Calgary Herald Opinion: Alberta Could Afford a Basic Income that Reduces Poverty - But the Devil is in the Details

14 May 2019

Read the online article from The Calgary Herald

Alberta is a prosperous province, but our poverty rate has hovered around 10 per cent for decades, costing the government over $2 billion each year. Add to this context the looming spectre of automation and growing uncertainty about our economic future and it’s easy to understand why the idea of basic income is resurfacing in public discourse.

Though lack of income is only one dimension of poverty — a reality that necessitates a comprehensive system of social services, supports and community-based programs — there is Canadian evidence that shows that income transfers are an effective poverty reduction tool.

In recent years, the guaranteed income supplement for seniors and Canada and Alberta child benefits have been credited with reducing poverty rates. Some have gone as far as to call these programs a basic income for seniors and children.

For many in the social services sector, a similar program for adults aged 18-65 is a logical next step. We believe that a regular, predictable income, unconditionally available to all who need it and sufficient to provide for a decent lifestyle, has the potential to significantly improve social, health and economic outcomes. A basic income can also recognize the contributions to society of unpaid caregiving and volunteer work.

Despite this, basic income critics point to the prohibitive costs associated with implementing such a program, noting that governments just don’t have the money. However, new research from the University of Calgary’s School of Public Policy shows that Alberta could actually afford to do it. Supported by a research partnership with Calgary’s Social Policy Collaborative, economists Wayne Simpson and Harvey Stevens have come up with an Alberta basic income program that wouldn’t require the province to spend any extra money or increase taxes.

Unlike the Ontario basic income pilot, which was scrapped last summer after a change of government, the Simpson and Stevens program is financed entirely through modest changes to tax policy. By turning five existing non-refundable tax credits into a single refundable credit, the authors suggest that the province could achieve a basic income that would increase the incomes of roughly 40 per cent of Albertans, reduce poverty by almost one-quarter and eliminate poverty for single parents.

But, as always, the devil is in the details.

A notable element of the proposal is the decision to keep in place the current income support system — a choice that some basic income advocates may not support. Many envision a basic income as a better — and simpler — alternative to existing income supports, which are complex and often needlessly bureaucratic.

Also concerning is the redistributive impact of the tax reform required to create the program, which would result in increased tax pressures for middle-income earners.

These shortcomings aside, the Simpson and Stevens proposal is proof that basic income is more than a pipe dream in Alberta. And though the proposal wouldn’t eliminate poverty completely — it would leave many non-elderly single Albertans below the poverty line — it would be a significant step forward in our efforts to make poverty a thing of the past. As the basic income conversation evolves, both in Alberta and across the country, the School of Public Policy report has contributed valuable insight. We’re excited to see where the discussion goes.

Franco Savoia and Jeff Loomis are the executive directors of Vibrant Communities Calgary and Momentum, respectively. Together, they co-chair the Social Policy Collaborative, a group of community organizations and funders committed to working together to inform the development and implementation of public policy that improves the economic and social well-being of all Albertans. Through a funding partnership, 11 organizations from the Collaborative provided financial support to The School of Public Policy to research the feasibility of a basic income in Alberta. The Social Policy Collaborative is also a stakeholder of Enough for All, Calgary’s community-owned poverty reduction strategy.