BC Basic Income Panel

Research Papers

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A Note on Single Adult Poverty in British Columbia

David Green (University of British Columbia)

Petit and Tedds (2020) show that single adults without children have notably higher and persistent poverty rates in B.C. than any other demographic group studied. This short note picks up on this finding and investigates the single adult without children group further to try to understand who they are and their sources of income. Using Census data, I find that there are three main groups of single adults living below the poverty line. First are those with earnings over $16,000 who are mainly young females that have completed high school, who tend to work much of the year and who live in the Lower Mainland and Victoria. Second are those who with mostly transfer income who are mostly older males who have not completed high school, who tend not to work and who do not live in the Lower Mainland or Victoria. Third are those who work up to half the year, but otherwise are very heterogenous except they tend to have more social insurance (employment insurance and pension) income and who may be aided by social insurance reform.

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Applying a Basic Income Lens to British Columbia’s Demand-Side Housing Programs

Jonathan Rhys Kesselman (Simon Fraser University), Michael Mendelson (Maytree Foundation)

This paper reviews the reform of BC’s five major demand-side housing programs to conform more closely to basic income principles of autonomy, accessibility, and dignity. The five programs are: social assistance (SA) shelter allowance; Rental Assistance Program; Shelter Assistance for Elderly Renters; Rent-Geared-to-Income and below-market rental housing; and the Home Owner Grant. The paper first proposes making the SA shelter allowance a flat rate amount (varying only by family size) rather than the current “actual rent up to a maximum”; this would increase autonomy for beneficiaries. The paper then proposes a comprehensive reform: replacing all demand-side programs with a consolidated rent supplement program, provisionally called BC Rent Assist. BCRA would pay a benefit to all low-income renters regardless of their SA status based on their previous year’s income and a fraction of median market rents, not their actual rents. BCRA amounts would phase out with income, and thus the scheme would mimic an income-conditioned basic income.

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Basic Income Experimentation Yesterday and Today: Challenges, Achievements, and Lessons

Wayne Simpson (University of Manitoba)

Policy discussion around a basic income is often based on a limited understanding of a vast literature on income maintenance issues that has been compiled over the past half century. In particular, significant social experimentation has tried to understand how a basic income program might be effectively designed and delivered and what its impact might be on the twin objectives of equity and efficiency. Those who wish to promote the concept of a basic income would be well advised to understand what research has been done on income maintenance and how it relates to modern circumstances. And those contemplating basic income pilot projects can learn a great deal from the challenges and accomplishments of fairly ambitious social experimentation conducted in the past. This paper provides an overview of the experiments to assess what we have learned from them, what questions remain unanswered, and what new issues arise in a modern, technologically advanced economy and labour market.

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Basic Income in Canada: Principles and Design Features

Lindsay M. Tedds, Daria Crisan, & Gillian Petit (University of Calgary)

Basic income is not a single, uniform policy, but rather a range of policy proposals that share certain principles while also differing along key dimensions. Based on the extensive literature related to basic income, we conceptualize basic income as a class of policy proposals, all of which share common principles. In this paper, we look at the following questions: what are these generally shared principles and what are the differing dimensions? We highlight that designing any form of a basic income requires making well-thought-out choices with regard to how design elements will achieve specific objectives, and implementing a basic income requires working through a significant number of details.

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Basic Income Simulations for the Province of British Columbia

David Green (University of British Columbia), Jonathan Rhys Kesselman (Simon Fraser University), Lindsay M. Tedds, Daria Crisan, & Gillian Petit (University of Calgary)

An important component of the work to be completed by the British Columbia’s Expert Panel on Basic Income is to design simulations to look at how various basic income (BI) models could work in B.C. (B.C. Poverty Reduction, 2018). The intent of these simulations is to identify the potential impacts and financial implications for B.C. residents of different variants of a BI. Given the poverty reduction targets passed by the B.C. government, detailed in Petit and Tedds (2020d), the potential impacts include those on the incidence and the depths of poverty in the province (B.C. Poverty Reduction, n.d.). The panel ran over 16,000 different BI scenarios to consider in B.C., which were modelled using Statistics Canada’s Social Policy Simulation Database and Model (SPSD/M) program. We evaluate different BI scenarios in terms of their implications for a variety of measures, including cost, number of recipients, rates of poverty, depths of poverty, distributional affects, and inequality impacts. This paper provides details regarding these simulations. Our goal in this paper is simply to consider different versions of a basic income in terms of both their cost implications and their implications for poverty reduction. We believe that identifying the most effective variants of a basic income in terms of these two criteria will help sharpen the conversation about the applicability of a basic income as a policy option for B.C. For the simulations full data set, click here.

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Basic Income, Financial Literacy and Financial Capability: How Do We Get Better Alignment?

Jennifer Robson & Robin Shaban (Carleton University)

In this paper, we describe the levels of financial literacy and financial capability of adults receiving Income Assistance (IA) benefits in British Columbia. We find that, even after controlling for the usual demographic characteristics, IA recipients have significantly lower levels of knowledge (on mainstream financial topics commonly used in tests of financial literacy) and lower levels of capability in some key areas of financial management. This is not evidence that IA clients need to be instructed on budgeting; in fact we find there is no significant difference between IA clients and other adults along this dimension. Instead, we find that IA programs likely inhibit the ability of clients to gain positive experiences in making their own financial decisions. We also draw on results of a survey of voluntary sector organizations that deliver a range of services to low-income clients, including tax-filing clinics, help accessing government benefits, financial coaching or problem-solving, and consumer rights education and advocacy. We find that organizations seem to be playing an important role in helping low-income adults navigate and access public benefits, but that this work is not properly considered in the total cost of current IA programs or other income supports. We also find that the non-profit supply of financial information and advice to low-income clients is likely precarious due to uncertain funding and competing organizational priorities.

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Basic Income: Characteristics Related to Presence in and Absence From the Tax System

David Green, Pablo Gutierez, Kevin Milligan, & Erik Snowberg (University of British Columbia)

One claim advanced for a Basic Income is that it can be administered through the tax system, making it more transparent, easier to access, and less costly to administer than other transfer approaches. Of course, these advantages are lessened to the extent that people do not file taxes. In this paper, we data from a combination of linked Census, tax and death records, data on opioid overdoses, data from BC’s IA system, and data from a survey of residents of Single Room Occupancy hotels in Vancouver to paint a picture of the extent and nature of “falling through the cracks” in the tax and transfer system. We find that between 3 and 6.6% of the Canadian population are not known to the tax system at all. Another group of people are in the tax system records but did not file in a given year. Adding these two groups together, we find that between 11% and 15% of the population are either not in the tax system at all or do not file taxes in a year.
The group who are in the tax records but did not file a T1 in a year are disproportionately non-earners from low income households. Not filing taxes shows considerable persistence across years. Thus, the problems associated with not filing taxes could end up focused on a small core of continual non-filers. The people not in the tax records or Census files at all are very disproportionately likely to have died from a death of despair (suicide, drugs or alcohol related) and to have died in low income neighbourhoods and neighbourhoods with a higher proportion of people who have moved in the previous year. This suggests that this is a vulnerable population. Given that they are missing from both tax related and survey attempts by the government to contact them, they would likely be a particularly difficult group to reach with tax-based social benefits.

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BC Income Assistance Trends and Dynamics: Descriptions and Policy Implications

David Green & Jeffrey Hicks (University of British Columbia), Rebecca Warburton (University of Victoria), William Warburton (Elevate Consulting)

This paper documents various features of B.C. Income Assistance (IA), including durations of spells of IA, how durations differ according to recipient case characteristics, and how durations and case characteristics have changed over time from February 1989 through December 2017, based on official B.C. administrative data. The goal of the paper is to relate these patterns to key policy questions, and so it is framed as a set of main patterns, each followed by a list of policy implications.

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Cash Transfers and Child Outcomes

Lauren Jones (Ohio State University), Mark Stabile (INSEAD)

This paper focuses on the treatment effects of various existing programs around the English-speaking world that transfer money to families with children, either through work-based or unconditional transfers. Work-based programs are those that require labour force participation in order to qualify. Unconditional transfers simply require that children be present in the household. In Canada, the larger benefit programs targeted at families with children have been unconditional in nature. This paper shows that income support programs are an effective tool to promote child well-being. Further, while there are potentially positive gains for most families from this income support, the largest benefits are likely to be found among lower-income families. Even modest child benefits contribute to closing test score gap between the least disadvantaged and most disadvantaged children. The paper concludes that some questions about the efficacy of income supports remain. These include whether more targeted benefits had disproportionately larger effects on test scores, and whether the method benefit delivery within the context of income support programs is an important element of policy design.

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Claims Made For or About a Basic Income

David Green (University of British Columbia)

Basic income has been promoted as an important policy tool for a long list of reasons, ranging from supporting increased entrepreneurial activity to increasing mental health. In this paper, I assess some of the key claims made about the impacts of a basic income: that it is simple to implement by using the tax system; that it reduces the welfare wall, increasing labour supply among IA recipients; that it would increase volunteering and caregiving; that it would improve child well-being, education and development; that it would lead to an increase in entrepreneurship; that it would reduce crime rates; that it would improve health outcomes and reduce health care system costs; and that it would lead to higher wages and better working conditions for low wage workers. I also consider some claims about negative effects, raised by basic income opponents, such as the claim that it would lead to an overall decrease in labour supply in the paid labour market. The assessment is based on the research papers commissioned for British Columbia’s Expert Panel on Basic Income. Overall, some of the claims for positive effects from a basic income receive support from the empirical evidence while others do not but even where there are positive outcomes a basic income is often not the most direct way to achieve the outcome and it is often difficult to determine whether a basic income would be better than income received through other, conditional programs.

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Defining and Describing Energy Poverty in British Columbia: The Distribution of Households’ Energy Expenditure

Blake Shaffer & Jennifer Winter (University of Calgary)

Increasingly stringent environmental policy, such as the current CleanBC plan, has the potential to reduce households’ ability to afford energy services. While Canada has an official poverty line, there is no official measure of energy poverty, which is a correlate of income-related poverty. We examine household energy poverty—the inability of households to afford energy services or maintain adequate living conditions—in British Columbia with several indicators from academic literature using 2017 Survey of Household Spending public-use microdata. The indicators provide different quantitative definitions of energy poverty, and we compare and contrast results across indicators to identify household characteristics common across indicators. Given the significant differences in the results of these energy poverty indicators, we propose a minimum bound for energy poverty in B.C. is the share of households that are identified by multiple indicators. Together, these indicators and aggregate definitions suggest energy poverty in B.C. is most commonly found in households that are low income (particularly those in the lowest income quintile); mostly singles and lone parents; live in single detached, older homes, with a mortgage; and seniors. We conclude with a discussion of existing policy supports to alleviate energy poverty, and discuss the potential distributional consequences of the CleanBC plan.

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Design Choice for Income-Transfer Programs: Structural, Economic, and Operational Aspects

Jonathan Rhys Kesselman (Simon Fraser University)

Income-transfer programs are a key element of social policy to ensure that individuals have a base assured level of income. Their eligibility criteria and how their benefits are structured are critical to their targeting, efficacy, incentives, and cost. This study provides a comprehensive description of the two main genres of transfer programs—income maintenance and earnings supplementation—and their subtypes and reviews the associated structural, economic, and operational aspects for each. Major design choices for each program type are reviewed for their economic and incentive effects, and related empirical literature is reviewed. Trade-offs among the program parameters associated with benefit adequacy, incentive effects, and program cost are assessed, as are the trade-offs among benefit responsiveness, incentive effects, and operational burdens associated with different benefit accounting methods. The study then applies its findings and insights to a broad assessment of implications for income-transfer policy choices in British Columbia.

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Designing a Basic Income: Lessons from the Optimal Tax Literature

Robin Boadway (Queen's University), Katherine Cuff (McMaster University)

The literature on optimal income taxation is vast, and it has grown rapidly in recent years. Our purpose here is to provide a broad overview of the literature and its implications for basic income. We show that the optimal income tax literature prescribes a basic income guarantee as an implicit component of the optimal tax structure. However, little attention is paid to practical tax design and institutional considerations. We briefly discuss such practical matters, including administrative body and structure, benefit reduction rates, federalism, financing, and work incentives.

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Does a Universal Basic Income Reduce Labour Supply for All Groups? Evidence from Canada’s Negative Income Tax Experiment

Chris Riddell (University of Waterloo), Craig Riddell (University of British Columbia)

We investigate the labour supply effects of the Canadian negative income tax (NIT) experiment known as MINCOME. The North American NIT experiments have received considerable attention in recent years given the renewed interest in a universal basic income. However, while many papers exist on the U.S. NITs, the Canadian NIT experimental literature consists of a single study. We are unable to replaicate the results of that study and question the validity of its conclusions. Our reassessment yields very different results compared to what is currently believed about MINCOME’s labour supply impacts. We find large and statistically significant adverse effects on labour supply for women from two-headed households, but no compelling evidence of a movement out of the labour force. Our point estimates on hours worked for this group are similar to those found in the Seattle-Denver NIT study that offered more generous treatment plans, and the reduction is higher relative to baseline annual hours than U.S. NIT evidence. Conversely, for single parents (90% single mothers) we find large positive treatment effects on hours worked and on the likelihood of working. The single-parent results, which are robust to two different data sources and differences in sample construction, differ from previous NIT evidence in both countries, although are consistent with standard labour supply theory. Finally, we find no significant impact on either the intensive or extensive margin for men in two-headed families. Overall, our results for the Canadian experiment suggest that the guaranteed income benefit reduced hours for women from two-headed households and increased both movement into the labour force as well as hours worked for single parents—impacts that indicate a guaranteed income with NIT features can have offsetting positive and negative work incentive effects.

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Earnings Supplementation for British Columbia: Pros, Cons, and Structure

Gillian Petit (University of Calgary), Jonathan Rhys Kesselman (Simon Fraser University)

This paper provides background on key issues for the reform of earnings supplement (ES) programs in B.C.: motivation, policy history, and structure of existing and potential provisions. ES programs offer benefits that are linked to an individual’s earnings, as distinguished from programs that offer cash transfers that are unconditional on work or earnings. Thus, the motivations for the ES benefit structure are related to views about reciprocity, self-respect, and social participation and contribution. As a consequence, ES programs have garnered wide support across the political spectrum. The paper describes the ES benefit structure, its parameters, and its operational aspects. The federal Canada Workers Benefit (CWB) is the only ES program currently available for B.C. residents. Options for reform or enhancement of the CWB for B.C. workers are surveyed and assessed at a qualitative level: cost-free reconfiguration of the CWB, provincial top-ups to the CWB, and the institution of a B.C. scheme funded and operated by the province.

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Evaluating the Canada Child Benefit

Michael Baker & Kory Kroft (University of Toronto), Mark Stabile (INSEAD)

While poverty afflicts many demographic groups, child poverty is typically viewed with particular concern. In response, governments in many countries have designed social programs to provide resources to families with young children. These take various forms including targeted means-tested cash transfers, in-kind transfers, vouchers for services, or services themselves. Which of these alternatives is the most successful at reducing child poverty while at the same time being affordable remains an open question. This paper attempts to answer this question by examining the effect of the introduction of the Canada Child Benefit (CCB) on child poverty and family labour supply. Our analysis indicates that there was a decline in poverty, with much of the relative decline being confined to a reduction in the poverty rate of single mothers. However, this appears to be due to an increase in poverty in single women without children. We find no evidence of a labour supply response to either of the program reforms on either the extensive or intensive margin.

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Evaluating the Existing Basic Income Simulation Literature

Lindsay M. Tedds & Daria Crisan (University of Calgary)

This paper delves into the academic literature that exists that models, in detail, specific basic incomes for Canada to understand what main proposals already exist in the literature. This information will help inform the work of B.C.’s Expert Panel on Basic Income in two ways. First, it will inform the panel as to what program designs and choice elements should be considered specifically for B.C. Second, it will highlight for the panel the basic income implementation challenges raised by the choices among basic income design elements that are not addressed by the existing literature, and these would need to be solved in designing and implementing a basic income. In many cases, addressing these challenges may require any basic income policy proposal to be redesigned along the way. This paper does not provide a technical critique of this literature, which is taken up by other work.

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Financial Inclusion in British Columbia: Evaluating the Role of Fintech

Ryan Clements (University of Calgary)

Financial technology (fintech) can help to mitigate the problem of financial exclusion in British Columbia. Individuals who participate in the traditional banking and financial system experience a variety of social and economic benefits. Yet several factors like personal hardship, financial illiteracy, high product costs, perceived eligibility, informational gaps, a lack of credit history and legal documents, bank resistance, and customer feelings of distrust and disrespect contribute to the exclusion of many from traditional financial products and services. People who are “unbanked” and “underbanked” often turn to high-cost (even predatory) substitutes like payday lenders, rent-to-own firms, cheque-cashing services, and pawn shops. This paper illustrates how some fintech innovations—highlighting numerous companies operating in British Columbia, Canada, and internationally—can benefit people who are unbanked and underbanked as an alternative to “fringe” banking. Fintech is not, however, a panacea for those excluded, marginalized, or underserved by traditional financial firms, and there are several implementation barriers and integration risks in this market development. This paper provides seven key policy recommendations to help maximize the inclusionary benefits of fintech in British Columbia while mitigating its potential risks.

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Financing the Future: Options for Long-Run Debt and Spending Sustainability in British Columbia

Trevor Tombe (University of Calgary)

British Columbia’s economy and finances have been strong in recent years. But an aging population and declining real-estate activity may, over the medium and long run, create pressures that current policy is not well equipped to handle. This paper estimates the long-run fiscal situation for the province and finds the status quo unsustainable. Revenue growth lags behind both the overall economy and program spending. The gap between spending and revenue will, over time, lead to unsustainable debt levels. Immediate and permanent increases in revenue or decreases in spending on the order of 3% of GDP are necessary to ensure that B.C.’s debt-to-GDP ratio does not grow without bound. This is equivalent to increasing sales taxes by 8 percentage points or decreasing program spending by nearly 17%. Roughly half the long-run gap between projected revenue and spending is due to slow revenue growth and the other half due to rising health expenditures. Though status quo policy is unsustainable, a wide variety of policy responses are available. This report explores several long-run fiscal scenarios to examine the challenges facing the province, the wide variety of policy responses, and the scope for new large-scale spending initiatives like a basic income program. Gradual changes made today will not only ensure fiscal sustainability but also allow the province to consider expanding social spending programs in a responsible manner.

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Gender-Based Analysis Plus (GBA+) and Intersectionality: Overview, an Enhanced Framework, and a British Columbia Case Study

Anna Cameron & Lindsay M. Tedds (University of Calgary)

In this paper, we present an overview of GBA+ and its central components, as well as a case study application of the framework to the question of poverty in the British Columbia context. We begin by tracing the theoretical foundations and development of SWC’s GBA+ tool, touching on the relevance of the framework given broader government goals of diversity, inclusion, and inclusive growth. Next, we consider the limitations and potential of GBA+ as operationalized in Canada, and then build on this analysis to adjust the existing GBA+ tool, with the goals of better incorporating the concept of intersectionality and rendering the framework useful beyond governmental contexts. Finally, we apply relevant elements of the adapted framework in a case study, examining the issue of poverty in B.C. from a gendered and intersectional perspective. Our main finding is that exploring the nature and causes of poverty in B.C. results in a harrowing picture, both of need and oppression, and one that government systems have been complicit in constructing. As a result, the BC Government will need to implement GBA+ frameworks within a context that includes broader reconsiderations of government process, structures, institutions, and norms, with an aim to remove discrimination and bias (e.g., heteronormativity, colonialism, misogyny, ableism). Ultimately, an understanding of both the broad context of systemic pathologies and the barriers associated with intersecting identity factors and social positions that shape individual experiences will be integral for analysts hoping to advance agendas of diversity, inclusion, and poverty reduction, particularly through the development of public policy.

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Gender-Based Analysis Plus (GBA+) of the Current System of Income and Social Supports in British Columbia

Gillian Petit & Lindsay M. Tedds (University of Calgary)

This paper is one of three papers focused on bringing a GBA+ lens to the work of the Expert Panel on Basic Income. In Cameron and Tedds (2020b), background is provided on gender and intersectional analysis and an enhanced GBA+ framework is developed based on the Status of Women Canada’s GBA+ tool. In Cameron and Tedds (2020a), a GBA+ analysis is applied to two policy reforms—basic income and basic services—to consider their potential in the context of B.C.’s poverty reduction strategy. In this paper, we apply the enhanced GBA+ analysis to the current system of income and social supports in B.C. along with the suite of proposed reforms recommended in Petit and Tedds (2020d, 2020e) using BI principles. Both of these—BI principles and GBA+/intersectionality—have transformative potential. Applying a GBA+ lens along with BI principles illuminates ways we can address structural barriers such as institutional and systemic discrimination, reducing the risk of poverty among diverse groups and promoting long-term transformative change.

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Gender-Based Analysis Plus (GBA+) of Two Policy Alternatives: Basic Income and Basic Services

Anna Cameron & Lindsay M. Tedds (University of Calgary)

In this paper, we apply GBA+ to two potentially transformative policy approaches—basic income and basic services—to consider their promise in the context of B.C.’s poverty reduction strategy. The core of our analysis is centred on evaluating how each proposal might address poverty in B.C. along intersectional lines, and according to the key dimensions or principles of poverty mitigation and prevention outlined by the B.C. government in its poverty reduction strategy: affordability, opportunity, reconciliation, and social. We also draw on insights regarding the systemic barriers that contribute to greater risk and prevalence of poverty for people whose identities are situated at various axes of difference. We not only consider how the proposals may produce “tangible” outcomes, but also focus on the various ways in which they could transform experiences within and beyond the system of programs, or erect barriers that are not immediately obvious or that may not exist for a “neutral” subject. We demonstrate that the basic income and basic services approaches both have immediate practical value, as well as exhibiting transformative potential, though such impacts largely hinge on how the policies are envisioned and implemented. The most important takeaways from this work are that intersectional groups need access to high-quality public services and, relatedly, that any policy approach that “trades off” services for income will have potentially devastating impacts—particularly for already vulnerable groups.

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Government-Sponsored Training and Employment Programs: Actively Serving Those Near a Basic Income Threshold in British Columbia

Arthur Sweetman (McMaster University)

Current government-sponsored adult employment and training programs for disadvantaged individuals are seen to have positive and economically important rates of return with respect to participant labour market outcomes. A basic income is argued to be a complement, not a substitute, for such programs. This is because most basic income programs are designed to be fundamentally passive, but the argument made here is that high-quality active labour market program (ALMP) management is fundamentally active. Canada has a long tradition of tied benefits associated with learning (e.g., aside from well-established student loans and grants programs, free child care during language training and funds for transportation costs to attend training provided for new government-assisted refugees during language training in addition to the government providing a basic income to such individuals immediately after arrival), and there appears to be good reason for these directed expenditures. Indeed, the federal government is increasing its activity in this area for adult learners with new programs such as Skills Boost. The design of a basic income program should complement such targeted learning initiatives. Delivering programs that foster human capital development will hopefully increase participant productivity so that they earn more than a “basic” income.

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Homelessness and Poverty in British Columbia

Ron Kneebone (University of Calgary)

A minimum goal of a basic income is to ensure all Canadians can maintain housing and in so doing avoid homelessness. This paper examines the causes of homelessness to gain insight into whether a basic income can reduce it and, if so, to what extent. Poverty is the main driver of homelessness, as a result, a basic income may also have a positive effect on the homeless rate by better enabling people to avoid the other circumstances that contribute to homelessness, particularly addiction and mental health issues.

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How and When to Pay? Income Assistance (or Basic Income) as a System of Financial Transcations and Services

Jennifer Robson & Robin Shaban (Carleton University)

In this paper, we consider how the provincial Income Assistance (IA) program works as a financial system to pay benefits and provide some guidance on financial matters to clients. In addition to important questions about who qualifies for support and how adequate the support is, we argue that how and when clients receive their income payments is also critically important, particularly if imagining a change to current systems in a transition to a basic income. We draw on administrative data from the province of British Columbia to look at lump-sum adjustments to benefit amounts, friction in transactions, and volatility in monthly income benefit amounts. We also draw on information from the United Kingdom’s experience in consolidating several benefits into the single Universal Credit program, again with a focus on how and when benefits are paid as determinants of the financial well-being of beneficiaries.

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How Did the Canada Child Benefit Affect Household Spending?

Paniz Najjarrezaparast & Krishna Pendakur (Simon Fraser University)

In this study, we assess how the increase in the Canada Child Benefit (CCB) in July 2016 affected household spending on various types of consumption. The increase was more than $2,000 per child per year for most recipient households, so it represented a very large increase in transfers to households with children. Further, because the CCB has a very low tax-back rate, the policy change was similar to raising the rate in a universal basic income scheme. We assess the effect of the policy change on a measure of overall consumption, and its seven constituent categories: clothing, food, health care, household operation, recreation, shelter, and transportation. We focus on households whose income is below the median income (as this is the principal policy target), and evaluate effects for renters and owners separately. We find statistically significant effects of the policy change only for spending on clothing, food, and shelter, and these arise only for rental-tenure households. We find that rental-tenure households with children below the median income increased their annual consumption by roughly $3,000 in response to the CCB increase of roughly $4,300 for these households. With average annual consumption around $30,000, this represents an increase in consumption of roughly 10% for these households. They increased spending on food by roughly $700, and on shelter by nearly $1,400. They increased spending on clothing by roughly $300, but only on children’s clothing and not on adult clothing. We find mild evidence that households with more children responded differently to those with fewer children, in particular, that shelter spending rose by much more for the former households. That the policy changed increased spending on the necessities of food, shelter, and clothing suggests that it achieved some measure of success in improving the consumption of lower-income households with children. The lion’s share of the increased spending was allocated to increased shelter spending for rental-tenure households. We find weak evidence that these households moved after the policy change. But given the existing evidence that low-income housing supply may be quite inelastic, it is possible that rent price increases ate up this increased spending. More research on this question, using different data, is needed.

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In-Kind Versus Cash Benefits in Social Programs: Choices, Structures, and Delivery

Jonathan Rhys Kesselman (Simon Fraser University), Michael Mendelson (Maytree Foundation)

In designing social programs, benefits can often be either in the form of unrestricted cash transfers or in-kind goods and services; and if in kind, the benefits can be structured and delivered in various ways. This paper assesses how these program design choices relate to policy objectives, characteristics of the good or service, individual autonomy, human rights and dignity, and social externalities. Also relevant are the characteristics and preferences of both beneficiaries and funders of programs. For many types of policy objectives and sets of values, unrestricted cash transfers cannot substitute for benefits provided in kind. The paper evaluates the issues in relation to specific types of “target” items for in-kind benefits and analyzes the use of alternative benefit structures. Relative advantages of alternative delivery modes—on the demand or supply side and through tax incentives, subsidies, vouchers, public agencies, or NGOs—are assessed. The preceding material presents a basis for comparing basic income versus basic services and for analysis and reform proposals relating to specific provisions in British Columbia’s income and social support system. The paper’s analysis and discussion will also have relevance for policies in other jurisdictions.

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Income Assistance in British Columbia: Reforms Along Basic Income Lines

Gillian Petit & Lindsay M. Tedds (University of Calgary)

IA is the Government of British Columbia’s largest income assistance program, with an annual cost of just over $2B and reaching more than 8% of households. It is a program that is very complex to access and has complex eligibility rules and design features. It is also associated with a large amount of stigma and does not foster the financial stability and financial security of its clients. IA is also a poor tool to support those who engage in vital unpaid work (e.g., child care; caregiving for ill, disabled, or elderly family members; volunteering), not only because of the stigma associated with the program but also because the benefit levels are inadequate. The purpose of this paper is to put the IA program through the lens of BI principles to recommend reforms that would move IA closer to BI principles and away from being a “funder of last resort.” Taken together, reforms based on BI principles should make IA a more inclusive program that recognizes the worth of all people. These reforms will also help reduce income poverty rates and poverty depths, preventing poverty, and help those caught in or about to be caught in a poverty trap.

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Income Support and the Affordability of Housing in British Columbia

Ron Kneebone & Margarita Wilkins (University of Calgary)

In this report we show how current levels of income support in British Columbia are often inadequate for people with very low incomes to maintain housing. We show, however, that this has not always been the case, it is not always the case in all communities, and it is not always the case for all family compositions. This variety of outcomes is due to housing costs varying widely across communities while income support payments are the same regardless of where one lives in the province and due to differences in income support provided to families of different size and composition. The result is a patchwork where maintaining housing is extremely difficult for some family compositions in some communities but far easier for other family compositions or in other communities. We propose a way of modifying how income support is provided so that housing affordability can be improved and maintained over time as housing costs change.

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Interactions Between Income and Social Support Programs in B.C.

Gillian Petit & Lindsay M. Tedds (University of Calgary)

This paper examines the system of income and social supports available to B.C. residents and how programs interact with each other. We observe that programs can interact through “eligibility interactions” and “benefit interactions”; that is, one program can affect eligibility for another program and benefits from one program can affect benefits from another program. We look in depth at both the disability tax credit and provincial social assistance and how these programs act as “gateway programs” for other programs: access issues to these gateway programs can limit access to other programs. We also examine the interaction between provincial social assistance and the Rental Assistance Program, both which provide a housing supplement to low-income B.C. residents; however, receipt of one precludes the receipt of the other. For a person deciding between these programs, knowing which program makes a person better off is complicated. Finally, we look at how receipt of the Seniors Bus Pass affects the level of other tax-delivered benefits, and how receiving provincial social assistance benefits affects receipt of the Canada Workers Benefit: for both, the receipt of one benefit reduces the other benefit level raising the question of whether this was intentional. These interaction effects have implications for how reforms should be approached. Reforms to programs are often approached as reforms to individual programs; however, they should be approached with the entire system in mind.

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Labour Supply Issues Related to a Basic Income and Income Assistance

David Green (University of British Columbia)

In this paper, I assess the various claims made about how a basic income (BI) would affect paid work. Proponents of a BI argue that a BI would reduce the welfare wall and make it easier for people with low income to choose to work. Opponents tend to be concerned that a BI could induce a large-scale withdrawal from paid work and/or a reduction in the hours that people work with potentially problematic consequences for the productivity of the economy.

In the first section, I discussion of the theoretical issues related to a BI and work, pointing out that both proponents and opponents could be right in different ways at the same time. In that discussion, it also becomes evident that the extent of expected effects hinge critically on the impacts of a switch to a BI on the effective tax rates that people face. In the second section, I review the evidence from Milligan (2020) on the size and relevance of these tax rates. This highlights the extent of the problem and where we expect to see effects. However, the ultimate impacts on labour supply depend on how people react to the changes in effective tax rates. Those reactions show up in estimates of labour supply elasticities. In the third section, I review evidence on those elasticities. The labour supply estimates obtained from a variety of sources tend to point to quite low elasticities for both men and women in recent years (i.e., both would show only modest responses to wage and income changes associated with introducing a BI).

I use the labour supply elasticity estimates in combination with data from the 2016 Census to form estimates of effects of a basic income with a $20,000 guarantee and a 50% tax back rate. I do this in two exercises: one focused on those on IA for whom the basic income would lower the welfare wall; and one focused on workers.

Overall, based on estimates in various related literatures and an exercise using those estimates in conjunction with census data for B.C., a shift to a generous basic income scheme would likely have limited impacts on total hours worked in the economy. It would also likely have small effects in drawing IA recipients into work through lowering the welfare wall. At the same time, there are some groups—notably those without children—for whom predicted hours reductions are somewhat larger. Concerns for those groups could be mitigated by implementing a wage or earnings subsidy in conjunction with the basic income. But the key conclusion is that hours impacts are likely not large enough for them to be the main factor in deciding on whether to adopt a basic income.

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Overview of System of Income and Social Support Programs in British Columbia

Gillian Petit & Lindsay M. Tedds (University of Calgary)

We provide a systems-based overview of all income and social support programs provided by federal, provincial, and municipal governments that can be accessed by B.C. residents. We find that there are a number of areas for reform: the B.C. system of income and social supports is large and complex with different points of access for different programs and different programs having different eligibility rules. This makes accessing programs difficult. Furthermore, for programs that offer cash transfers, total benefit levels are low comparative to the MBM poverty Threshold, making it difficult for those experiencing poverty to exit poverty. Whether these issues of complexity, access, and benefit levels can be better addressed by a basic income is a question that should be considered. On the other hand, we also observe that, when comparing provincial programs to federal programs, the provincial and federal governments target different demographic groups and use different methods of delivery: the provincial government programs are largely in-kind programs targeted to low-income persons whereas the federal government programs are largely cash transfer programs targeted to families, veterans, and seniors. In-kind programs offered by the provincial government offer valuable supports for purposes and groups not otherwise targeted by federal government programs. Whether these in-kind programs should be replaced by a basic income is also an important question that will need to be considered.

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Participation Tax Rates in British Columbia

Kevin Milligan (University of British Columbia)

This paper defines, describes, and demonstrates the effective tax rates for British Columbia’s system of income supports. The scope of the analysis includes federal and provincial income taxes, refundable and non-refundable tax credits, and Income Assistance provided by the B.C. government. The analysis combines different elements incrementally to show how the pieces interact to create the net effective tax rates that matter for assessing work incentives. Because income supports are targeted at lower-income citizens, the analysis focuses mostly on those at low-income levels.

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Policy Design, Cost Information and Support for Guaranteed Income

Richard Johnston, Sarah Lachance, Alan Jacobs (University of British Columbia)

This report presents the results of two studies on support for guaranteed income using survey experiments conducted on British Columbia voters. In the first, we test the effect of different policy designs that vary on characteristics like benefit type and eligibility. In the second, we select the two policy designs with the highest support in Study 1 and we test the effect of providing information about their cost on support. In each study, the heart of our analysis rests on random assignment of survey respondents to alternative renderings of the policy. We also look at the impact of demographic variables, in particular income and education, both for overall support and for their interaction with our experimental variables.

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Poverty in British Columbia: Income Thresholds, Trends, Rates, and Depths of Poverty

Gillian Petit & Lindsay M. Tedds (University of Calgary)

We present and assess extensive statistics regarding poverty rates and depths for Vancouver, B.C., and Canada. We show that not only are single adults in B.C. the most likely to experience poverty, but they also experience the deepest level of poverty. Both single adults and single parents who are younger (i.e., ages 18–24) are more likely to be in poverty and are deeper in poverty than single older persons (i.e., 65+) or those who live as couples. These poverty rates and depths of poverty remain high for single adults and single parents as they get older (i.e., ages 26–65), at which point the depth of poverty decreases. Lastly, poverty tends to be experienced at higher levels by women than by men when conditioning on family type. For these reasons, B.C. government will have to consider these groups in reforms focused on addressing poverty reduction targets.

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Programs-Based Overview of Income and Social Support Programs for Working-Age Persons in British Columbia

Gillian Petit & Lindsay M. Tedds (University of Calgary)

In this paper, we conduct a deep-dive into federal and provincial income and support programs available to B.C. residents. We look at individual program requirements and gaps between programs. Focusing on cash transfers, we examine how programs align with basic income principles of simplicity, respect, economic stability, and social inclusion, finding that programs delivered through the tax system are more closely aligned with basic income principles than provincial social assistance; however, social assistance plays a large role in the income and social support system. We also examine the ability of cash transfer programs and programs intended to provide support in a crisis offered in B.C. to address income poverty, both rates and depths, as well as poverty cycles.

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Recent Political Manifesto Commitments to Basic Income in Canada

Lindsay M. Tedds & Daria Crisan (University of Calgary)

We detail the political party commitments of a basic income in Canada over the last decade, a period of time in which we have seen renewed conversations about a basic income in Canada. We find that in all but one case the policy commitments lack any detail about design choices and no commitments to a basic income reference the principles of a basic income. Overall, at the political level there continues to be a lot of detail that have yet to be mapped out, detail that is important to understanding the specific commitment and whether the stated objectives could be achieved with the form of basic income proposed. In addition, the implementation of key technical elements seems poorly understood. These existing political commitments provide limited information that B.C.’s Expert Panel on Basic Income can use to inform any design decisions. This is unfortunate, as the policy debates on a basic income are unlikely to move forward in any definitive fashion without the details being flushed out.

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Reform of Child Benefits for British Columbians

Jonathan Rhys Kesselman (Simon Fraser University)

Since its pioneering introduction of the B.C. Family Bonus in 1996, by 2020 British Columbia went from being the leader to the laggard among Canadian provinces in its child benefit program. Only with its implementation of the B.C. Child Opportunity Benefit in late 2020 did the province renovate its scheme, which is still less targeted on poverty reduction than the other provincial child benefit programs. This paper explores alternative scenarios for B.C. to restructure its child benefits so as to target poverty much more effectively. It explores variants that would be cost-neutral, save costs, and expand costs. One of the cost-neutral alternatives could increase the maximum annual benefit per child by nearly half—to $2,355 from $1,600 for the first child in a family. Its benefits would go disproportionately to sole-parent families on account of their high poverty rates. A reform of this genre would also allow B.C. to take the last step in “getting the kids off welfare” by restructuring Income Assistance rates. The paper further explores the even greater potential for relieving poverty among B.C. families by obtaining discretion for cost-neutral increased income targeting of the much larger Canada Child Benefit program.

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Reforms to Earnings Supplement Programs in British Columbia: Making Work Pay for Low-Income Workers

Gillian Petit (University of Calgary), Jonathan Rhys Kesselman (Simon Fraser University)

Some individuals work nearly full-time and most-year at low wages but remain poor. An effective way to assist the “working poor” is to supplement their earnings, which lifts them from poverty by rewarding their work. This paper explores how an earnings supplement program for British Columbia could serve this goal. Through quantitative simulations we explore alternative approaches, such as a cost-neutral reconfiguration of the federal Canada Workers Benefit and a provincial top-up to the CWB. These exercises provide insight into the trade-offs in benefits, costs, and poverty impacts of varying the structure and parameters of programs focused on B.C. We find that a cost-neutral reconfiguration of the CWB for B.C. has limited impact on poverty rates for childless singles, while increasing poverty rates for other family types. In contrast, a combination of CWB reconfiguration with a provincial CWB top-up targeted at low-earning childless single workers could significantly improve outcomes for that group. At a cost to the province of $400 million, this scheme could reduce the numbers of such workers in poverty by 18,000 while raising the incomes of many more of the working poor. Such a program could be administered simply by the Canada Revenue Agency as an add-on to the CWB.

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Self-Employment and British Columbia’s Poverty Reduction Strategy

John Lester (University of Calgary)

The main purpose of this paper is to assess whether self-employment raises any special issues for B.C.’s poverty reduction strategy. While the incidence of low income is higher in self-employment than in paid work, the underlying causes of low-income are similar for both types of work arrangements, so initiatives targeted at the self-employed are not necessary. However, the self-employed do not appear to be as well served as paid workers by existing active labour market policies. Self-employment does not have any substantial advantage over paid work as a pathway out of poverty, so a policy tilt in favour of self-employment is not warranted for that reason. However, since self-employment is a last-resort option for some, reducing barriers to entry would have a favourable effect on poverty. The increase in the minimum wage will, even in the best of circumstances, reduce total hours worked in the low-wage sector. This is likely to increase the propensity to enter self-employment, which would put downward pressure on earnings relative to paid workers. This paper also assesses how a Basic Income Guarantee (BIG) would affect self-employment. Implementation of a BIG is likely to result, all else being equal, in a lower level of necessity-driven self-employment. The impact on opportunity-driven entry is likely to be small, and it could be negative or positive. Implementing a BIG is therefore unlikely to make a substantial contribution to preparing for a new or emerging economy by encouraging entrepreneurship.

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Systems-Level Reforms to B.C.’s Income and Social Support Programs Along Basic Income Lines

Gillian Petit & Lindsay M. Tedds (University of Calgary)

B.C. residents are offered a large, complex web of income and social support programs. Those programs tend to be difficult to access, difficult to understand, and difficult to navigate, and are much more a collection of disparate programs than a cohesive and consistent system targeting an overriding objective. As a result, many potentially eligible persons do not apply for programs they might be eligible for, due to a lack of knowledge or a lack of time and energy; many of these potentially eligible persons are already dealing with other complex and stressful situations, such as searching for employment and/or dealing with medical conditions. The purpose of this paper is to consider whether system-level reforms to B.C.’s income and social supports could make the system more consistent with BI principles (detailed below). This would be a first step toward a more complete contemplation of a BI. This paper focuses on reforms that would apply across the whole system. Petit and Tedds (2020a) detail reforms to B.C.’s biggest income support program: Income Assistance (IA).

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Trends in the Labour Market and Their Implications for a Basic Income: Short Summary

David Green (University of British Columbia)

One of the main arguments that has been advanced in favour of a basic income is that we are going through a technology-driven transition that involves more precarious work and that will end with our economy having either very little paid work as we know it or having a preponderance of precarious jobs (low wage, low stability, low worker control). If that is the case, it is argued, then we need to look for ways to redistribute the production of the economy that is not related to work – either directly, through wages, or indirectly, through work related benefits such as employment insurance. In this paper, I investigate this claim using both empirical evidence and an appeal to economic theory. I examine trends in work elements that characterize precarious work, such as the proportion of work that is part time, short tenure, or in self-employment as well as work arrangements that relate to worker control over their workplace, such as unionization rates and the proportion of employment in sectors characterized by “fissured” work. In addition, I examine patterns of employment, polarization, inequality, and changes in the share of income going to labour. A picture emerges from these investigations of a labour market in which the precariousness of jobs increased in the 1980s and early 1990s while elements of work that relate to worker control and respect such as unionization follow a declining path that continues until the mid-2000s. In a similar vein, the theoretical discussions point to a plausible future with increased inequality. Thus the right question appears not to be, is the basic income the right tool for a jobless future? but, is it the right tool for a persistent set of problems reaching back well into the past?

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User Experiences of the System: A Qualitative Analysis of the Access Issues Encountered by Clients of the British Columbia Social Assistance System

Sarah Hertz, Robin Gray, & Myles Leslie (University of Calgary)

This paper contributes an analysis of user experiences of the British Columbia Social Assistance System (BCSAS) to current debates on whether a basic income (BI) is a viable policy alternative to either the status quo or incremental changes to the status quo. Grounded in the assumption that all policy change occurs within existing frameworks, we analyze public consultation data gathered during the Government of British Columbia’s (B.C.) province-wide Poverty Reduction Initiative (PRI). From this analysis, we describe a range of front-end and mid-stream barriers to the effective functioning of the BCSAS. The front-end barriers we describe are those that impede users’ access to the system, and the mid-stream barriers are those that prevent the system from achieving its intended goals. By foregrounding users’ experiences, this paper expands on previous studies of accessibility and effectiveness issues in the B.C. system and offers policy recommendations for improvement. As such, the aim of our eight recommendations regarding the front-end and mid-stream barriers is to ensure access to the system while meeting the intended goal of cultivating resilience and self-sufficiency in users.

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