Hugh Segal is Resident Fellow at The School of Policy Studies at Queen's University in Kingston, Ontario, an associate with the investment firm of Gluskin Sheff and Associates, and a former Principal Secretary to the Premier of Ontario and the Prime Minister of Canada.
It was at a Conservative policy conference at Niagara Falls in 1969 where, based on a paper from the research office, Robert Stanfield and his Party first reflected on the benefits of a more efficient and humane income security system implied by a guaranteed annual income. The paper envisaged an eventual end to rules-based, overlapping income security programs at the federal and provincial level in favour of a negative, income-tax-based universal income floor, above the poverty line, available to all Canadians in need.
I was 19 at the time. The paper offered practical and humanitarian reasons for the collective and individual benefits of this more holistic approach to equality of opportunity that appealed to me then, and have stayed with me in every political assignment I have accepted since. A decade after the conference, I served as Principal Secretary and then Associate Cabinet Secretary at Queen's Park, when the Davis government brought in the Guaranteed Annual Income Supplement (GAI) for seniors: a holistic response to a compelling and measurable problem of indigent seniors, largely female, facing an unacceptable prospect of prolonged poverty.
While the GAI was more generous than Ottawa's laudable but meagre Guaranteed Income Supplement, introduced in the 1960s, it was flawed in many ways. It was one initiative in one province, limited to one age segment. It topped up existing programs for which meaningful long-term guarantees were, as we have since learned thanks to federal cutbacks and transfer "re-profiling," largely illusionary.
In that regard, it simply mirrored what has been wrong with income security policy in Canada for some time--namely its failure to design a framework that responds to income collapse without regard to age, occupation, location, employment or disability--and does so non-judgmentally and without excessive bureaucracy.
A spider's web of existing programs
It is hard to fault the motivation of those academics, civil servants and politicians who crafted separate rationales, policy frameworks and operative regulations for different programs designed to address income needs resulting from different circumstances and for different reasons. But in the end, whether one injures one's back at a job site or has the local steel mill or cod fishery shut down, the issue is income. The disruption to family security, the threat to a marriage's stability, the collapse in local buying power all occur because income is gone.
Whatever the reason for the collapse in income, the local cost of living respectably above the poverty line does not change by virtue of one's being eligible for program A or ineligible for program B. Letting the condition of people's lives filter its way through regulation-driven programs until it lands in the welfare catch-all--itself highly regulated and hypothecated on provincial and municipal particularities--is no response to the core question of individual dignity and self-respect. When companies and governments buy out senior employees, the main item in the severance package is always income. The case for the status quo in government assistance might be sustainable if it could be argued that the present spider's web of programs (sticky enough to entrap but not strong enough to support) had produced real progress; less poverty overall, higher levels of return to the labour market, greater independence and increased consumer confidence. Sadly, there is no such overall progress to report.
Incomes collapse for a host of reasons, illness, infirmity, a pause to re-educate or build skills, age, youth, local and massive job evaporation. It is possible, if not simple, to establish what bringing collapsed incomes above the poverty line in different Canadian communities entails.
The principle that every citizen should have the right to bridging support at liveable levels when there is income collapse balances the principle that the state has the right to deduct tax at source from the income an individual earns. It would be the ultimate socialist excess to suggest that the state has an "a priori" right to take money from the citizen with income for its general purposes (such as hiring public servants, servicing debt or financing taxdeferral programs for industry) but has no concurrent responsibility to respond to the citizen's income collapse.
Those who argue that any such income insurance program would break the bank should first reflect on what we are now spending, in some cases quite wastefully. The MacDonald Royal Commission on Canada's economic union and development prospects (yes, the same one that called for a leap of faith to free trade) reviewed income security spending a decade ago (Vol. II, p. 771). Highlights included unemployment insurance at $11.6 billion, old age security at $11.4 billion, pension-related tax exemptions and deductions at $7.6 billion, social assistance at $6.6 billion, family allowance at $2.4 billion, child tax exemptions at $1.4 billion, a child tax credit of $1.1 billion and married exemptions at $2 billion.
If you include the basic exemption--which is supposed to reflect the progressive nature of our tax system--one could add another $14 billion. This still leaves native programs, veterans' pensions and training allowances. In fact, when combined with provincial expenditures, and excluding the personal basic tax exemption, the total reached $61 billion--and that was a decade ago. In 1990, total expenditures, excluding the personal basic exemption and the married exemption, totalled some $67.1 billion. (1) So this is hardly a question of new wasteful spending. There is a large, well-intentioned spending machine now operating under a huge set of different rule books and eligibility criteria.
Although the idea of a...