Introduction
Due to the rising poverty level in Canada, Various financial programs have been launched and tried by different levels of the Canadian government as a response to the low-income problem and caution those living below the poverty level. The basic income program, like others, was recently proposed by the government amid intense opposition and criticism from certain factions.
Unlike other programs, the basic income initiative aims to provide financial incentives and assistance to individuals without imposing conditions. All families and individuals living below the poverty line are eligible for the program, subject to certain conditions. Although initially developed as a response to rising poverty among some families, the program has since been divided into two components: the universal basic income and the guaranteed basic income, each with its own specific regulations.
Definition and Values of Basic Income
Basic income refers to the universal financial support provided to low-income individuals without conditions that would deter them from poverty. The basic income debate highlights the discussion and arguments surrounding the program from various perspectives. Basic income is motivated by values such as equity, equality, and fairness, as it ensures that all individuals have a dignified living.
Due to economic inequality in Canada, middle-class families lead dignified lives, while their low-income counterparts often languish in poverty. Consequently, the basic income program was introduced to promote equity, equality, and fairness by bridging economic gaps and enabling the poor to afford a dignified standard of living.
Historical Perspective
The history of basic income dates back to the 1930s, when the premier of Alberta, William Aberhart, attempted to introduce a basic income program to caution his people against poverty, in line with Major C.H. Douglas’ Social Credit theory. Before he could implement the program, the Federal Government thwarted his efforts. Later in the 1970s, the Canadian Department of National Health and Welfare introduced a sister program, the Negative Income Tax, with a similar objective of poverty reduction (Gibson et al., 2020).
The program, which was dubbed the white paper, was intended for individuals in the labor market whose salaries and wages could not adequately sustain them. The department analyzed the program’s effectiveness and potential impact on people and found it useful. As a result, the National Council of Welfare pushed for the creation of a guaranteed annual income in the whole of Canada. The Canadian federal government, in collaboration with the Manitoba local governments of Winnipeg and Dauphin, introduced an income as part of the basic income program.
The Manitoba income program targeted 10,000 community members deemed vulnerable and in need of financial incentives. The program implemented a negative income tax, which provided low-income earners with tax relief and the opportunity to bridge the economic gap. Even though the program collapsed due to insufficient funding, the beneficiaries favored the initiative, noting that it helped low-income earners afford their necessities.
According to many beneficiaries, the program made it easier for low-income families to support their children and has called for its reinstatement. In addition to uplifting low-income families, the program reduced child labor and employment by empowering households and enabling them to become self-sustainable (Stevens et al., 2022). Initially, children were filling the labor sector to supplement their parents’ low earnings.
However, the introduction of income ensured that low-income families had sufficient resources to cater to their needs, including those of their children. Some critics argued that the program reduced individual productivity, as many people began to disconnect from their usual jobs. Due to the program’s financial incentives, many families did not see the need to continue their various jobs, resulting in a low labor supply.
In 2010, the Canadian government conducted a poll to gauge public opinion on the significance of social programs, particularly the basic income initiative. Out of the citizens interviewed, the majority voted in favor of it and called for its reinstatement. In response, the government, through Prime Minister Justin Trudeau, confirmed its intention to grant a new trial in 2016. By 2017, the basic income pilot project had commenced and was doing well, with many beneficiaries joining.
With a $15,000,000 budget, 4,000 participants received $3,999 each (Perkins et al., 2022). The project targeted low-income earners, with individuals earning below 24027 dollars per year given priority. The program continued to impact and transform lives for two years. Following the change of regime and the Progressive Conservative government’s coming to power, the program was canceled. Even though the new government had promised to retain the project during its campaign, the program was canceled in 2018, having been implemented by the previous liberal administration.
The new regime, through the Minister for Children and Youth Services, Lisa Macleod, defended the government’s move to cancel the program, citing its high cost. According to the new government, the program did not help people to become self-sustainable and independent contributors to the economy. Instead of promoting self-sustainability, the program fostered laziness and led people to disconnect from their jobs. The majority of beneficiaries who were employed before the program withdrew from their jobs to survive on the basic income program, thereby affecting the labor supply (Gibson et al., 2020).
While the program was intended to supplement the low earnings of poor families, it ultimately became a hindrance to individual independence, as many became overly dependent on it. Some beneficiaries opted out of their various employment areas to wait for the financial incentives from the basic income program. Similarly, the government’s intention for the basic income program was to promote financial independence by empowering poor households and individuals to afford their basic needs, thereby avoiding dependency, which is the same issue the project aims to address.
While the government considered the move beneficial and necessary, some factions and groups felt it was not the government’s role to disconnect the program, as it had become a lifeline for many low-income families. One such group was the Ontario Coalition Against Poverty, which condemned the move, terming it reckless and careless. For the group, the cancellation of the program amounted to disregarding the lives of more than 40,000 families who depended on the initiative (Perkins et al., 2022). Their concerns were shared by other anti-poverty groups in Canada, who did not welcome the move. Apart from the anti-poverty groups, some local politicians condemned the cancellation of the program.
The Public Income Debate
The attempt to alleviate poverty and bridge the inequity gap has seen different levels of Canadian government developing various programs to caution the citizens and victims against the ravaging hardship caused by low income. One such program is the basic income program, which has a long history dating back to the early 20th century. Various Canadian governments have at different times developed several forms of universal basic income for low-income households and individuals. Even though they offer a wide variety, the objective has always been the same: to uplift poor families and caution them against the impact of poverty (Perkins et al., 2022).
Since many low-income families struggle to afford necessities such as food, clothing, housing, and education, the government deemed it wise to introduce financial incentives to support families living below the poverty line. In addition, the ravaging poverty among low-income families saw young children and teenagers dropping out of school into the labor force to support themselves and their families, since their parents’ income was not sufficient for all of them. The government introduced the Mincome, Negative Income Tax, and the Basic Income Pilot Project.
The basic income program has sparked contentious debates about its effectiveness, sustainability, and whether it is the most effective strategy. For proponents, such as anti-poverty groups, a basic income program was a viable strategy for eliminating poverty. They argue that most poor families, whether employed or unemployed, cannot afford necessities such as clothing, housing, food, and education; therefore, it is the government’s responsibility to assist these households through financial incentives.
The basic income program, such as the negative income tax, provided low-income individuals with the opportunity to catch up with their high-income counterparts by offering tax relief (Stevens et al., 2022). Similarly, the beneficiaries, mainly minority communities such as Black, Hispanic, and other marginalized groups, commended the program, stating that their lives have improved after receiving the financial incentives.
According to some beneficiaries, most families are now able to educate and care for their children. Unlike before, when most households had children who did not attend school due to low income, the program found that most households were in a position to care for their members’ needs.
Those in support of the basic income program argue that to alleviate poverty, the inequality gap must be narrowed by uplifting the poor. Even though unemployment is not a significant concern in Canada, some individuals earn very little income that cannot sustain their needs. To help such people, it is necessary to introduce financial incentives to supplement their earnings. For instance, the 4,000 people in the income pilot project earned less than $24,076 per year, making it difficult for them to afford a dignified life (Perkin et al., 2022).
The program, therefore, helped supplement their low earnings, enabling them to afford basic needs such as food, housing, and education. As confirmed by many beneficiaries, most families have become sustainable and self-sufficient after receiving financial incentives. In addition, teenage labor has decreased significantly as children have left the labor force. The teenagers who flocked to the labor sector to support their families backed off once their financial incentives were enough to support their households. The proponents of basic income thus consider it a sustainable strategy for poverty alleviation, as it helps bridge the inequality gap.
On the other hand, some critics argue that the basic income program is ineffective and unsustainable. Despite the successes mentioned by proponents, including beneficiaries, critics argue that giving citizens free money is unfair and cannot eliminate poverty. The introduction of a basic income is criticized for fostering a culture of dependency among citizens.
The majority of the program’s beneficiaries, who were initially self-sufficient, now rely on the initiative for food. To support their dependency claim, they cite the people who are disconnecting from their jobs and employment bases. They argue that some beneficiaries are becoming lazy and thus dropping out of their various jobs.
Additionally, critics cite the high cost of the basic income program. The income pilot project alone consumed more than $17 million in less than 2 years. The massive sum confirms the program’s high cost to the country. Despite serving only 40,000 people, the program had consumed that large sum of money (Perkins et al., 2022). The critics, therefore, argue that the basic income program is too expensive despite achieving little result. They believe the universal basic income policy is neither realistic nor sustainable for eliminating poverty, as people’s needs are diverse and cannot be addressed by simply providing free money.
Instead, they believe the government should introduce a mixed system that tackles special groups separately. For example, instead of giving everyone money, the government should focus on the aged, the disabled, the youth, or women, as these groups can be targeted for regulation. Focusing on a special group, such as youths, can achieve the intended outcome because the group is easier to monitor and regulate, as they have homogeneous needs and can thus be monitored and regulated.
Finally, the critics fault the basic income program for reducing labor supply. They argue that the financial incentives from the basic income program are making some families and individuals abandon their jobs. For instance, the majority of the 4,000 individuals targeted by the basic income pilot project were already employed when they enrolled (Perkins et al., 2022). However, some abandoned their jobs following their financial incentives from the basic income pilot project.
The group became dependent on the program’s free money, leaving their usual jobs and employment areas. As a result, the labor market and the labor force have been affected by low supply. The majority of low-income earners who were employed and contributed to the labor market ultimately became dependent on government assistance. Additionally, the negative income tax program denied some individuals the opportunity to contribute to the nation’s development through taxation.
Personal Concerns
The concept of basic income, where poor individuals are given free money, does not align with my views on poverty alleviation. Instead of giving free money through a basic income program, I believe in effective, sustainable strategies. For example, instead of giving free money, the government should create job opportunities that enable people to secure employment, earn a living, and become self-reliant (Silver & Zhang, 2022). Generally, poverty is caused by unemployment, which renders some individuals without the means to earn a living and afford their basic needs.
Secondly, instead of providing free money through a basic income program to cushion low-income individuals, the government should set minimum wage limits. Because most poor working families earn too little to afford their basic needs, they continue to live below the poverty line (Silver & Zhang, 2022). A proposed solution is to raise the minimum wage, ensuring that all low-income earners receive a sufficient, sustainable income. This measure would enable them to be self-reliant, thereby reducing their reliance on basic income incentives.
Third, the basic income program, characterized by free money, promotes a culture of dependency, which is worse than poverty. According to the statistics, some beneficiaries of the program have become reliant on financial incentives, thereby abandoning their traditional jobs. The basic income program, therefore, is enhancing dependency, which it should aim to counter (Stevens et al., 2022). By abandoning their job commitments in favor of financial incentives from the basic income program, the poverty level is increasing rather than decreasing.
Implications for Public Policy
Critics argue that the basic income approach hinders effective poverty-alleviation public policy due to its high cost, diverting funds from more sustainable programs. This cost-inefficiency is highlighted by a single basic income pilot project, which cost more than $17 million to serve just 4,000 people over 2 years (Perkins et al., 2022). The large sum could have been channeled to other, more effective, and sustainable programs that can alleviate poverty.
In addition, the basic income program is influencing public policy on poverty alleviation by drawing the government’s attention, which should be channeled into other projects. Even though the project is not sustainable, the Canadian government is placing much emphasis on the program, thereby giving less attention to other public policies that could help alleviate poverty. For instance, the public income pilot project accommodated only 4,000 people despite the significant attention it received (Béland et al., 2022). The government should have used the focus to raise the minimum wage, which could increase household incomes and thus alleviate poverty.
Finally, the concept of a basic income program affects public policy on poverty alleviation by discouraging hard work. While the motivation was to uplift low-income households by warning them about the ravages of poverty, the initiative has since become a demotivator of hard work (Schwartz et al., 2023). Most beneficiaries of the program, who were previously working hard and self-reliant, have become lazy and turned to dependency on the free financial incentives, thus negatively affecting public policy on poverty alleviation.
Political Perspective
Egalitarianism
The basic income program, which provides free money to low-income families to improve their economic status and protect them from extreme poverty, aligns with egalitarianism. Egalitarianism is the belief that all individuals should have equal rights and access to resources.
Popularly known as socialism, this political perspective advocates for equity and a just society in which all members have equal access to resources and rights (Perkin et al., 2022). Similarly, the basic income program advocates for equal economic status by trying to uplift the poor through financial incentives. The policy aims to bridge the economic gap between the poor and the rich by empowering low-income earners and enabling them to afford their basic needs.
How the Perspective Aligns with My Views on Poverty
The socialist perspective on fairness and equal access to resources aligns with my view of poverty and its solution. First, poverty is caused by the uneven distribution of resources and the inequalities caused by social stratifications such as race, gender, and color. This manifests through education, employment opportunities, and remuneration. While the White Canadian majority is enjoying access to employment opportunities and education, the minority communities, such as Blacks and Hispanics, are discriminated against and left behind (Williams et al., 2022).
As a result, the privileged White majorities enrich themselves at the expense of their minority counterparts. To alleviate poverty, access to opportunities such as education and employment should be equal regardless of race, ethnicity, or color. As a result, minority communities will be more competitive in the labor market and earn a living, enabling them to afford their basic needs.
Secondly, the low-income household is primarily attributed to the significant wage and salary inequality among employees. While some individuals earn very little income, which cannot sustain them, others earn vast sums, contributing to the wide economic gap.
To alleviate poverty, the minimum wage must be raised to reduce income inequality among families. One employee should not earn an extremely high salary while others earn very little. Reducing wage inequality will significantly reduce inequality and alleviate poverty among low-income families. The egalitarian political perspective of fairness resonates positively with my views on poverty and its alleviation.
Conclusion
In summary, the basic income program was a Canadian government initiative to support low-income families by providing financial incentives without conditions. Dating back to the early 20th century in Alberta, the basic income program, rooted in values of fairness and equity, has undergone significant changes over time. The program remains highly controversial, with groups divided over its effectiveness and necessity. Critics specifically cite concerns over its high cost, lack of sustainability, and ineffectiveness in poverty alleviation. The political perspective aligned with the program is egalitarianism, which advocates fairness, equal rights, and equal access to resources, all of which help alleviate poverty.
References
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