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The Progressive Economics Forum

Signs of Life in Canada’s GAI Movement

It is the policy that dare not speak its name.

For the better part of the last 20 years, the idea of a guaranteed annual income (GAI), a government funded unconditional annual income floor below which no family or individual can fall, has been met with ridicule, dismissal, silence and, more often than not, legislation that does the exact opposite of what GAI activists want.

Exhibit A : early 2000, and Jean Chrétien is fresh from his third electoral victory. Intent on securing a legacy, he floats the idea that the federal government is considering a GAI. The idea however is quickly quashed by the weight of conventional opinion – a guaranteed annual income, the pundits aver, is a nice sentiment but hopelessly naïve. How will we ever convince people to work without the masters’ whip (i.e., unemployment)? Chrétien builds a war museum instead.

Exhibit B: early in the Liberals first mandate, under duress from a much overblown deficit and debt “crisis,” the Liberals float the idea of a guaranteed annual income as part of a broader effort to “reform” the social safety net (yes, all scare quotes are intentional). The discussion is stillborn, unable to wind its way through the weighty rhetoric of deficit and debt reduction. Human Resources buries the idea under questionable math. Martin cuts health and welfare transfers instead.

Exhibit C: Lanny MacDonald, err, Donald MacDonald fires a puck, err, a salvo into the policy world by making a strong case for a guaranteed annual income in his major rethink of social and economic policy. Left and right agree, for different reasons of course, that it is a silly idea. The left believes MacDonald’s proposal is too chintzy; the Conservatives think its too rich. We get free trade and deregulation instead.

But now, in the corridors of power, in the offices and backrooms north of the 417 highway (the Queensway in Ottawa-speak), the pro-GAI whisper campaign has begun anew and this time, maybe, just maybe, the unthinkable might happen. Consider:

o Senator Hugh Segal, a Martin appointee, red Tory and influential insider in the Harper government, is using his pulpit to spread the good word. He’s written a column on a GAI in the Toronto Star and makes the case wherever and whenever he can in his media appearances (see for example his recent TV Ontario appearances here and here).

o The Conservatives are talking about introducing a working income tax benefit (WITB) similar in principle to the U.S. Earned Income Tax Credit (EITC). While a WITB is fair bit removed from a “pure” GAI – the WITB is a conditional (on work) payment while most GAI proposals are unconditional – many, including Segal, see it as a step in the right direction. At the very least, it helps overcome some of the punitive work-disincentives embedded in our current welfare system and for some GAI activists, that is one of the best reasons for favouring a GAI over traditional welfare programs.

o Without much fanfare, the Conservatives introduced a kind of guaranteed annual income this past summer for struggling farmers. Under the Farm Families Options program, the federal government provides payments that bring household income up to a maximum of $25,000 for families and $15,000 for individuals with gross farm revenues of at least $50,000 (incidentally, these thresholds were based on Statistics Canada’s low-income cut-offs, thus amounting to an unofficial endorsement of the measure as a poverty line). This too is not a “pure” GAI by any stretch because (a) the program is only slated to last two years; (b) it’s not universal – only farmers are eligible; (c) its conditional – applicants are required to commit to using business planning and skills development programs in order to qualify for the program; and (d) it’s probably part of a broader strategy to shift agricultural support away from more contentious production subsidies to more direct income assistance (a subject for another talk). At the very least, however, it provides GAI proponents with some rhetorical leverage : if the federal (Conservative!) government is willing to consider a kind of GAI for farmers, a segment of society already “coddled” by protectionism, and if it isn’t too worried about creating a class of lazy GAI farmers, why wouldn’t it think of extending the policy to everyone else? Sure, a cynic might say that Conservatives are merely appealing to their western political base and a sociologist might say that this is just yet more evidence of the great mythology of the farmer (hardworking, ruggedly individual, selfless, the “deserving poor”), but the fact remains: the closet door has been opened, perhaps ever so slightly, but also, perhaps, irrevocably.

o Finally, the Senate Agriculture and Forestry Committee, currently in the midst of a major study on rural poverty, is, thanks largely to the influence of Senator Segal, actively considering a recommendation in favour of a guaranteed annual income. Their interim report, released yesterday, discusses the idea in a non-committal way but a wide spectrum of the Committee’s witnesses has expressed support for the idea. The last time any federal Committee recommended a GAI was in 1971, when the Special Senate Committee on Poverty (the Croll Committee report) drafted a detailed and comprehensive plan that helped influence an (unfortunately) ill-fated federal-provincial discussions in the 1970s.

Will these more recent efforts bear any fruit? The sceptic might say that if history is any guide, we’ll probably end up with the exact opposite of a GAI – maybe something like a free vote on an anti-GAI workfare bill or, equally discouraging, a promise to go GAI in 2050 because well, society just isn’t ready for that kind of policy and besides, the adjustment costs would be huge – can you imagine how much it would cost to provide income to feed, house and cloth a generation of painters, singers and poets all devoted to exploring their existential angst?

As for me, I’m a little more hopeful first because I think the existential quest is a worthy and necessary one , but more seriously because I am hopeful the political tide is turning ever so slowly our way: the ignominious reign of king G.W. is nearing its merciful end; Canada’s political scene federally is more vigorous than it has been in a long time (three cheers for minority governments), and people are becoming more environmentally aware and environmentalists, especially the European Greens, have long touted a GAI as a natural complement to a more environmentally-friendly society.

In short, there is reason to hope that this time, just maybe, the GAI movement can finally come out of the closet for good.

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