December 19, 2000
Kamloops Daily News


Prime Minister Chretien has assembled a top-level committee
to investigate the idea of a basic income, also called a
guaranteed annual income.  He says its not necessarily on
his government's agenda, but it should be.  The idea has
been supported by other Liberals,  Prime Minister Lester B.
Pearson for one, and by economist Milton Friedman.

Basic income would be universal -- paid to every Canadian
man, woman and child.  It would replace welfare, child
benefits, employment insurance, Old Age Security.  In fact,
Old Age Security is already a kind of basic income -- paid
to every retired person regardless of means.  A basic income
would be a more efficient and equitable means of
distributing Canada's wealth.

A basic income should be part of an overhaul of Canada's
social compact.  Our current system of welfare and
employment insurance is sadly out of date.  It worked fifty
years ago, after World War II when employment patterns were
relatively stable. Our old social compact was designed for a
time when unemployed were few and those on welfare were low.

Back then, homeless people were unheard of.  Now, poverty is
increasing at an alarming rate -- especially for single
mothers, for which the poverty rate is 50 per cent.  We step
over the homeless in our streets as if they have always been
there. The squeeze is on everyone.  Natural gas is going up,
and wages are going down.  

The government of Canada now ensures that millions of
Canadians are unemployed as a matter of policy.  The policy
is called the Non-Accelerating Inflation Rate of
Unemployment.  

It works like this.  As soon as unemployment drops too low,
the government takes this as sign that inflation is
increasing.  The Bank of Canada increases interest rates to
tighten the money supply, which then increases unemployment
to what they consider "normal".

A basic income would ensure that unemployed Canadians
receive an income regardless of whether they meet the high
qualifications of employment insurance or not.  A basic
income could actually stimulate the economy through
increased spending by millions of low income Canadians on
basic goods and services.

Redistribution of wealth is not un-Canadian.   As it is, the
rich provinces of B.C., Alberta and Ontario give to poorer
provinces.  A basic income would be similar except that it
would transfer money directly to individuals.

A basic income would not be taken away because a person
worked, which would encourage the poor and unemployed to
better themselves. Welfare and employment insurance
discourages employment.

With a basic income, parents who stay at home with children
(mostly mothers) would receive compensation for their work. 
So would those who care for aging parents (mostly women). 
With an aging population, a basic income could be a
lifesaver.

A basic income would be federally administered, which is
both its strength and weakness.  The problem with welfare is
that its administered by the provinces.  When the feds find
it expedient, they cut transfer payments to the provinces
for welfare and let them take the flack.

With a federally administered basic income, the federal
government would immediately come under attack if they tried
to mess with the plan.   Much in the way that they were
attacked when they tried to cut other federal programs such
as Old Age Security, the Canada Pension Plan, and employment
insurance in the Maritimes.  They quickly backed off.

The problem with federal administration of a new program is
political.  The provinces want to have control over
spending.  Also, after the last federal election, the
country is divided into distinct political regions: West,
Ontario, Quebec, Maritimes.   No political region wants to
grant any power to the federal government, regardless of how
beneficial a program  might be.

Another problem is one of perception, many Canadians
consider a basic income as undeserved, since it is not
earned by the sweat of their brow.  But investors in stocks
who receive dividends are not bothered.  Nor is a landowner
who possesses natural resources on his or her property. 
They happily sell the resources and enjoy the profit.

Well, all Canadians own the resources of Canada.  A basic
income is a dividend owed to everyone.   Prime Minister
Chretien recently said "The fact is that our prosperity is
not shared by all".  He should listen to his  heart and not
the bean-counters tugging at his sleeve. 
  

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