Front Burner - Year K: A Canadian guaranteed income?
Episode Date: September 15, 2020Just months ago, the idea of a guaranteed basic income wasn’t on the mainstream political radar in Canada. Now, the federal Liberal Party could make it a top policy priority for their November conve...ntion. The concept is gaining ground, but it remains highly controversial — on both sides of the political spectrum. Today, freelance journalist Max Fawcett joins us for a primer on UBI. This episode is the first in our ongoing series Year K, about whether the economic recovery from COVID-19 will make Canada more - or less - equal.
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Hey everyone, Josh here. Over the last six months on this show, we've been covering COVID-19 a lot,
obviously. And a big theme that's emerged is how this virus has hit some people harder than others.
I'm talking about people of color who are more likely to get sick and die, the elderly and low
income people, migrant workers, people with addictions and prisoners. You can find all
those episodes in our feed. And as we head into the next
stretch of life under COVID, we're going to stick with this theme. But we want to apply it to the
economic and social recovery. And so we have a whole series about it called Year K. Why Year K?
Because some economists think that the recovery could take that shape. You have some people
heading up into the black where the money's good, and others heading down into the red, into debt and into uncertainty. Today's show very much fits that theme. We're
looking at one proposal intended to keep everyone's head above water. Here it is.
Right, so I am on disability, Ontario Disability Support Program.
My husband works full time.
We still couldn't make ends meet.
There is a clawback on his employment off of our check.
And with increased costs in hydro and heat, we were looking at having to sell the house.
But the rents are so high now too.
This is Tracy Meshefsky. She and her husband live in the small town of Lindsay, Ontario.
Groceries, they became more expensive.
We found ourselves quite often going to the food bank.
That was terribly stigmatizing too.
So it was really a terrible rock and a hard place situation to be in.
And then the basic income pilot came along. In 2017, Tracy became one of 4,000 low-income
Ontarians to join one of the world's largest basic income pilot programs.
That we'll be launching here in the Hamilton area and in two other Ontario communities,
launching here in the Hamilton area and in two other Ontario communities, Lindsay and the Thunder Bay area. It's a great thing.
It was started by the former Ontario Liberal government under Kathleen Wynne, and
the plan was to pay participants up to $17,000 a year for three years, no strings attached.
It says to them, government is with you. The people of Ontario are with you.
And the idea was to study the impact of a universal basic income.
Tracy says the extra money changed her life.
We didn't have to worry about where to get food.
We could pay all our bills with just a small hand up, not a handout, because we made everything work.
We were not only able to pay our bills, but I was also able to start a business
that I've wanted to do for years. I took out a personal loan and I used that to start the
business, knowing that I'd have these guaranteed income payments to pay the loan down. The dignity
that I felt to be able to say I'm owner and operator of a business. Tracy also has chronic
pain and mobility issues, and she says those improve too. With the extra money, I took out a
membership to the YMCA. I started swimming every day that I had the opportunity. In the three years from the start of the basic income.
I've lost 100 pounds.
I've lost six sizes.
In 2018, when Doug Ford ran for premier,
he promised to keep the basic income pilot going.
But after his government came to power,
they decided to cancel it.
The Liberals presided over a disjointed patchwork system
with no interest at all in whether these programs delivered results.
Social Services Minister Lisa McLeod said the program failed to help people
become independent contributors to the economy.
Yeah, it ran for a year and a half out of the three before it got cancelled,
which has now left me in a financial crisis
because I don't have the money to pay the personal loan back
because I had projected the three years.
So unfortunately, I'm worse off than when I started the basic income
because of the government's decision to cancel it.
So Ontario may have scrapped its UBI pilot, but the concept still has some political life in it.
Quite a lot, actually.
Because right now, it has emerged as a top priority inside the federal Liberal Party
heading into their convention in November.
Today, a primer on UBI.
I'm Josh Bloch. This is FrontBurner.
My guest today is Max Fawcett. He's a freelance journalist who's written about this for The
Walrus and elsewhere. Hello, Max.
Hey, Josh. Thanks for having me on.
So, you know, I know that UBI can take a number of different forms, but generally,
what is the principle behind it and how does it work?
Yeah. So like you say, there's a lot of different configurations that it can take, but at its most basic form, the idea is rather than funding programs and services that target people
who are low income or who need social assistance, you just send them a check. The idea is that by
giving people money, letting them choose what they want to do with it, rather than trying to get them
to apply for programs, deliver the programs, it's a more efficient way of delivering social support.
Right. And the federal government is now figuring out their policy priorities ahead of their November convention.
And guaranteed basic income is now at the top of their list of priorities, of policies.
How did that become such a mainstream idea in Canada?
Yeah, it's kind of breathtaking how fast it's moved from a pretty fringe, you know, policy wonk idea to something that is
so clearly in the mainstream. You know, I think like a lot of things, we have COVID to thank or
blame for that, depending on how you sit here. I think people who have received, you know, the
CERB over the last few months, and I think it's helped millions of Canadians, it's probably
saved millions of Canadians in a lot of respects. As a classical guitarist, Andrew Ma is used to not having a
regular paycheck. But COVID dried up everything from his performances to teaching gigs to his
side hustles as a sound engineer. Before CERB, it was a life of terror for a while there.
I think now at this point, it's getting a little bit terrifying again.
That's opened a lot of people's eyes to the value of a program like this, because the CERB is
basically a guaranteed income in stealth. It really has all the hallmarks of a guaranteed income.
But I think it's also opened a lot of people's eyes who didn't previously understand the need
and suddenly had the need introduced to them by the
pandemic and the economic response to it, I think they have more empathy now for a program like
this. So, you know, I don't think a UBI would have been politically possible a year ago. I'm not even
sure it'll be politically possible a year from now. But right now in this moment, where we're
all sort of highly attuned to the value of this kind of direct support, maybe that's exactly the moment that a UBI needs.
And it seems that some amount of credit should go to Andrew Yang,
the former Democratic presidential candidate,
who really, I think, put this on the map for a lot of people.
It was the whole focus of his campaign.
He pledged that, you know, if he became president,
he would give every American $1,000 a month.
This is the move that we have to make, particularly as technology is now
automating away millions of American jobs. It's why Donald Trump is our president today,
that we automated away 4 million manufacturing jobs in Michigan, Ohio, and Pennsylvania,
and Wisconsin. And we're about to do the same thing to millions of retail jobs, call center jobs.
Agreed. I think Andrew Yang's candidacy and the way he sort of made it a single issue candidacy was really interesting.
And it definitely put this on the map for people who didn't already know about it.
He showed people that this was not a crazy idea, that this was not a socialist idea, that this was something a relatively conservative business person, an entrepreneur supported.
But it would also lead to two million new jobs because of all the economic activity.
and an entrepreneur support it.
But it would also lead to 2 million new jobs because of all the economic activity.
It would make our labor force much more dynamic
because right now a lot of Americans are stuck in place
and are having a hard time moving for different opportunities.
I want to ask you about some of the basic income trials
that have happened previously.
We heard from Tracy Machewski at the start of this episode
and how she felt that a basic income
had really improved her life.
How consistent was her experience with other people in the Ontario UBI pilot program?
You know, with the caveat that we don't have a ton of data from that program because the
Ford government cut it short, the data we do have seems pretty interesting. There was a professor
at McMaster who kind of gathered this data, interviewed a bunch of people who were involved in the program. And you have these really sort of overwhelmingly positive benefits in terms of people's levels of stress, their health outcomes, the number of times they went to the hospital, the amount of alcohol and tobacco they used, and even the jobs that they worked and the jobs they applied to. Professor Lucek, you did in-depth interviews.
You got to know the stories these people had.
Is there any particular one that stands out for you?
I remember one individual who basically said,
look, I was on the edge of suicide.
I just felt that nobody cared about me.
I didn't know how to make ends meet.
And I'm now looking forward to becoming a more productive citizen
and a part of this community.
It's hard to find a bad part of this pilot program, and it's sort of frustrating that
it wasn't allowed to run its course. But this is sort of one of the challenges that UBI has
always had, is that we have these pilot programs in certain places. There was a flurry of them in
the 70s, including ones in Manitoba.
We just had one wrap-up in Finland. The goal? To give unemployed people a safety net to find work or even start a business.
But the trial has ended, and now researchers say there was almost no effect on unemployment.
But the numbers are always small.
You can always dismiss the data as, well, that's just a few thousand people.
Well, I was so interested to learn that Canada's first trial, even though it sounds like one of the first trials in the world, was that the trial in Manitoba, in Dauphin, Manitoba, in the 1970s.
It was called MinCum. If a family member earned an additional income, then the MinCum payments were taxed back at a rate
of 50%. That is, for every dollar a person made working, 50 cents of the MinCum money had to be
returned to the government. What did we learn from that trial?
It depends on who you ask. That's sort of the interesting thing about these sorts of trials is that, you know, we're
not doing a drug trial.
We're not doing something that has clear scientific boundaries where you can go, well, you know,
either the vaccine worked or the vaccine didn't work.
So the MinnCum experiments, if you ask people who were supportive of it, they said, well,
it had all these really beneficial social outcomes
in terms of people being able to leave abusive relationships, in terms of people having better
health outcomes, in terms of people being able to apply for better jobs.
We're small farmers.
I think that we didn't do as much seeding.
We had less livestock, and this income was a great help to us.
Yeah, just as I was working.
If I made more money, I'd get hardly anything, but I'd stay all day at work.
I didn't stop working.
And then if you ask the people who worry that guaranteed incomes
would make people lazy, not want to work,
there was a small impact in terms of people's willingness to work,
and they point to that and go, well, see, it proves what we said all along.
This is a bad idea. It'll turn us all into sloths it was hard to get the help from
help from guys that were taking mancom and i thought it wasn't a very good idea after all
what do you mean what do you mean it was hard to get help from guys when guys were taking mancom
you asked them for some help to get on a tractor or to help you on a farm, they wouldn't go and help you because
they said they're taking income. So, you know, it really kind of depended on which side of the
issue you sat on. And as a result, it didn't give a comprehensive, conclusive result. And we're still
sort of in that space where we have a lot of good circumstantial evidence. We don't have anything
definitive or we didn't until the last few months. And that's sort of the magic of the CERB over the
last few months is that's exactly what has happened. We have basically had a trial.
I know that there was this health economist at the University of Manitoba, Evelyn L. Forge,
who found a whole trove of documents in 2008 that came from that 1970s trial.
And she concluded from that, you know, admittedly small study
that it was actually a pretty good return on investment.
And some of that is going to come back in the form of reduced upward pressure on the health care system.
This is a country that right now is spending about $60 billion a year, more than $60 billion a year on hospitals. So if you see an 8.5% reduction
in hospitalizations, that's a pretty dramatic saving. Absolutely. I mean, I think part of the
problem is that when we look at this, and this is going to be an issue if the government does decide
to implement a federal UBI right now, is we look at the headline cost.
And at the federal level, it's going to be a big number.
It's going to be a very big number.
The problem is the return comes a lot later.
And that's really kind of been one of the challenges
with people who have tried to advocate for it in the past,
is it just looks like a new cost.
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Well, I want to dig into the criticism a bit further because there is a lot of criticism.
And interestingly, it comes from across the political spectrum.
I want to start with the conservative arguments against UBI.
What are some of the main arguments that conservatives make against this kind of program?
They tend to be fairly ideological and revolve around, you know, sort of, I think we all know about the idea that, you know, you got to pull yourself up by your bootstraps.
And this is definitely counter to that.
This is the government effectively giving you some bootstraps. And you've seen it actually expressed during the current sort of COVID debate around the wage
subsidies and the CERB. Them saying, well, what's going to encourage someone to go work at a minimum
wage job? Or how are businesses going to be able to hire people if people can just choose to stay
home and get paid by the government? At this Halifax hotel, there are beds to be made,
to stay home and get paid by the government.
At this Halifax hotel, there are beds to be made,
bathrooms to be cleaned,
but most of the staff are still at home in no rush to come back to work.
They're talking about making almost as much money,
well, a few hundred dollars less
to stay at home under that program.
And so it takes a little bit of encouragement
to get them back.
But yeah, the conservative critique revolves around
the fact that this might chip away at our work ethic. Interestingly, there's also been some
support from conservative thinkers in Canada, right? Yeah, I mean, absolutely. Look, you know,
Hugh Siegel, who was a longtime conservative operative thinker, he was a senator, he's written
books about why UBI is important and a good
idea. Because I see how the present programs are operating. So when you have a program that spends
that kind of money, and we don't achieve that kind of meaningful progress of any kind, I say to
myself, as a conservative, who's concerned about how taxpayers money is spent, we can be doing this
better, more efficiently and more effectively. You know, there is absolutely a conservative case for a UBI. The argument they've made is,
and this sort of leads into the critique from the left, is a UBI is a good way to replace
government programs. So their belief is that government support programs can be
inefficiently administered. They don't reach the right people, there's just there's there's friction there, there's inefficiency and conservatives who want less government would
be very happy to replace, you know, any number of social programs with a check, right? There's
fewer bureaucrats, there's less government involvement, you're effectively empowering
people to make their own decisions. There's a lot of things there that that tick boxes that are on
the conservative score
sheet. I also saw that the Business Council of Alberta, which is an organization founded by
a number of pipeline executives, have also defended this kind of, even if a temporary,
UBI during the pandemic. And it seems like part of the argument is that you need to get hands,
money into the hands of people if you want the economy to stay afloat.
Absolutely. There is definitely a business case for UBI as well.
And the Business Council of Alberta came out fairly early supporting this, which I think definitely turned a lot of heads, certainly, out here in Calgary.
But if you're a small business, if you're a restaurant right now, if you're a retailer, and boy, you're really not doing very well, the best way to help you is to get people spending again.
And that's why you have, or at least had, I haven't checked with him recently, but you had people like Ken Bozenkul, who is a well-respected conservative thinker and staffer to many conservative politicians.
He was very supportive of a temporary UBI for exactly that reason. Okay, and I know you mentioned that there is significant opposition to UBI from the left.
Why do some people on the left think that UBI is not a good idea? Their concern, and it's a concern
that dates back, you know, 30 or 40 years now, is that a UBI will be an opportunity to get rid of
social programs. And in doing that, you end up hurting the people who need the help the most.
John Clark of the Ontario Coalition Against Poverty
does worry that the program is a move to the eventual privatization of social services.
So you're shopping for health care, you're shopping for housing,
you're shopping for public transportation, child care, all these things.
And this is the prevailing agenda at
the moment. And a basic income system takes us in that direction. So if our operating principle here
is a UBI is needed to help people who are struggling, it doesn't make much sense to then
take out programs that disproportionately benefit people who are struggling. If you're somebody who
depends on the government for educational support for your autistic child, replacing the existing government programs you
have with a check for $1,200 a month or whatever it might be, is not going to cut the mustard.
That's going to put you in a much deeper hole than you were in before. It's going to make your
life a lot more difficult. And I do think that that is something the government has to be extremely
And I do think that that is something the government has to be extremely attentive to.
This will not work if it is a program that makes the lives of those who are already struggling that much harder.
So when it comes to a possible rollout of UBI in Canada, what are you going to be watching
for?
Well, I'll be watching for the throne speech that's coming up shortly.
I think we'll see the signals there, whether the government is prepared to make this move, or if this is, you know, them testing and seeing what
the popular reaction is. But I'm not going to put the odds at 100%, because nothing is 100%
Canadian politics. But I'd say the odds of us having a universal basic income by this time
next year are higher than they've ever been in anyone's life.
Max, thank you so much for speaking with me.
Thanks for having me on.
Some news for you before we go.
About the first general election in Canada since the start of the pandemic.
Last night, the Progressive Conservative Party won a majority in New Brunswick after two years of minority government.
Premier Blaine Higgs called the snap election back in August
when there was disagreement between political parties
on whether the PC government should stay in power until the end of the pandemic
or the next fixed election date in 2022. Higgs spent much of the four-week campaign talking
about the need for stability in these unprecedented times and his government's
handling of the COVID-19 pandemic in New Brunswick. That's all for today.
Thanks for listening to FrontBurner.