons [with barriers to employment].”
Mulvale and Frankel call for an alternative, “a well designed system of income-tested benefits for low-income workers, including disability benefits, setting a basic income floor for all Canadians.”
David Macdonald’s “A Policymaker’s Guide to Basic Income” from the Canadian Centre for Policy Alternatives CCPA on October 5, 2016. offers various scenarios of how this could be given and taxed back.
For example, MacDonald, who is Senior Economist with the Canadian Centre for Policy Alternatives, says, “A $1,000 identical cheque to all Canadians on top of all existing programs [can be taxed] from existing programs at year’s end on tax returns.” MacDonald explains, “It would not require new government funding as nothing is cancelled to compensate for it.”
He says the results would be, “A fall in poverty from 11.7% to 9.7%, lifting 713,000 Canadians out of poverty, with the most significant impact on child poverty. This would cost $29.2 billion a year, equivalent to 14% of federal revenues in 2016,” MacDonald says. “GST would have to be almost doubled, from 5% to 9%, to pay for the new basic income.”
MacDonald offers another scenario dropping poverty from “11.7% to 9.3%, lifting 876,000 Canadians out of poverty.” This would “cost $14.5 billion and would be paid for out of GST revenue; the GST rate would need only increase from 5% to 7% (where it was until quite recently),” explains MacDonald.
He thinks this would benefit middle age men and women with disabilities, preventing them from losing child benefits, or not qualifying for other programs.
MacDonald and the CCPA encourage government to keep existing programs such as EIA and CPP. The basic income would be a separate program.
Looking for Manitoba’s action plan
Josh Brandon, Community Animator for the Social Planning Council of Winnipeg (SPCW) and Chair of Make Poverty History Manitoba (MPHM) coalition, spoke at both the Winnipeg Harvest discussion on Nov. 24 and the event at the Legislature on Nov. 16.
At these gatherings, he presented his work – “Fast Facts: Community looking for action plan from province on poverty” in November, 2016.
Brandon explains, “According to provincial statistics, 130,000 Manitobans [live below the poverty line].” He says this poverty line was $17,469 in 2013 for a single individual.
“Unfortunately, many Manitobans who rely on Employment and Income Assistance subsist far below this level,” says Brandon. “A single adult on EIA is at only 53 per cent of the poverty line.”
He explains, “This means she has only half the amount she needs for the basic necessities like food, shelter, clothing and transportation.”
Brandon adds, “An individual on disability is at only 68 per cent of the [poverty line], even though people on disability may often experience higher costs for equipment, health and other special accommodations.”
Brandon says the poverty crisis effects “26,000 Manitobans that would cost approximately $52 million annually. Manitoba has run away costs in services correlated with poverty like Health, Justice, and Child and Family Services,” explains Brandon. “According to the Winnipeg Street Census, a point in time count of people experiencing homelessness, almost half had spent time in foster care or group homes.”
Brandon continues, “The health costs of poverty are astronomical: diabetes costs alone are expected to rise to over $500 million by 2020 under current trends. Our existing approach to poverty is unsustainable.”
For these reasons, and with the support of more than 90 agencies, MPHM is calling for the basic needs budget in Manitoba to be increased to bring the total incomes of all residents up to at least 75 percent of the poverty level.
Have your say
The Province is looking for input in Manitoba’s upcoming provincial budget 2017.
Reports supporting these findings from November discussions on poverty:
Canadian Community Economic Development Network CCEDNet and CCPA’s “The View from Here: Manitobans call for a renewed poverty reduction plan” in 2015.
Make Poverty History’s EIA campaign is for EIA basic needs to be 75% of the poverty line in Manitoba.
Winnipeg Harvest and Campaign 2000 created the “Manitoba Child and Family Poverty Report Card” for November 22, 2016.
Background article spearheading this research
Evelyn L Forget’s “The Town with No Poverty – Using Health Administration Data to Revisit Outcomes of a Canadian Guaranteed Annual Income Field Experiment” from the University of Manitoba in February 2011
More articles from CNC on a Basic Income
Photos by Rebecca Trudeau, Youth Programs Associate, Winnipeg Harvest; and by Jennifer Doerksen, Communications & Marketing Associate, Winnipeg Harvest.