It’s the late 1960s. His name is Robert Theobald. He’s an economist with degrees from Cambridge and Harvard. He’s smart—very smart. And he has a great idea: The Basic Income Guarantee.
Sound familiar?
Theobald was proposing a guaranteed annual income. And it almost caught on with The Johnson Administration, and the President’s vision for a Great Society in the United States. The idea didn’t fail in the late 1960s, as much as “the timing wasn’t right.”
Don Hill met and worked alongside Robert Theobald for a time. It was the mid-1980s. The National Energy Program induced by Trudeau (the elder) took a wrecking ball through Alberta’s oil patch. And in the wake of the so-called creative destruction, Albertans were primed to revisit ideas that had been closeted and not spoken of in a generation. Don figured Theobald’s economic visions (plural, yes), could be remade into a public radio & television series that could inspire as much as prescribe an economic future.
Don & Robert couldn’t get out of ‘development hell’ (a peculiar attribute of the media business then, as it is now), and sadly, the series was never made. Yet something came of all the development : the Australian public broadcaster (think CBC without the ‘social engineering’) broadcast a series of talks with Robert Theobald before his untimely passing in 1999.
Time for a Guaranteed Annual Income in Alberta?
One more thing before cutting to the chase.
Uncle Joe Biden & Cousin Justin have an economic plan. We are not in it.
Alberta’s heartland & working class are now openly held in contempt. Albertans are pariah in our own country. We are typically described as backward, knuckle-dragging, planet killers. It doesn’t matter that it’s not true. It’s the story people who don’t live here tell each other. And it’s a story our best & brightest can’t shake. Hell, they can’t even buy a job now. They are stuck here (if they haven’t already decamped).
This is not a welfare moment. We don’t do welfare here. We do tips & tools to help families earn their keep — a guaranteed annual income could be the ticket to a better future in our province. It will encourage innovation — taking risks you otherwise can’t afford to take — by cushioning the crush of just keeping the lights on.
Here’s how it can work: The province is not (quite) bankrupt. There is $17 billion in our Heritage Savings Trust Fund and we can pull the lever on a provincial sales tax, anytime.
The idea of a guaranteed basic income isn’t partisan. Conservative Senator Hugh Segal pitched the concept years ago and at the onset of the COVID pandemic, another conservative, Ken Boessenkool, recommended a Crisis Basic Income. About the same time, American Democrats proposed the CARES Act—the Emergency Money for the People Act—to shell out $2,000 per month to Americans impacted by the pandemic (guaranteed for at least six months), and now President Joe Biden has included more relief money in his coronavirus response plan.
Albertans we’ve spoken to like this idea.
Why?
- It’s simple: The dollars go directly to people without strings attached.
- It responds to the urgency of the present need.
- It’s not judgmental. Individuals decide how to spend the money.
Albertans (inclusive of the current crop in provincial government) could work with the feds and continue to target precise needs—via extended unemployment benefits, tailored small business loans, more Canada Emergency Wage Subsidies—but gaping holes remain. (And we’ve all heard the stories; golf courses squirrelling away stimulus dollars in their surpluses; political parties taking the money; companies paying dividends to shareholders.)
The idea of a guaranteed basic income is not a new idea but it just may be the right time for it. And there are other prior notions from the kitchen table that require a serious rethink.
The probability that our current provincial government will be unelected in the next election cycle is running better than 50 per cent. And it’s been said (by Don, a lot) the next party to take office in the Legislature has yet to reveal its name. What hasn’t been said is speculation—serious talk—that should Rachel Notley’s New Democrats rebrand the party (let’s face it they’re no longer ‘new’ or in step with the federal party) a lot of former ‘progressive’ conservatives might finally have a political home to feel comfortable in here. And if that sounds a lot like the Lougheed years, well… yes. And that’s fine by us.
Stay tuned—we’ll post other not-so-crazy-anymore ideas whose time has come.
This column is the consensus opinion of the writers Donna Kennedy-Glans & Don Hill. If you haven’t already, please subscribe to BEYOND POLARITY scroll down on your phone or tablet, or look to the right in the panel beside this post. Enter your email to FOLLOW, a wheel spins, hamsters get fed.
Well, Donna, I do think this column is likely to get a reaction!
I agree, the guaranteed annual income (“GAI”) was of the sixties (probably prior to that also but I don’t know with certainty) and, yes, ideas do come around again and again. Having said that, it is always useful to determine why an idea did not find popularity previously, i.e. was it a bad idea, not practical given various technological issues, superceded by a “better” idea, etc.
I understand the apparent attraction of a GAI but I am cautious about championing it.
I understand and agree that Alberta and Albertans are held in contempt elsewhere, particularly in central Canada and on the left coast (thank you, Alan Fotheringham). To those who are contemptuous of us, – emphatically and entirely correctly – I say, “to hell with you.” It is that utter contempt being radiated from central Canada and the left coast that is causing me to listen to the separatists. That is, in my opinion, not a likely solution but, dammit, I am now listening.
You mention the idea of using the Heritage Fund and having a sales tax. I have two points:
First, the Heritage Fund is supposed to be a “rainy day” fund. I argue that it isn’t simply raining but it is snowing, sleeting, freezing and blizzarding right now so tapping the fund should be considered – subject to my below qualifier.
Second, you mention that a provincial sales tax could be levied. That will certainly be opposed by many and I do understand any resulting angst on that point. I respond that I have seen the snow, the sleet, etc. and it may – subject to below qualifier – now be necessary.
Okay, the qualifier. The UCP have, they tell us, started a review of spending. I expect that that has been superceded by the COVID events. However, the UCP has always (as I recall, anyway) responded to calls for levying a sales tax and other such revenue “enhancements” by saying that they need to get spending under control first. I do agree: if your spending is “out of control” you will simply waste that additional revenue to pay the “out of control” spending rather than dealing with the very much needed additional programs.
I say that before levying a sales tax or emptying the Heritage Fund, make sure that we cut costs wherever possible. I think that we absolutely need to cut the salaries of high-flying (and high travelling?) politicians who are living very well when Albertans are suffering. Okay enough soap box stuff.
As for the GAI, I have to ask, where will the money come from? We are already broke to the tune of tens of billions of dollars. Perhaps we could simply demand that Ottawa refund the 20 or so billion that it steals from us each year. Not a likely way to come up with money.
You point to non-partisan proponents of a GAI, such as Hugh Segal, the reddest of red Tories, and Ken Boessenkool and the US Democrats. Well, of those three examples, I would say that I will listen to Ken Boessenkool before Hugh Segal and the US Democratic party; especially before I listen to the latter.
You quote Don as saying that “the next provincial party to take office has yet to reveal its name.” I would not at all be surprised if that was a new party rather than a gussied up existing party.
In summary: Mackenzie King: GAI if necessary but not necessarily GAI; enhanced revenue measures if necessary but not necessarily enhanced revenue measures.
Put differently, I am willing to listen and willing to talk but I still need to be convinced.
There are a number of issues with any form of GAI. What do you use to calculate it? The cost of living in Calgary is quite different than the cost in Three Hills. An income that is subsistence in Calgary will let you buy a house in Three Hills.
I disagree that it is sleeting and snowing. This is a drizzle. When our oil income is completely gone, then it will indeed be a rainy day. We have chosen to spoil ourselves rotten. We have been like a person that buys a prosperous farm, then sells the topsoil as a quick and easy way to earn money. Then he wonders why the crops aren’t as good anymore.
We have used a non-renewable asset (oil) to cover our day to day expenses. No business person would ever do that with their own assets. Instead, you use a non-renewable asset to provide the funds to get a renewable asset that will generate permanent long term revenue.
Over 65%of current fossil fuel consumption use for ICE vehicles. There are massive issues in moving to electric vehicles, but they are being overcome. We might have 40 or 50 years of oil revenues, then it will drop to a trickle. It we do not balance our books outside of oil and gas revenues, Alberta will be the next Detroit.
And there is only so far we can cut. Ralph cut royalties, and started an immigration rush and an exploration explosion. The result was that the oil and gas companies started wage wars and pushed all wages up to about 20% above national averages. If Kenney and crew think that doctors, nurses, and teachers are going to stay in Alberta when he costs them their houses (because everyone buys properties based on their income levels) and that they will live as lower class citizens while others see their higher incomes slowly disappear through inflation, he will learn the same lesson Ralph did. Labour is portable. I remember not being able to get a family doctor for over 10 years.
Notley moved things way too far to the left, and Kenney is going way too far to the right. We need to find a rational balance.
the CCPA Monitor had a whole issue on GAI 1-2 years ago. The money went to everyone in the test areas, mostly in a town in Manitoba. Results showed two groups of people who did not use it to prop up business and the ‘economy’. 1. young men returning to higher education 2. women with pre-schoolers in their care. Seems to me they used it very well. Everyone added the GAI to their annual income tax, and it really didn’t make a big dint in tax revenue overall. Now if we had affordable child care, women would then be able to participate in reaching dreams beyond traditional female work.
I totally agree that GAI is worth pursuing. It’s part of what I want post-pandemic.
Sharon: I read your comments above and found them interesting. I recall hearing of the experiment and I additionally recall wondering why, if the program was “so successful” [as it was portrayed] the governments did not pursue it.
Okay, one other thing that I should point out. Since my comments of a day or so ago, I was trying to find details of an article on the GAI that I had read a year or two (vague term, I know) ago on the topic. I did find it at the link to the article in the National Post – please, no ideology here; the author talks about how one must decide among the issues – is https://nationalpost.com/opinion/stephen-gordon-you-know-theres-a-reason-no-ones-put-in-a-guaranteed-annual-income-yet
I highly recommend the article as it talks about three objectives that are deemed to be essential in any GAI program and the idea that one can reasonably easily get to any two of the objectives but then adding the whichever objective that is left over makes matters very difficult. Again, I highly recommend the article.
Ken, I read the article you provide, and the big (third) issue seems to be the mechanics of distribution and the cost of $800 billion yearly. So we definitely would need to close tax loopholes so that the wealthy would pay their fair share. We also need a national day care plan, which pays for itself eventually as it provides better education for young children, increases readiness for formal schooling, and allows more women into the workforce. These problems/issues are solvable. It is past time that our tax loopholes were closed and a fairer tax system was in place.
Gender equality is not possible without income equality. The opportunity for all to work productively in Canadian society should be available to all citizens. A GAI is a big part of enabling equality.
Sharon, thank you for your response.
I think that that article is a good starting point for understanding the issues; they are complex.
Now, as for closing tax loopholes, I was an accountant for a million years before I retired so I had some experience with wealthy folks and with the tax system; most of my clients, however, were just ordinary people. I can say that most of the wealthy I dealt with simply wanted to get the best legal (I absolutely stress the work “legal”) arrangement that they could but they absolutely did not want to do anything that would cause CRA to look at them. In other words, they paid their taxes honestly and on time and acted conservatively (small c, you know) with the rules.
Now, the super wealthy were not a group that I dealt with. I had occasion to meet some but I cannot comment on their situation.
What I can tell you with absolute certainty is that the tax system is too complicated. Absolutely. That means that people can game the system to their advantage. I cannot make any comment about people who break the law, such as hiding wealth offshore but, as near as I can tell, there are some folks like that but how many or how much I don’t know.
What I can say with absolute certainty is that the real problem with the wealthy is that there are not enough of them. Why do I say that? Well, they pay far, far, far more than their proportional share (i.e. as compared to their share of the population) of taxation in this country.
So, if you want to close loopholes – and I agree that that is (at least notionally) a good idea – you have to look at the low hanging fruit. Eliminate the exemption for capital gains on sale of principal residences; eliminate the exemption for contribution to retirement income such as to pension plans, RRSP’s, etc.;eliminate the personal tax credit amounts (what we used to call personal exemptions); eliminate the capital gains exemption.
The problem is that there really are terrifically good policy reasons for all of those things so, again, it is complicated. Additionally, taking each of those measures would inevitably have foreseen and unforeseen consequences. Of course, you have to chase the folks who have offshore monies and trust funds, etc., etc. (do you really expect the current government to do such a thing when the principals are themselves beneficiaries?). Of course, you have to chase the crooks and cheaters, the ones who really are breaking existing law. And so forth.
If you think about what I just listed you see that those exemptions and tax credits really would generate large amounts of taxes, but would the populace accept them? I don’t know. What I can say is that it is complicated. Ultimately, the question is – as always – whose ox gets gored? Your ox is fair game but my ox is sacred, and so on. To achieve the things that you list (all of which are – on the surface, at least – highly desirable) you have to get into the details and decide exactly whose ox you want to see on the slaughterhouse floor.
A GAI can certainly work towards equality; indeed, that is the basic idea of it. Having said that, I say again: details, please, details. And, inevitably, most proponents (please understand, I mean no disrespect) simply use slogans about the rich paying their fair share, etc. I say, again, the problem with the rich is that there are too few of them. [And, oh, yes, this federal government is sure accelerating the rules to make sure that very few people join the ranks of the rich. Personal comment, that.]
You have given me lots to think about. I’ll research some more.
If Alberta adopts a Universal Basic Income then it is no longer Alberta to me. If a majority of the people have the will to institute a UBI then they should have the will to organize their communities and give charity. The sooner Albertans realize/remember that government is not the answer to our problems, the better we will all be. Do you understand the implications of a unilateral provincial UBI? It wouldn’t be Alberta; it would be Downtown Vancouver, Alberta. The question of the day would be “what can the government do to solve the problems it created yesterday?” If the government is to do anything about wealth disparity, it should introduce solid programs for people to manage their money more responsibly… I know I would sign up in a heartbeat.
Justin, I have great sympathy to your thoughts in this matter.
As near as I can tell, all GBI models that are proposed try to work with three goals: a) moderate cost, b) “sufficient” if not generous payments, and c) a low rate at which the benefits are clawed back.
If your GBI wants to pay everyone then the costs are absolutely, but absolutely, immense. If you do pay everyone then it follows that to do so, the payments would very likely not be “sufficient” – whatever that might mean. And if you do pay everyone then the payments would have to be clawed back from the “bank president” and similar folk.
So, it seems to me that it becomes a project that sees a wall erected that says, “Everyone with less than $XXX of annual net income receives $X per month.” Then, what happens when you are suddenly unemployed or “underemployed” and your income falls precipitously? Well, under one model, just wait until year end and file your tax return and money starts to flow. Under another model, there is a bureaucracy that you can appeal to to get your GBI started. And then it will continue, even if you become re-employed, so that you have people having to repay large sums that they don’t have. Not pretty.
The foregoing is simply a real, real rough argument against many of the models. I haven’t even started with the basic idea that perhaps, when we are our brother’s keeper, we should help him get a job, not give him a living so he doesn’t need a job.
I recognize that a charitable impulse is not always natural to everyone. I argue that it should be. Really, I do not believe that government should take responsibility for that which we, as citizens, can do better.
I am a retired accountant; why is that pertinent you ask? Well, I do recall that when I had to work on tax returns of folks who came from the US, as a group, they were typically far more charitable than most Canadians. There can be many reasons for that but I argue that we have typically simply allowed the government to take responsibility instead of doing things ourselves and I do think we should do more ourselves rather than depend on government.
And, yes, I also want to avoid becoming Downtown Vancouver, Alberta.
I prefer a federal program to a provincial one. I have lived elsewhere in Canada, and I wish Alberta was less provincial and more willing to be part of this country. More debate please!
Sharon, I will add one further comment.
I absolutely do not wish a federal program as I feel that the federal government is terrifically hostile to Alberta and Albertans. The federal government does, however, try to meet the objectives, hopes and desires of downtown Toronto, Montreal and Vancouver. As it happens, I do not live in any of those three centers and have no desire to so do.
Sharon, I respectfully disagree with you – emphatically!
About forty years ago (I am a fossil) for a period of time I lived in Ontario. Ultimately, I did return and I have been glad of that return ever since. I was an Albertan before I left for the period I worked in Ontario; I was an Albertan (in exile) when I lived in Ontario; and, I am an Albertan now.
I found that Ontario – and much of the rest of Canada (ROC in the parlance) – simply viewed Alberta as a redneck place with antediluvian opinions and backward people. Since my (blessed) return home to Alberta, my observation of the national scene has shown that a) Alberta remains – at best – a back of mind place for most Canadian; and, b) many, many, many Canadians are actually hostile to Alberta and wish us and our industries malice.
The result is that I am firstly an Albertan and secondly (by far) a Canadian, and that second is simply a matter of birth; Canada has taken every opportunity to tell me that I and my peers in Alberta don’t matter and are to be dismissed. For many, many years I told everyone that if you don’t vote you can’t complain. For the next federal election I will not vote as I have come to realize that my vote, my opinion doesn’t matter to the national parties. It is simply a matter that the votes are in Ontario and Quebec and all their policies are oriented that way and are typically hostile to Alberta. At best, those policies are indifferent to us – at best!
So, you want a federal program. That is your choice, but I want a provincial program. In fact, if there is to be a program, I absolutely insist that we be like Quebec and demand – I say, DEMAND – that our rights be respected and the monies be turned over to us unconditionally so that we can administer OUR program as we see fit.
I would point out that Quebec and Canada administer the QPP and CPP, respectively, and while there is no portability of each plan, there is a system to allow employees to move back and forth. I simply argue, same – same.
I should have clarified this in my last post.
The Charter of Rights and Freedoms states:
6. (1) Every citizen of Canada has the right to enter, remain in and leave Canada.
(2) Every citizen of Canada and every person who has the status of a permanent resident of Canada has the right:
to move to and take up residence in any province; and
to pursue the gaining of a livelihood in any province.
What this means is that if a single province was to institute a safety net that incentivized the lowest income earners to move to and take up residence in that province, the result would be a mass influx of low income earners from the other provinces coupled with a relative increase in the tax burden and thus a concurrent disincentivization for medium and higher income earners to move along with them. In this sense our bill would rise but without a relative increase in our ability to foot that bill. The Charter precludes provinces from having their own “immigration policies” and so as far as my understanding takes me (and my understanding is likely incomplete), the only way to prevent this from happening if a UBI was instituted in Alberta would be for the other provinces to implement their own programs in counter-balance to this effect.
Justin, you are, effectively, making an argument for a federal program as distinct from a provincial program. Personally, I absolutely prefer not UBI program, whether federal or provincial.
This just in from another conservative, Andrew Coyne – https://www.theglobeandmail.com/opinion/article-has-the-basic-income-idea-been-debunked-not-so-fast/ –
Sorry about the paywall.
Here’s an excerpt:
‘For example, the [BC] report calculates that a $10,000 basic income, clawed back at 30 cents on the dollar, would slash the province’s poverty rate in half, at a cost of $4.5-billion. Even if you made no other changes to spending or taxes, you could fund that with another four points on the provincial sales tax.
What the report does suggest, however, is that a basic income won’t be achieved at one go, but rather in stages. That’s probably just as well. We already have a basic income for the elderly (Old Age Security plus the Guaranteed Income Supplement) and for children (the Canada Child Benefit). Filling in the gap – people of working age – will take time, and resources, and lots of trial and error. But if we ever do get there, the panel will have blazed much of the trail.