Guaranteed Annual Income
A Poverty Reduction Strategy For British Columbia:
The Guaranteed Annual Income (GAI)
Dr. Robin M. Richardson, Ph.D.
Leader, The Vancouver Island Party
November 27, 2017
On November 27, 2017. VIP Leader Robin Richardson attended the first of a series of poverty reduction workshops sponsored by the NDP government’s Ministry of Social Development and Poverty Reduction. He hand-delivered the following research paper on a Guaranteed Annual Income (GAI) for British Columbia to the Cabinet Minister, the Honourable Shane Simpson.
Your comments on this research paper are most welcomed.
BC does not need a patchwork of existing and new policies to fight poverty. A proven solution is a universal guaranteed annual income (GAI). The solution to most poverty is to give the poor more money, with no disincentives to work. Get them out of the poverty welfare trap as soon as possible.
BC should adopt three pilot projects such as in Ontario. These should be Port Alberni (Green Party recommendation) and locations in Vancouver or the Lower Mainland and a town in the BC Interior.
Benefits To Recipients and Government Budgetary Savings
Canadian (Dauphin, Manitoba) and international examples (The Eastern Band of the Cherokee Nation in North Carolina, Alaska, Finland, Utrecht – The Netherlands, and other locations in Africa, Brazil and India) prove that a GAI delivers many positive results to Participants and Savings to the Government that adopts it.
Based on many studies, a GIA offers substantial benefits to Participants and budgetary savings for the BC Government in the following eight categories:
1. Social Services: Less need for social and healthcare workers, although some would still be needed for the mentally ill, severely disabled and those with addictions. Less child and spousal abuse.
2. Housing: A GAI at the right level may eliminate the need for the provincial SAFER program and stimulate builders to build more affordable housing.
3. Health: Less hospital admittances. Less use of expensive medical resources (surgeons and support staff, expensive equipment). Longer maturity leaves. Reduced levels of depression, anxiety and attention deficit hyperactivity disorder (ADHD). A possible reduction in suicides.
4. Justice: Less crime. Lower police, detention and court costs.
5. Economic: More working time, not less. No disincentive to work. Start and/or expand small businesses. Possibly no need for a controversial job-killing $15 per hour minimum wage.
6. Education: Stay in high school longer. Fewer dropouts. Better marks. More money for college and university entrants. Better use of skill training. More use of adult education. Literacy training. More stay-at-home parents. Improved opportunities for early childhood education. Less need for daycare centres.
7. Seniors: More financial ability to use long-term care facilities and other rental accommodations.
8. Administrative Costs: Very little. Adjustments, either up or down, in the GAI Supplement will occur once a year at tax time.
In measuring the cost of a GAI for British Columbia, policy-makers should use a Net Cost measure, not the Gross Cost. In other words, deduct the SAVINGs from other government ministries. Also, include measures of increased provincial Gross Domestic Product (GDP) and reduced unemployment.
What would a Guaranteed Annual Income for BC look like?
Here are some recommendations from the Vancouver Island Party:
1. Coverage: Universal. Everyone with 6 months permanent residency in BC (the Alaska Permanent Fund Dividend model).
2. Level: The Port Alberni and BC Interior Locations: $12,000 per year, payable $1,000 per month, in $500 instalments on the 1st and 15th of the month.
The Vancouver or Lower Mainland Location: $18,000 per year, payable $1,500 per month, in $750 instalments on the 1st and 15th of the month.
3. Inflation: Indexed by the cost of living where the Recipient lives.
4. Taxation: Payments go to everyone, but because the rich would be paying more taxes, they would not be getting as much benefit from the program as low-income people who need the help. It is a more meaningful program than tax credits, which the poor cannot use.
The BC Government has an opportunity to introduce a truly workable and proven solution for a comprehensive and affordable poverty reduction strategy. The need is great and the timing is right.
Background of the Author
Dr. Robin M. Richardson, PhD., first began studying the GAI when he was studying economics in his doctoral program at Harvard University in the late 1960s. Dr. John Kenneth Galbraith was Dr. Richardson’s Faculty Advisor. Dr. Galbraith was a strong proponent of the GAI for the United States.
At about the same time, Dr. Milton Friedman of the University of Chicago published a seminal paper on the same subject, advocating a Negative Income Tax. This research influenced President Richard Nixon to propose The Family Assistance Plan in 1969. Unfortunately, the US Congress did not pass it.
Dr. Richardson is a distinguished business economist who has served as Senior Economist for the Toronto Dominion Bank, Chief Economist for a major Stockbrokerage Company and National Research Director and Chief Economist for the Canadian Taxpayers Federation. Dr. Richardson is also a former Canadian Member of Parliament and public policy analyst. He is an author, pastor, historian and former college professor.
Dr. Richardson lives in Victoria, BC and at his vacation home in Nanaimo, BC with his wife Jacqui of more than 50-years and their dog, Daisy. Robin and Jacqui have two children and two grandchildren.