WE NEED A BASIC INCOME IN NOVA SCOTIA

2018 Shaw Lecture Income guarantees, freedom and global security Elizabeth Kay-Raining Bird & Pierre Stevens Basic Income Guarantee - Nova Scotia https://www.facebook.com/basicincomeNS/ Topics

1. BIG-NS and its activities

2. The Nova Scotia context

3. Why a Basic Income in Nova Scotia?

4. Funding a Basic Income In a society as wealthy as ours it is a violation of human rights and common decency for any child or adult to live in poverty.

BIG-NS THAT’S WHY BIG-NS WAS FORMED

Since 2015 https://www.facebook.com/basicincomeNS/ Member, Basic Income Canada Network https://www.basicincomecanada.org/ BIG-NS

Goals • Educate • Advocate • Feasibility study: how best to implement a Basic Income in Nova Scotia • Implement a Basic Income in Nova Scotia BUT, we do not want just ANY Basic Income Guarantee 6 BIG-NS Principles

1. Autonomy: BI goes to individuals not families • Allows individuals to make their own decisions. 2. Universality & Unconditionality: Everyone is deserving 3. Dignity: Treat all people with respect • No means testing or need to prove deservedness. 4. Universal responsibility: funded through a progressive taxation system • Provincial and federal governments mutually responsible • Redistribution of wealth

BIG-NS, 2017 6 BIG-NS Principles

5. Economic integrity: financially viable • Accompanied by laws that prevent siphoning off the BI e.g., minimum wage, labor, housing…

6. Social integrity: BI is only one part of comprehensive and integrated supports • BI would replace some services e.g., income assistance • BI would not replace others e.g., disability supports • Still others should be added or augmented e.g., pharmacare, dental care, mental health and addiction services

BIG-NS, 2017 BIG-NS Education e.g., Conferences April 2016 October 2017 Next conference April 27, 2019 Halifax public library

Speakers include Evelyn Forget Catherine Mah BIG-NS: Advocacy

• Community groups, stakeholders • Politicians • All parties • All levels of government—municipal, provincial, federal, indigenous Politicians

Federal Provincial Municipal Indigenous

Scott Brison Randy Delorey Mayor John Savage Native Council of Nova Andy Fillmore Labi Kousoulis City councillors: Scotia Guy Caron Joachim Stroink Waye mason Megan Leslie Brendan Macguire Shawn Cleary Maureen MacDonald Lisa Blackburn Lisa Roberts Sam Austin Susan LaBlanc Lindell Smith Gary Burrill Lorelei Nicoll Barbara Adams Tony Mancini Community Services staff: Richard Zurawski Nancy MacLellan Steve Craig Brandon Grant Russell Walker Rhonda Judge CPED BIG-NS Participated in the HRM/United Way Poverty Solutions Initiative

• Immediate recommendation 1.5: “Work with all levels of government and community partners to complete a feasibility study looking in detail at how to implement a basic income.” (p. 32) • Systemic Change (long-term) recommendation 24.5: “Implement a basic income as a means to provide a living income for low-income and marginalized populations.” (p. 46) Building Poverty Solutions: Ideas for Action. A Community Report. HRM, 2018 WHY A BASIC INCOME? Because poverty rates in Nova Scotia are high, poverty is racialized, & vulnerable groups are over-represented Child & Family Poverty in Nova Scotia

21.6% overall

CCPA: 2017 Report Card on Child & Family Poverty https://www.policyalternatives.ca/publications/reports/2017-report-card-child-and-family-poverty-nova-scotia Poverty is Racialized

African Nova Scotians • 32.1% live in poverty Children • 39.6% live in poverty Youth, 18 – 24 • 50.2% live in poverty

• (Duvet, 2017. NS Advocat)

CCPA, MacDonald & Wilson, 2016, https://www.policyalternatives.ca/publications/reports/shameful-neglect People with a Disability are More Impoverished

Stats Canada (2017) https://www150.statcan.gc.ca/n1/pub/75-006-x/2017001/article/54854-eng.htm WHY A BASIC INCOME? Because poverty damages people The “damages [poverty] caused to human beings' life chances, to communities and to social and economic productivity and progress are clear, and cannot be ignored. Poverty is the best predictor of early illness, early hospitalizations, longer hospital stays and earlier death. It is a reliable predictor of substance abuse, food insecurity, poor education outcomes, and for some, trouble with the law.” (p. 16).

Segal, H. (2016). Discussion paper on Ontario pilot project. https://www.ontario.ca/page/finding-better-way-basic-income-pilot-project-ontario 50% of illnesses are caused by factors related to poverty: social determinants of health

Canadian Medical Association https://www.cma.ca/En/Pages/health-equity.aspx WHY A BASIC INCOME? Because social assistance rates and minimum wages are not enough Provincial Social Assistance Rates

NS Total Welfare 2016 LICO Poverty Gap Welfare Incomes Income as % of LICO Single $7,349 $17,485 -$10,136 42.0% employable

person with $10,181 $17,485 -$7,304 58.2% disability

single parent, $17,727 $21,281 -$3,554 83.3% one child

couple, two $26,429 $33,060 -$6,631 79.9% children

Note: LICO = Least generous measure of poverty (compared to LIM, Market Basket) Tweedle, Battle, & Torjman (2017), Caledon Institute of Social Policy; http://www.caledoninst.org/Publications/PDF/1086ENG%2Epdf What if you work full time at minimum wage--$11/hour?

Family size Rural NS Halifax 1 Full-time Worker LICO-BT LICO-BT Income Before Taxes

1 $17,175 $21,487 $20,020

2 $21,382 $26,748 $20,020

4 $31,915 $39,926 $20,020

(*Stats Canada, 2018 https://www150.statcan.gc.ca/n1/pub/75f0002m/75f0002m2016002-eng.htm https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110024101&pickMembers%5B0%5D=2.2 ) WHY A BASIC INCOME? Because poverty is expensive Health Costs in Nova Scotia

MacEwen & Saulnier, 2010, CCPA In a society as wealthy as ours it is a violation of human rights and common decency for any child or adult to live in poverty.

BIG-NS WHY A BASIC INCOME? Because paid work is often insecure and increasingly precarious

Work Is Increasingly Precarious

Lewchuck et al., 2015 WHY A BASIC INCOME? Because providing more income reduces poverty and its negative effects Impact of Old Age Security

Guaranteed Income Supplement (GIS): 1976 Spousal allowance: 1975, 1985 Allowance for survivor

Stats Canada, 2012 http://www4.hrsdc.gc.ca/[email protected]?iid=23#M_4 After the introduction of Guaranteed Income Supplement, food insecurity rates dropped from 22% to 11% and health improved, despite aging. WHY A BASIC INCOME? Because it works: It’s not all about money but it’s always about money Research shows that a Basic Income

• Decreases health care costs • Reduces high school drop-out rates • Increases engagement in post-secondary education • Increases work choices e.g., Forget, E. (2018); Forget, E. (2011); Forget, E. (2013)

• Radically reduces poverty • Stimulates urban and rural economies: money stays in the community Inspirations from Last Night

“Whatever you do, you must have a consciousness of victory” Four in the Moment

“We need to discover ways of generating collective self-care” Angela Davis HOW TO FINANCE A BASIC INCOME IN NOVA SCOTIA Pierre Stevens or

How eminently affordable a Basic Income is! $2.1 billion Nova Scotia Department of Community Services

Basic Income Analysis, March 15, 2018 Nova Scotia Department of Community Services Basic Income Analysis, March 15, 2018

The cost to provide each household with a “Guaranteed Minimum Income” (GMI) @ 100% LICO ($16,730) Nova Scotia Department of Community Services Basic Income Analysis, March 15, 2018 The cost to provide each household with a GMI @ 100% LICO ($16,730)

Program Costs = $2.1 billion Nova Scotia Department of Community Services Basic Income Analysis, March 15, 2018 The cost to provide each household with a GIM @ 100% LICO ($16,730) Program Costs = $2.1 billion

Concluded that GMI options are either highly expensive and inadequate Nova Scotia Department of Community Services Basic Income Analysis, March 15, 2018 The cost to provide each household with a GIM @ 100% LICO ($16,730) Program Costs = $2.1 billion Concluded that GMI options are either inadequate or highly expensive

Therefore Income Assistance Programs should continue Costs for a GMI @ 100% LICO =

$2.1 billion Costs for a GMI @ 100% LICO =

$2.1 billion

Too Expensive! Costs for a GMI @ 100% LICO = $2.1 billion In-scope programs = $409 million In-Scope programs:

• Income Assistance 238.5 • Poverty Tax Reduction tax Credit 3.7 • Nova Scotia Child Benefit 26.0 • Affordable living Tax Credit 66.0 • Low Income Tax Reduction 7.8 • Disability Tax Credit 23.0 • Heating Assistance Rebate Program 10.3 • Property Tax Rebate for seniors w/GIS 7.3 • Provincial Income Tax Refund Seniors on GIS 9.5 • Age Tax Credit 17.1 Department of Community Services assumptions: Only Department of Community Services budget considered No other NS government department budgets considered No consideration of the beneficial effects of a Basic Income on the Nova Scotia economy (e.g., health savings). No federal cooperation Top-Up Model: winners and losers!

GMI @ 50% LICO would cost $828 million NS Department of Community Services says: the door is closed. Costing has been done and a GMI is too expensive! BIG-NS says:

Time to do a real feasibility study with a more progressive model and a broader lens A More Progressive Model with a Broader Lens

Not just a Top-Up Model: A Negative Income Tax Model Not only the Department of Community Services’ responsibility Not only a Nova Scotia responsibility Society at large will benefit! A Negative Income Tax Model

• A Negative Income tax model has several features that can vary: • The Benefit Level: the maximum benefit payable to any individual • The Reduction Rate: the percentage decrease of Benefit Level due to higher earnings • The Break-Even Point: the income at which you receive no benefit. • Cost estimates for all of Canada vary from $50-80 billion • So, for Nova Scotia cost would be about $2 – 3 billion A Negative Income Tax Model

• An example

• A $20,000 basic payment at a 50% reduction rate (this means that for every additional dollar earned, the worker will receive 50% less in Negative Income Tax payments

1. Someone with an income of $0 would receive an NIT payment of $20,000

2. If they take a job that paid $20,000/year, they would receive a top-up of $10,000/year

3. If they take a job that paid $30,000, the top-up would be $5000

4. Once they would receive $40,000/year, they would receive no top-up SO HOW DO WE PAY FOR A BASIC INCOME IN NOVA SCOTIA? Funding for a Basic Income must be a joint Federal- Provincial responsibility .

Where can the $2.1 billion come from? The broader lens The Broader Lens

1. Nova Scotia Budget line revenue offsets 2. Future revenues 3. Further In-Scope Programs: Provincial Tax credits 4. Federal Non Refundable Tax Credits 1. Nova Scotia Budget line revenue offsets

Budgetary savings across departments • Community Services: Income Assistance ~$245 million. • Education: student loans, a part of the $46 million budget. • Small Business Development loans: ~$105 million budget • Health savings (research shows that there is a drop of 8 % in Hospital Costs): 8 % of 4.2 billion = $330 million 1. Nova Scotia Budget line revenue offsets

• HST-GST rebates: ? • Housing and Family Services: ~$40 million • Judicial / Criminal System: $32 million - $60 million (MacEwen & Saulnier, 2010) • Criminalization of Poverty: Incarceration ?

• Others (e.g., Service design and Delivery) $20 million (income Assistance Field Staff)

Total: ~$713 - $846 million 1. Nova Scotia Budget line revenue offsets

Total: ~$713 - $846 million

According to Department of Community Services Basic Income Analysis, $828 million is the GMI cost @ 50 % LICO So we could pay for a 50% LICO Basic Income This analysis is already more progressive than their model as it does not fold the Nova Scotia Child Benefit into the revenue offsets 2. Future Revenues

• Intergenerational Poverty: $105 - $185 million (MacEwen & Saulnier, 2010) • Lost Productivity: Income Tax revenue: $135 million (MacEwen & Saulnier, 2010) • Increased HST Revenue • Food Security Savings Foodbanks? • Homelessness, Long term mental health, etc. 2. Future Revenues

These future revenues of $240-$320 million are a return on investment if we had a GMI @ 50% LICO 2. Future Revenues

Economic stimulation

Canada’s GDP increased by 0.5% after the introduction of the Canada Child Benefit. If we, conservatively, estimate a similar effect from the introduction of a BI in Nova Scotia, this could result in an increase of Nova Scotia’s GDP by $50 million

(The Governor of the Bank of Canada in October episode of CBC “the House” ) 3. Further In-Scope Programs: Provincial Tax credits Provincial Revenue (some of the In-Scope Programs): • Poverty Reduction Tax Credit: $ 3.7 • Affordable Living Tax Credit: $65.9 • Low Income Tax Reduction: $ 7.8 • Heating Assistance Program: $10.3 • Property Tax Rebate: $ 7.3 • Etc. etc.

• Cost savings at the Provincial level: $160 million Total Financial Benefits to Nova Scotia from a Basic Income

$490-530 million 4. Federal Non Refundable Tax Credits

• Our analysis seems to indicate that Nova Scotia can not only afford a GMI @ 50% LICO Basic Income on a stand alone basis, but will financially benefit from it. • However, this modest GMI can have many winners and losers (but less than DCS’s model) • Can we harmonize with a Federal Component? 4. Federal Non Refundable Tax Credits

• “We argue that a grand plan for a basic or guaranteed income is not necessary because self-financing redesign of existing tax credits to be refundable can better target benefits to low-income families while improving tax equity.” • … “Implementing a “universal” guaranteed basic income (UGBI) amounts to adoption of changes to the tax system that can be essentially self-financing while improving tax equity and the transfer of benefits to those households most in need of income assistance.”

(Stevens & Simpson, 2017) Federal and Provincial Revenue Neutral Tax Reform • Basic Income for single adult = $9954 • Disability Top-up = $2150 • Caregiver Top-up = $1200 • Nova Scotia can finance GIM @ 50% LICO = $8365

• Total = $18319 • Equivalent to a 110% LICO

(Stevens & Simpson, 2017) Conclusion

• A Full LICO Basic Income is affordable for Nova Scotia. Recommendation

That the Nova Scotia government immediately initiate a progressive, interdepartmental Feasibility Study in cooperation with partners from the Nova Scotia community as outlined by Basic Income Nova Scotia Final Thought There are those who suggest that incremental improvements to existing programs can eventually accomplish reductions or even eradication of poverty and greater equality. I doubt it. We go from government programs to raise benefits, to those that implement austerity measures. It's been a step forward, then a step back. As the quote from Senator Croll demonstrates, we haven’t moved the yardsticks much in decades. Another illustration of this relates to the Canada Child Benefit. This is a substantial measure taken by the Trudeau government which touts that it is taking 300,000 children and their families out of poverty. That’s great, but what about the remaining one million Canadian kids still in poverty? When will their turn come? Governments, of any political stripe, bring in big programs that partly address an issue and then move onto other areas of need to fulfill a wide range of election promises. Incrementalism has not worked enough for those in need. People need a firmer base from which to move forward in their lives. It’s time to end poverty and reduce inequality in this country we are blessed to live in. It’s time to improve equality of opportunity and better sharing of our prosperity. It’s time to explore a new way, a new approach. It’s time for Basic Income in Canada. Eggleton, Corak, Forget, Lewchuk & Raphael (2018). The Poverty, Inequality, and Job Challenge: The Case for Basic Income in Canada. Lindsay, ON: Fireside Publishing. THANK YOU