A position on the Ontario Basic Income pilot project.

The Ontario government has included an item in its most recent throne speech announcing a plan to conduct a “pilot” for a Basic Income. Ex senator Hugh Segal has been engaged to write an initial report about it, which is to be released in September.

A Basic Income is described by several organizations advocating for one as an income adequate to maintain a dignified existence, paid to everyone as a right and without condition. In Canada there is a lack of any effective movement advocating for a Basic Income and the concern is often expressed that many people are using the term to mean different things, often advocating policies which are in complete contradiction to the above definition.

A problem with the concept of a Basic Income is that it tends to be an elite idea. There is little or no grassroots movement advocating for it. Yet it often happens that social progress is advocated by a small group of thinkers in government or academia before a tipping point occurs and the idea becomes a mass movement.

It is a general rule that social programs never become enacted until there is a strong social movement pushing for it. This is just as true in Canada as elsewhere, although in Canada many people seem to believe in a mythology that social programs are enacted by enlightened elites. Everything from employment insurance to health care to child benefits happened in Canada because they had already been established elsewhere and a demand built up to establish them in Canada.

There is an international movement to establish a Basic Income and many successful local experiments have been carried out. But no country has yet enacted one. There is much enthusiasm for the “pilot” Basic Income of the government of Finland despite the problems with its design.

one sided conversation

It takes years to build a really effective grassroots organization to advocate for something like a BI. Development is often obstructed by people who refuse to believe any kind of structure is needed, with a funding source and a professional staff. I spent many years observing the pathetically slow development of Fair Vote Canada around the issue of voting reform. I am impressed by the relatively rapid development of the LeadNow group which is focussed on the same issue.

The problem with FVC has been that it was founded by people with an academic rather than activist orientation. This has also been the problem with the main organizations for a BI in Canada and internationally, Basic Income Canada Network and Basic Income Earth Network. These lack the capacity to articulate a clear vision of a Basic Income or to engage with government or public opinion on the concept.

What is especially concerning is the lack of understanding of the vagueness of the basic concept. It could be actualized in many ways, some of them with positive consequences for underclass people and for society in general, and some of them with very negative consequences. Many people involved with BI groups have the idea that a broad and loose discussion of a BI is going to somehow lead organically to a consensus on a BI. This shows a lack of understanding of the class based nature of this society, of the restrictions of public discourse and deliberation under a class hegemony, and of the nature of persuasion and understanding, which is disturbing in supposedly highly educated people.

However, my point is that the kind of grass roots movement which could engage government and the public voice in order to bring about a good form of Basic Income, is not there yet. The present push within some governments to test out a Basic Income seems to come from a desire to preempt demand, to either discredit the idea, delay it until interest passes, or set in stone a very limited form of BI. To repeat, there is at present no effective advocacy for BI, no “one ask”.

Manitoba winds

The BI proponents who attended the last congress in Winnipeg in May of this year need to recall what was said about pilot BI projects, especially by people who have been, and who presently are, involved in running BI experiments.

The person who ran the famous Dauphin, Manitoba experiment in the 1970s believes now the whole thing was a waste of public money due to the incompetence of people in government. There was never enough funding to do the experiment properly in the first place, and then it was abruptly terminated with no provision for analyzing or even storing the data. Without the initiative of doctor Evelyn Forget, the whole program would have been a complete waste.

Jurgen De Wispelaere is now working with the Finnish government on its design of a Basic Income pilot. He also finds the project to be under funded and poorly designed. There will not be a sufficient number of people/subjects in the study for statistical significance. He also points out that there is a difference between a pilot and an experiment. An experiment ends when it is done. A pilot in the right use of the term means a project which is intended to be open ended, to start out small, get the bugs shaken out of it, and be ramped up into a full scale and permanent program.

Karl Widerquist was especially impatient with talk of more experiments and pilots. The idea has been studied to death in dozens of experiments. What is needed is for someone to do it. An experiment is at any rate of little use. The experimental group does not exist outside of place and time, and the larger economy. The results of an experiment can be influenced by what is going on in the larger community or the economy at the time.

Further, the experiment can interact with the local economy. For example, local employers may decide to prefer participants in the experiment because they can pay them less. Landlords may prefer to rent to participants because they are surer of getting their rent.

An experiment can be designed to fail. The results can also be fudged or misinterpreted to discredit the BI. For example, in some American experiments, labor force participation decreased slightly. This was because some people stayed in school longer and some mothers stayed home with their kids. Even though primary providers worked more, the reduced hours effect was exaggerated to discredit the concept of BI.

It is generally not a good idea to try to bring out such a revolutionary program as this, with such effects on the status quo in society, by degrees or with a pilot project. As was noted at the Montreal BIEN congress in 2014, the flaws of such a program are usually not corrected, they are instead used to attack the program. You need to bring in something like this all at once, and then you can fine tune it.

no can do, Ontario

Now, I get to the specific problems with any BI project run by a province. At the start, this Ontario project is as bogus as could be because a province cannot have a Basic Income of its own. It will not have the money to do it because only the federal government has the needed tax powers.

If somehow this funding problem could be overcome, what would happen when impoverished people from other provinces start to come to Ontario looking for a better life? This is what happened with the Namibia experiment. Principles of Federalism will prevent the province from refusing them.

Now, what will happen if each province was required to create its own BI, like with the health care system or the old Canada Assistance plan? This sets up a “race to the bottom”; each province will set its BI as low as possible to avoid drawing in other province’s underclasses.

Any study of social programs in Canada shows that leaving them to the provinces to run creates just these kinds of downward tendencies. Yet some discussants of national social policies are strongly attached to the idea of provincial social programs. One must wonder what the real motive behind that is.

What does not work well in Canada are the older social programs of the 1960s through 1980s period, based on federal transfers to provinces. The social programs which work well are the more recent ones, mainly aimed at seniors and children, which come straight from the federal government. Even here, the provinces have tended to get in the way with “clawbacks” and such things. It is peculiar that anyone would want the provinces mixed up with any kind of new social program.

To sum this point up, a Basic Income is something which must be done by the federal government. If the provinces or municipalities would like to help out, let them help lobby the federal institutions to establish a BI. Or, get the housing programs going which will be needed to make a BI work.

valid concerns

So, what is the Wynne government really trying to do here? One thing which comes to mind is an effort to pressure the federal government into adopting a Basic Income policy, as they did with the Ontario pension until the Trudeau government came into office and began to expand the Canada pension scheme. The federal government has stated it will not become involved in any Basic Income plan. This is not a good way of trying to get another government to do something.

Various anti poverty groups when asked about a Basic Income relate conversations which they or their allies and associates have had with government officials. Lately, when such groups have tried to talk about poverty reduction, raising the minimum wage and similar issues, they are told to just wait, the government is going to create a Basic Income plan and that will “fix everything”. This has prompted many anti-poverty activists and groups to start speaking out strongly against a Basic Income.

The concerns of these people are justified. The biggest problem within a BI movement is that most people still do not get it that the same terms are being used to talk about different things. Many of the ideas put under the rubric of a BI would be very bad for most low and middle income people. Much like the FVC organization, the BI movement has failed to grasp the need to define what is and is not being advocated. This failing damaged FVC greatly and is now starting to bite BICN and other BI advocate groups.

The arguments being used against a BI are not “straw man” arguments. They are a arguments against ideas described as part of a BI, and which the BI movement has not clearly renounced. These ideas include; that a BI will make a minimum wage unnecessary. That a BI will allow for the elimination of most or all social programs. That a BI will allow employers to pay lower wages in order to remain “competitive”. That a BI can be used as a rent subsidy so that slumlords can get higher returns on their property.

These are legitimate concerns about the BI movement and the Wynne government’s intentions, which people who are not of a neo-liberal ideological tendency will have. This includes the overwhelming majority of the population. If the BI movement ever wants to get general public support for a BI, it must address these concerns.

This means we must think about what the Wynne government is trying to do. I have had one BI activist tell me he has heard that key people within the provincial government have had a “road to Damascus” moment and realized that the neo-liberal policies they have been pushing have never worked and are prepared to turn around. If so, why do they not move to raise corporate taxes, and stop the privatization of hydro, and the attacks on doctors?

NIT wits

It is unlikely that they intend a full BI program. They have not got the money to run programs they are obligated to provide now. Even with a “Negative Income Tax” model which Mr. Segal is apparently advocating, they would have to get federal cooperation. It would still cost them a substantial amount of money, from direct and indirect tax expenditures, unless they choose to take it from existing programs.

A Negative Income Tax has been well shown to be absolutely the wrong way to administer a Basic Income. It would be very complicated; people would have to calculate their incomes several times a year. For people with variable incomes, and there are many these days, that is a non starter.

The rigid attachment of some block heads to this idea seems to come from the fact that the Dauphin experiment was run that way. This was in the days before computers and the internet, and tax refunds were the only way to do it. Yet the people who worked on the Dauphin experiment recall that its biggest problem was the trouble people had with their income tax. Many people refused to take the income supplement because it was too much headache.

But lo, we are now in the internet age. Now we have the machinery which can deliver payments such as the child benefit or the Guaranteed Income Supplement into people’s bank accounts every month. That is how the recipients of a BI will want it and need it.

Another reason why this pre-internet age zombie idea for delivering a BI is so persistent is that it fits with the ideology of some Libertarian tag-alongs in the BI movement. That is, the tax system can be “revenue neutral”, with some redistribution from the better off to the worst off, but nothing for government with which to provide for anything else.

Some try to defend an NIT by saying it will be cheaper to run than a demogrant. Only people who “really need” the top up will get it. There is no room in this paper to refute NIT in every detail, but their idea of NIT is cheaper because it is not really a BI. It is a wage top up. It also allows government to conceal increased taxes in the slightly better off, rather than the wealthy, to pay a new form of ‘welfare’ to the poorest.

To sum up here, the province does not have the legal or fiscal means to provide a real and useful BI. That is, a demogrant delivered to everyone below a set income level, much higher than the “poverty line”. That is, enough for people to live in a dignified way. That is, a fixed and predictible amount delivered electronically every month.

cooptation?

If the province really had some wage top up idea in mind, it seems unlikely it would go through a “pilot” of several years. The flaws of their idea would become too apparent. Perhaps the pilot will be constructed to fail, thus discrediting the BI concept.

The provincial liberals have been very good at neutralizing the anti-poverty movement by stringing it along. Some participants in initiatives like “25 in 5” went totally ga-ga that the province responded to them and let them think they were having a hand in shaping a government program. Their behavior was shameful; like they assumed the right to bargain away the rights of impoverished people.

Many people who have staked out territory in the new Basic Income movement show signs of willingness to go in this direction. Especially so based on the way they have interacted with officials of some local governments, attaching to their support much more significance than it deserves. An engagement between the province and BI activists is likely to lead to a break point within the BI movement between such people, and those whose objective is more important than their ego.

When or if this break comes, it needs to be allowed to happen. The flatterers can do their thing, and the rest of us can get on with building real support without being tied into processes that can go nowhere. The experience of FVC and many other advocacy groups shows that nothing can be more destructive than the frantic efforts to hold together factions who have shown conflicting agendas and need to go their own ways.

questions, Ms. Wynne

Now I get to the sharp point of this paper; how a BI movement in Ontario needs to respond to a provincial initiative on BI. Basically, with profound skepticism. We need to keep firmly in mind that the province cannot possibly give us a BI; that has to come from the federal government.

So, Ms. Wynne, what is the point to this exercise? Is there a real intention to create a BI for Ontarians? If so, where will Ontario get the money for it? It seems likely you will try to run it as a ‘NIT” in a revenue neutral way. This sounds like an expansion of the “PST”, “renters credit”, and other refundable credits the province has been giving out in recent years. If so, it will be nice for poor people to have, but not be nearly enough to solve the problems for which a BI is needed.

What is a “pilot” needed for, Ms. Wynne? If you want to enact such a program, why don’t you just go ahead with it? What is the pilot supposed to show, anyway? What will be the criteria of a successful pilot? What will become of this pilot, and all the data collected, and the money spent on it, if after the end of three years you are no longer in government?

If you want to give poor people more money through the tax system, Ms. Wynne, you do not need a pilot for it. We wish you would just do it. But that is not really a BI. Only the federal government can give us that.

However, Ms. Wynne, we are concerned about what our friends in such groups as those demanding a rise in the minimum wage, and seeking an increase in welfare and disability benefits, are telling us about conversations they are having with provincial government officials. They are told that there is no need for them to worry anymore about raising wage or welfare or disability rates, because the province is going to bring in a Basic Income which will solve the poverty problem.

Are these people simply telling us stories? There is no way that the province has the means to eliminate poverty by itself. A BI will not make things like a minimum wage or services for the disabled unnecessary. The BI movement in Ontario stands in solidarity with labor rights and disability rights groups.

Now, Ms. Wynne, since Ontario cannot deliver a BI we question what this pilot is really about. If it is an attempt to coopt us in the way the anti-poverty movement has been coopted, most of us will not be taken in that way. If this test is set up to fail and to discredit a BI, we will expose this. If the idea is to freeze discussion about a BI until interest in it dies away, we do not think interest will fade away this time, as it has before, as the need for it is now becoming acute.

Ms. Wynne, whatever your aim is with this BI pilot, it cannot go anywhere. It will be a waste of time and a waste of public money. It is likely to be more inconvenience than help to those who become study subjects, and what happens to them when the study ends? Whatever data come out of it will not prove much.

we need this;

If you really would like to see a BI in Canada, Ms. Wynne, then work with us in applying pressure to the federal government to establish one. A real Bi program would be like this;

1) Enacted by the federal government all at once, not as a pilot or a phased in program.

2) A monthly demogrant delivered by automatic deposit to the lower two thirds of the population by income.

3) An amount adequate to insure a dignified life for everyone, not geared to the statistics Canada low income cutoff.

Any claim such a program is unaffordable is bogus. It could be covered by redirecting funds for programs made redundant by BI, plus restoration of corporate tax cuts of the past twenty which should not have been made.

Such a program will require a high minimum wage, rent controls, and a renewed housing program. All health care programs must remain and be enhanced. Provincial social welfare, no longer needed to deal with mass poverty, can be redirected toward hard core needs.

To conclude, if this “pilot project” does nothing but cause the scattered BI groups in Ontario to coalesce into an effective advocacy organization, and clarify their goals, it will have been of some use.