Thank you very much. I appreciate the opportunity to speak to this committee. I am a professor in the Vancouver School of Economics at the University of British Columbia, or UBC, but, of more relevance for this, I was the chair of a panel created by the B.C. government to investigate basic income, or BI, as a possible policy tool for the province. The panel consisted of Professor Lindsay Tedds, Professor Rhys Kesselman and myself. We were given two years with a mandate to consider whether B.C. should shift to centring the transfer and support system on a BI or, alternatively, how to otherwise reform the system. We were given considerable resources and access to rich administrative data. Using that, we commissioned over 40 research papers, both on issues with the current transfer system and investigating claims made about a BI. We also had extensive discussions with affected groups and implemented a unique opinion survey. We carried out simulations of over 1,600 variants of BI policies, and had extensive discussions with civil servants in a wide set of B.C. government ministries that would be affected by a BI and the reforms that we set out as alternatives.

Our work is available as a 500-page report, which, along with all of the research papers, is available at bcbasicincomepanel.ca and in a book we published with the Institute for Research on Public Policy, or IRPP. We believe that our work constitutes the most thorough evaluation of a basic income carried out in Canada and possibly anywhere in the world.

We framed our investigation in the context of the question of what policies would move Canada toward being a more just society. In fact, we developed a new policy analysis framework centred on this question, taking the goal as a society that provides the basis of equal self-respect and social respect. I view those goals as ones shared with people who advocate for a BI. I also agree that, in some circumstances, a guaranteed income is part of what is needed and would endorse some of what are called basic incomes, but the basis of self-respect and social respect also includes respectful workplaces, real opportunities, supportive communities and mental health supports. I worry that a general BI as a policy goal misses that and, in particular, misses how income supports interact with creating those other conditions in complicated ways.

I also agree with BI advocates that the current system is problematic in its levels of support, complexity and failure to treat those in need with sufficient respect. In fact, we spent considerable time in our report detailing those problems. A BI has the appearance of a simple, direct response to those problems. What could be simpler than sending people money through the existing tax system? But when we think about how to actually implement it in a way that integrates with our existing systems, it no longer appears so simple.

We did the exercise of documenting all the support programs that all the levels of government supply, and asking if each could be replaced by a BI. The answer in almost every case was “no.” That means creating a BI will create new complex interactions, and even the seemingly simple idea of delivering it through the tax system is not so simple. Eight per cent of Canadians do not file taxes in a year, and, with taxes only assessed annually, people who experience a loss in income won’t be able to register their need for support through the tax system for between 4 and 16 months. To address these problems would require creating a system that finds non-filers and works on a sub-annual frequency. In other words, it would require creating a system that looks much like existing income assistance systems. As we show, the welfare wall would be just as high or higher under the new system than under the current tax and transfer system.

A BI is not a simpler system. It’s another complex system, but maybe it’s a better complex system. The research studies that were part of our report assess claims in a wide variety of areas: A basic income would reduce health care costs and improve health, increase entrepreneurial activity, allow workers to walk away from bad jobs and so on. In each case, we found that a BI might have positive effects, but there was an alternative policy that was better.

By our assessment, a BI is an expensive approach that will provide inferior results in terms of moving us toward a more just economy. To be clear, we believe that we need to spend money to address the problems our society faces. We certainly agree those problems are real. The point is that there are more effective ways to spend money.

This returns us to the broader question of the goal of the policies. If it is just a numerical goal of reducing the number of people below the poverty line, then a BI is a very direct way to do that. But if it is to create a more just society, it is much less clear.

One way to express this is that poverty is about much more than a lack of income. It is about a lack of respect and integration. A cash-centred approach supports monetary autonomy, but ignores the fact that true autonomy is built on a base of community, self-respect, health and housing. I worry that such an individualistic approach like a BI puts the onus of fixing our existing systems — with their embedded structural inequities — on the shoulders of the vulnerable people themselves. It purposely chooses a more individualistic over a more community-oriented society.

A key example is support for youth aging out of foster care — one of the most vulnerable groups in society. Simply giving them a basic income and wishing them well is evidently not a good approach. We advocate a policy that includes a phased-out secure income, but that emphasizes building community and personal supports. It’s not that BI advocates are against those other supports; it’s that a general BI approach acts like you can separate the income and the other elements, and, in doing so, it could end up being an ineffective way of spending our policy dollars for creating a more just society.

Thank you again for this opportunity. I look forward to your questions.

That’s right; I gave you the teaser. We were commissioned to examine whether a basic income would be a good policy for British Columbia, but also whether there should be a pilot to study it further.

We were given a broader mandate to say, “If not a basic income, then what else?” We set out with quite an open mind, trying to put together a body of evidence that would be useful for other people, even if they didn’t agree with what we concluded, and that’s part of what we think we created.

It’s the latter. We came to the conclusion that in most of the policy areas that we considered — and we considered a lot of them — a basic income was often a path that would help, but there were better, more direct and more effective ways to spend policy dollars. In the end, we came up with a set of alternatives instead of a basic income.

I should say that, in some of the areas, we recommended what you might call a targeted basic income — for example, for people living with disabilities — but, as an overall policy goal, we didn’t endorse a general basic income, and we also recommended against a basic income pilot.

That’s a great question. I appreciate knowing your background, so I know that you’re aware of everything I’m talking about.

We didn’t do a pilot. Ours was meant to be input to further deliberations of the kind that I’m sure you’re familiar with. In fact, B.C. is going through a renovation of its income assistance system right now, and our report fed into that. We’ve been talked to several times to talk about how to do that.

As a useful example, as you know, a large portion of the income assistance and social assistance systems in Canadian provinces right now have to do with people living with disabilities. We recommended a big suite of changes that would make access simpler, as well as make a whole part of it more dignified, and would bring the benefits up in a permanent basic income way to the poverty line — because now they’re below it — but it also had a big part that was assisted to work. We heard from people living with disabilities that there was a feeling that this was a system that punished them for trying to work or even volunteer. We were trying to find our way toward a system that was more respectful and more dignified, with better supports, and our feeling was that a basic income alone was really not going to do that.

That’s quite a good question.

One example that comes to mind is one of the areas that we’re all concerned with: people living in poverty. The biggest group with the highest poverty rate is single adults without children because they don’t get the Canada Child Benefit, and they’re not yet able to get the Guaranteed Income Supplement or Old Age Security benefits.

If you take a close look at that group, the top 20% in terms of income are actually people who are working more than 40 weeks a year. They’re working in poverty. In that group, a substantial proportion are women working in service sector-type jobs in cities. A lot of them are racialized and immigrants. For that group, our feeling is that a basic income could potentially, as you said, get them more directly to the poverty line. But that’s not where they’re at. What we need to do for them is a combination of increasing minimum wages and increasing the Canada Workers Benefit — those are policies that already exist, so we don’t need to create other ones in those cases — as well as increase the enforcement of regulation. A lot of what happens with that group are problems with dignity at work and control over their work schedule — it’s all things that, in our mind, a basic income wouldn’t address. Our feeling is that all of those tools are sort of there, but there are ways to use them much better to directly affect and help, hopefully, that group.

I have seen the report; it’s authored by a set of people for whom I have great respect. They are high-level researchers. Moving it to the country as a whole is a difficult prospect. Spending directly on moving incomes up is clearly a way that you would reduce monetary poverty, but poverty is more complex than that. That’s part of my point.

In terms of moving it from P.E.I. to the rest of the country, it’s important to notice that in the proposed pilot, 65% of the expenditures that were needed for that basic income would be paid by the rest of Canada, not P.E.I. In other words, you would have a funding model where the money is sort of coming in from the heavens for 65% of it. If you take that and move it to the national level, you couldn’t do that anymore. P.E.I. is small enough that you can do it without affecting anybody’s federal tax rates. If you move it to the federal level, however, you will have to move federal tax rates considerably. When you do that, you will change incentives and the whole tax structure. That means the movement from there to the national level is not clear, at least in my mind.

That’s a good question. I don’t know where the 10% comes from. I would dispute that you can get a lot of savings exactly for the reasons that I just said in my opening remarks, which is that 8% of Canadians don’t file taxes. If you want to replace some of the existing systems, like income assistance systems, for example, to say, “We’ll have less red tape because we won’t have those systems,” you’ll have to implement a different system where you go and find those people. It’s not clear to me that there are a lot of savings to be had there.

That’s a great question. It’s a bit outside of my purview. I don’t study federalism. I agree that I think it would be hard. On the other hand, I think if the feds were coming to the table with a bunch of money, as in the P.E.I. example, saying, “We’re going to take over your income assistance and social assistance components,” my guess is that you would find a certain amount of positive response to that. But, as you were saying, the devil is in the details.

As I said, Lindsay Tedds and her team went through literally every program that was available to British Columbians in our case, and we found little scope for taking things out. If that’s true, then the complexity of the project that you’re talking about is bigger than it might appear on the surface.

Yes, I think it could. To be clear, it’s something we probably need for all of our programs. Whether you decide to go for a basic income or not, that seems like a platform we want. Yes, I agree; it would be a step forward in that project.

To be clear, if you had read out the rest of that passage, you would see that we used almost the same words that you used. We didn’t say it was a perfectly good house; we said it was a house where the doors are often hard to access. We didn’t use the foundation analogy, but it sounds perfectly in line with what we think. We believe the house needs to be reformed in a big way. We said that sometimes a basic income is presented as something that streamlines — that knocks out walls and makes things simpler. My whole argument — and the thing that I’m trying to say here — is that a basic income has to be integrated with that house. As soon as you try to do that, it makes the house more complicated rather than simpler.

In our mind, in many cases, trying to knock walls down doesn’t improve things. A basic income is not going to deliver better outcomes. I’m not disputing that it can sometimes deliver good outcomes; I’m saying that, in many cases, there is something that does it better. That’s the point we’re trying to make. It isn’t that the current system is great — there are a whole bunch of arguments that it is not, and our whole suite of reforms that we propose says it’s not. A basic income can’t be separated from the others — to me, this bill says, “We do the basic income, and we also keep in place the other parts.” It’s the integration of those two parts that is the hard part. How one integrates it and makes it effective is the hard part of the question.

It’s not like I think you’re not aware of that; I just don’t see it in the bill.

That’s a good question.

It turns out that there are not a lot of studies out there on exactly how much health savings you get. There are studies on the benefits of cash benefit types of programs for health outcomes. Because a basic income is just one of those classes, you would get the same benefits as you would out of, say, a wage subsidy program — to a large degree.

In terms of the savings on the fiscal side, the main study out there right now is by Professor Forget on the Mincome experiment. I published an article in a peer-reviewed journal that shows that, in fact, there were no such savings from the Mincome experiment. In regard to the claim that there ought to be, it seems plausible that there might be, but our point was that there is not evidence — that we know of — that shows that there actually is health care savings of that kind.

Actually, my study was a critique of exactly that number. I can explain it quickly, I think: In the Mincome experiment, the people of the town of Dauphin were given a basic income. What Professor Forget did, which was quite remarkable, was pull together all this health expenditure data, follow the people of Dauphin over time — as the Mincome experiment came into place and then passed out — and compared it to other towns in Manitoba.

What you find if you pull the data apart, I argue, is that, yes, Dauphin had a lower level of expenditures, but it was actually on a decreasing path of expenditures before Mincome came in, and it continued on that decreasing path after Mincome came in.

In other words, the finding that Dauphin had lower expenditures was the path that Dauphin was on. In my mind, while that’s published in a peer-reviewed journal, that number doesn’t stand up. I certainly wouldn’t recommend a government basing any kind of fiscal projections on that claim of 8% savings.

That’s an interesting question.

Straight out of the gate, it wouldn’t be one of the concerns that would make me go away from a basic income. The main impact on increased demand would come because you’re taking tax dollars away from people who tend to spend fewer of their dollars on goods, and giving them to people who are spending every dollar they have on goods. That will push up demand, to some degree, in the economy, but I wouldn’t predict that it will be so strong relative to the other factors that you mentioned — which are truly driving things at the moment — to really make a market change in any of that. It wouldn’t be a major concern of mine.

I don’t know of any. Part of the problem is that most of the attempts to study basic income look at the impacts at the individual level, and you’re talking about things that happen at the societal level.

The only thing I would throw in is to caution against treating the CERB like a basic income — as an example of anything that has to do with a basic income. It was an emergency measure. For the reasons you said, you had people who were forced to hold back their consumption for a while. They were then given those benefits, and things started opening up, and it all comes flooding back in. That, in my mind, interacts with the supply chain problems at the same time, and the two forces coming together are a lot of what’s been going on.

Hopefully, we won’t be in those supply chain problems forever. I think the liquidity burst that we saw there is not what would happen with a basic income.

It’s a good question. It’s one of the major concerns, and it’s something that we studied. It has been a focus of many studies on basic income, and the general conclusion is that it won’t change labour force participation very much.

It’s interesting why that’s true in the Canadian context. There are offsetting effects. On the one side, for the people who are on income assistance, this tends to help them get into the labour market to some degree. On the other hand, some people who are already working will potentially cut back their labour supply to get access to the benefits, and the two cancel themselves out. But the net result is very close to zero in almost every study I’ve seen.

We haven’t investigated why no one picked it up. Our argument — which seemed to be in conjunction with what the government was thinking by the time we delivered the report — was that we don’t actually see such great benefits. In almost every area that we could think of, there was some other more direct policy that could accomplish what was needed at a somewhat lower cost. In regard to whatever amount you feel that you have to spend, a basic income was not the most cost-effective way to achieve the goal of a more just society in our context.

That’s our interpretation. Other people would probably have other reasons for why they think it hasn’t happened, but my belief is it hasn’t happened because it isn’t the best system.

That’s interesting. That’s a very good question. I would separate it into two parts.

First, as you said quite well, our investigation — in some ways — was broken into two parts. One was investigating those downstream benefits. A large part of that was done not by us — the panel. It was done by the set of researchers that we hired — we didn’t hire them; nobody got paid in all of this, but they did get access to good data, and they studied many different questions.

For those downstream benefits, almost none of those studies took any particular philosophical stance, to tell you the truth, and most were done by economists who are more favourable to this more individualistic — more Rawlsian — approach to the question. I don’t think it would be fair to reject the questions about the downstream benefits based on the philosophical stance.

In regard to the philosophical stance, it’s potentially fair that you’re saying that we’ve maybe taken a stance that makes a basic income harder to cross the line, but that is because of our reading of what it is to truly be a just society — one where we worry about social interactions. For example, if I go back to my example earlier about women working full-time essentially in poverty, a basic income as a response to that problem is a response in which we give people a certain amount of income, and we hope they will then walk away from bad jobs and force their employers to do better.

In our mind, an approach that is more, in some sense, communitarian — that says we are in this together, and we’re going to create and enforce regulations — seemed, to us, to be a more effective way of reaching the direct goal of a better job for these people, and also creating a society that we think of as more just, honestly.

I agree with that.

I appreciate the depth of your reading; I really do. I don’t agree that everything you’ve said is a fair interpretation of what we wrote. For example, on education, we had a study that explicitly looked at human capital creation and training, and looked at how a basic income would work into it. We had another study that looked at child education and exactly how a basic income would work into it. We looked at those very explicitly.

I do agree with you that some of the statements are on a broader scale — a basic income would make for a society where everyone can pursue their goals, and it is a happier, fairer society — exactly because we were trying to hold ourselves to empirical standards. We had trouble finding anything that would empirically back that up. The closest we could get was the following questions: When there are higher benefits, do we see more volunteering? Do we see more caregiving? Do we see things that look like pro-social changes in society? We could find no evidence that had happened.

I’m not saying that if everyone has a basic income, it wouldn’t happen. I’m saying that’s the piece of the pie that we are less sure of, and we tried to write that as clearly as we could, but it’s exactly because I don’t know of any evidence out there to support that claim.

[Translation]

I do think this is difficult. Particularly from the perspective of Quebec, it would be very difficult. There would have to be an agreement from the provinces that they are willing to hand over some of these responsibilities, effectively, to the feds.

Essentially, the only way to make it work on a national level or, essentially, fiscally would be that you would be thinking about a system where the provinces would, more or less, withdraw from income assistance. Whether you could make that agreement easily is, obviously, up for a lot of questions.

I should say that even there it’s not quite so clear. If you look at the P.E.I. proposal, that proposal said, “Because we can’t find people at the sub-annual level fast enough, we’ll actually keep the income assistance system in place in order to make sure that we pick them up. It will be on a reduced scale, but it will still exist.” It’s another example of why you won’t get big savings from a basic income, but also one that, as you’re saying, would greatly complicate the fiscal federalism questions.

[Translation]