Canada's Income Security System and Basic Income Overview
Exploring Canada's income security system, this presentation delves into the current programs, proportionality in distribution, poverty statistics, and the concept of basic income. It highlights the estimated income transfers across different target groups and programs, emphasizing the need for additional financial support to address poverty effectively.
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A Basic Income & Canada s Income Security System John Stapleton Open Policy November 23, 2016 Hamilton, Ontario
Order of Presentation 1. Canada s income security system: - Programs and Proportionality 2. Who is living in poverty? A closer look 3. A basic income: some numbers and concepts 4. Worrying about work .. 5. Some thoughts from the income security data Basic income & Canada's income security system 2
1. Canadas Income Security System PROGRAMS AND PROPORTIONALITY Basic income & Canada's income security system 3
Canadas Income Security System Now pays out $170 billion ($153 billion in 2013) 8.5% of GDP ($2.0 trillion economy) $30 billion extra (conservatively needed to take all Canadians out of poverty. $170 + $30 = $200 billion 10% of GDP 1.5 percentage points additional Basic income & Canada's income security system 4
Canadas Income Security System Canada s Income Security System - Proportionality Target Group Percent of Population 16.5% Share of Income Security System 52% Difference Aged +35.5% Children 19.3% 9% -10.3% Working age adults 64.2% 38% -26.2% Basic income & Canada's income security system 5
6 Basic income & Canada's income security system CANADA: Estimated Income Transfers by Target Group 2013 ($153 Billion) Other (local, residual CPP/QPP) 7% GST Credit 3% SA includes benefits paid to persons with disabilities Social Assistance 10% SENIORS (OAS, C/QPP Retirement, WWI & WWII 52% EI & Quebec Parental Insurance 11% DISABLED (WComp, C/QPP-D, Vets) 8% CHILDREN (CCTB, UCCB, Q/CPP Children, CSA) 9%
7 Basic income & Canada's income security system CANADA: Estimated Income Transfers by Program 2013 ($153 Billion) VETERANS (WW I, WW II, VETS ALLOW) 2% GST CREDIT 3% UCCB 2% LOCAL 3% SOCIAL ASSISTANCE 10% CCTB 7% WORKERS COMPENSATION 3% OAS 28% CPP/QPP 31% EI & QUEBEC PARENTAL INSURANCE 11%
Canada: Estimated Income Security Program Spending by Program Philosophy 2013 ($153 B) Service to Country 26% Contributory 46% Income-tested 28% Sources: CANSIM table 380-0080 Open Policy Basic income & Canada's income security system 8
2. Who is living in poverty? A CLOSER LOOK Basic income & Canada's income security system 9
Who is living in poverty? 12.7% of Canadians 1.7% of all Canadians are seniors living in poverty (about 10% of all seniors 13.3% of poor) 5.1% of all Canadians are recipients of social assistance about 40% of the poor 6.0 % of Canadians are non-elderly, working age, mostly working poor 47% of poor Basic income & Canada's income security system 10
CANADA'S POPULATION: PERSONS LIVING IN POVERTY PERCENTAGE WHO ARE NON-ELDERLY, SENIORS AND ON SA 2014 (Based on after-tax LIM) 5.1% 6.0% 1.7% 87.3% Not living in poverty Seniors living in poverty Non-elderly persons living in poverty, not on SA Persons living in poverty, on SA Basic income & Canada's income security system 11
SOCIAL ASSISTANCE RECIPIENTS AND SENIORS AS A PERCENTAGE OF THOSE LIVING IN POVERY IN CANADA, 2014 (Based on after-tax LIM) Seniors living in poverty 13.3% Persons living in poverty, on SA 39.8% Non-elderly persons living in poverty, not on SA 46.9% Basic income & Canada's income security system 12
SA CASES BY CHARACTERISTICS CANADA, MARCH 2015 Non-Disabled, Other 4% Non-Disabled Single Parents 12% Disability Cases 53% Non-Disabled Singles 31% Basic income & Canada's income security system 13
3. A Basic Income SOME NUMBERS AND CONCEPTS Basic income & Canada's income security system 14
Numbers and Concepts No agreement on GAI or Basic Income terminology they mean different things to different people .but GAI tends to mean blowing up the existing system and replacing it with a negative income tax or some big benefit of some description Basic Income tends to mean leaving most of the system intact but replacing/augmenting welfare and bringing everyone to the poverty line with no conditionality Basic income & Canada's income security system 15
Numbers and Concepts Something to think about One could argue that seniors and children have a basic income guarantee now: OAS and GIS, GAINS and Trillium credits A single gets $18,000 a year with no other income Children get about $6,000 a child (averaged out) with the new federal child benefit program Question? Do we just need a new program and more money for working age adults? Basic income & Canada's income security system 16
Numbers and Concepts More to think about .. Program Administration now costs about $8 billion Profound cuts and rationalization could get it to $4 billion cut 40,000 staff Minimum cost of GAI or Basic income is $25Billion to $30 billion Administration savings can t pay for it! Basic income & Canada's income security system 17
Numbers and Concepts Implement a Negative Income Tax Blow up everything else Pay everyone a set amount and tax back from 6 in 7 Canadians who are not poor using existing tax system The cost soars to (up to ) $500 billion 25% of GDP Bankrupts Canada instantly A solution in search of a problem? Basic income & Canada's income security system 18
Numbers and Concepts Apologies to the Bare Naked Ladies: If I had 30 billion dollars .. I d buy you . A real national child care program A real solution to climate change An end to gridlock and infrastructure decay Many Canadians have their own ideas as to their priorities for a spare $30 billion They would not start with a GAI or basic income !!! Basic income & Canada's income security system 19
Numbers and Concepts What $30 billion means: $1,739 for every man woman and child in Canada to pay up $3,478 for the richest 50% of Canadians if we did not want the bottom half to pay It s not chump change! Basic income & Canada's income security system 20
Numbers and Concepts Must also consider First Nations Not just income poverty Also what we could call living standard poverty where heat, light, water, housing, education are substandard Would raising everyone to the poverty line or above solve living standard problems? Basic income & Canada's income security system 21
Part 4 WORRYING ABOUT WORK .. Basic income & Canada's income security system 22
Fraser Institute Although the practical implementation challenges make a GAI reform implausible in Canada, evidence from five North American experiments with a negative income tax style GAI provides some valuable insights. A negative income tax discourages recipients from working because it subsidizes leisure and reduces the marginal benefit of working. The results from the experiments generally point to a reduction in hours worked by recipients, reinforcing the concern about work disincentives. Basic income & Canada's income security system 23
Worrying about work.. Give people money and they won t work? Lazy millionaires? Lazy poor people? People who want to be poor/homeless The counter: - rich people who work? Why would they? - 2.6 million in working poor families? - working seniors in Walmarts and Tim s ? Basic income & Canada's income security system 24
Worrying about work. Many people believe on balance that motivation comes through deprivation; or Motivation ought to come through deprivation . But it seems that almost everyone wants to work a tonic for the soul heals illness and provides self-esteem Non-work is painful not leisure! Basic income & Canada's income security system 25
Some Thoughts from the Data 1. Our income security system is out of whack with who is poor 2. It works best for people who are not poor 3. It fails people who are poor 4. The system could easily afford to provide a basic income if there is the national will to do it. 5. Seniors are doing best but we need to Grow the pie for all to reduce and eliminate poverty. Basic income & Canada's income security system 26
