Re: “Financial relief supports case for introducing a basic income,” Gwynne Dyer, Opinion, April 10.
The federal government is spending billions of dollars to deal with the chaotic, traumatic health and economic consequences of the COVID-19 pandemic.
It is planning a patchwork of short-term, administratively costly relief measures that will enable most people to get through the crisis, but they will not prevent a recession; full recovery will take many months.
If a universal guaranteed annual income were in place today, the economic, social and psychological impact of this pandemic would not be nearly as drastic, and the need for extreme emergency economic measures would be significantly reduced.
Since such a federal socio-economic system does not exist, when the crisis is past and the economy returns to “normal,” we will still have various levels of unemployment across the country, about 12 per cent of the population (4.5 million) will still live below the poverty line, homelessness and the consequences of homelessness will persist, food banks will still be in business, and the cost of secondary education will still be a challenge for thousands of students.
Returning to “normal” is not good enough. We can do better, much better.
Now is the time to start planning for the implementation of a universal guaranteed annual income. If every adult received a monthly cheque for $2,000, roughly a living wage in most places, and families received a $1,000 allowance per child, it would cost the federal government about $80 billion. (There are about 30 million adults and seven million children aged zero to 19 in Canada.)
Can we afford $80 billion to establish relative income equality in this fair land? The answer is an unqualified yes.
Yes, because most of the $80 billion would be returned to the federal coffers through the tax system, since the income of the majority of Canadians is more than the living wage.
(The median income of individuals in Alberta is $36,500. The average median income of Canadian families is $89,773.)
In addition, claims on EI would be reduced, subsidies for homeless programs would be reduced, food banks would disappear, welfare payments would be unnecessary (to the delight of provincial governments) and administrative costs would decrease.
The remainder of the $80-billion bill should be paid for by closing tax loopholes that favour the rich and by instituting a very modest wealth tax.
According to a friend’s 2019 calculations, a tax of 0.25 per cent of a net worth of over $5 million, 0.5 per cent of over $10 million, one per cent of over $25 million, two per cent of over $50 million, and three per cent of over $1 billion would result in about $37 billion in additional revenue.
Although perhaps in a post-COVID-19 economy, the revenue generated by such a wealth tax would only be about $35 billion, this sum would still be about 44 per cent of the $80-billion price tag for funding a guaranteed annual income for every Canadian.
The improvement in relative income equality resulting from a guaranteed annual income would be felt in every aspect of our corporate life.
In 2010, Richard Wilkinson and Kate Pickett published The Spirit Level: Why Equality Is Better for Everyone. The research and analysis contained in this book (there are 456 references to the work of researchers in a wide range of disciplines) demonstrate conclusively that the entire populations of countries that have relative income equality are physically and mentally healthier, live longer, have fewer infant deaths, are less violent, have fewer homicides, have lower rates of imprisonment, have fewer teenage births, have lower rates of obesity, are better educated, have greater social mobility, have higher levels of trust in each other, and have greater social harmony.
Canada usually fares better than countries such as the United States, Australia and the United Kingdom, but not nearly as well as countries such as Japan, Finland, Norway, Sweden, Denmark and the Netherlands.
At this time of social and economic upheaval — for the overall health and general well-being of all Canadians — Prime Minister Justin Trudeau, Finance Minister Bill Morneau and the Liberal caucus should get serious about establishing a guaranteed annual income.
I am sure that the NDP, the Greens, and perhaps the Bloc Quebecois and some Conservative MPs would support the legislation necessary to make this way of generating relative income equality a reality.
Dale Watson is a retired United Church of Canada minister. He has been a resident of Alberta since 1974.