Former senator Hugh Segal makes his pitch for a $1,320 basic income

The best government solution to poverty might be the simplest one: give money to poor people, no strings attached.

That's the idea behind a basic income pilot program for Ontario. This week, former Conservative Senator Hugh Segal released a discussion paper on how the pilot program should work.

Segal is proposing that people between the ages of 18 to 65, who are living under the low-income poverty line in Ontario, will earn a basic income of at least $1320 per month. Individuals with disabilities will receive $500 more.

Hopefully, this pilot project ... will allow us to free up low-income people's time so that they can make choices about their lives, be better parents, to get on with their lives and look for work and do better than they're doing now.- Hugh Segal

Segal, who's now the Master of Massey College at the University of Toronto, explained his proposal to As it Happens host Carol Off. Here's part of their conversation:

CAROL OFF: Is there a cap? If people start to make more income, at what point do they lose the basic income?

HUGH SEGAL: So, the way we operate now in Ontario, apparently, is that if you are an Ontario Disability Support Program (ODSP) recipient or if you are an Ontario Works (OW) recipient, there's a limit to how much you're allowed to earn. If you earn more than $200 a month, you not only get benefits clawed back, but you may in fact lose some benefits — such as rent-assisted housing and free dental for your children. So, those are huge disincentives for people to break out of welfare and get some work — even when they want to and can.

The proposal for the pilot project is that while there is this minimum that people could depend upon, they would be able to go out and earn as much as they like and the normal tax rates of 20% or 30% would apply. Once they reach an amount where they're earning as much every month as they're getting from the actual basic grant, then they would be taxed like the rest of us who earn enough to live without any assistance.

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CO: You've touched on something that is a major disincentive ... that we've heard many times before. That people want to work. They don't want to be on assistance. Yet, as soon as they do start to work they start losing their subsidized bus pass. They lose so many things and they're in despair. Their daycare disappears...

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HS: And it's the problem that the government is trying to find a way to improve upon by testing a basic income which is not tied to all that conditionality. If you think about it from the point of view of the laws that are now in place, the public servants who work either regionally or in the province for OW or ODSP, they have to make sure that close to 900 rules of eligibility are being met by those who are recipients. And they have a duty to oversee, police, monitor and control. Most of the people who do that kind of work are actually people who are graduates of various social work programs. They don't want to be doing that kind of work.

What would happen during this pilot project is … a lot of the welfare workers ... could actually spend their time working with clients, helping them to get better jobs, better housing, and improve their circumstance.

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I also think that part of the legacy of the old charity laws is that ... those of us who think we're doing fine and our governments, make a series of minute rules about how those who aren't doing so well have to live. In my view, that's the worst kind of discrimination. It assumes that poor people, people on low-incomes can't make rational decisions and shouldn't be allowed to make their own choices. That in my view is a huge mistake.

Hopefully, this pilot project ... will allow us to free up low-income people's time so that they can make choices about their lives, be better parents, and give them a base guarantee which allows them to get on with their lives and look for work and do better than they're doing now.

CO:  You've been in politics long enough to know that this idea of a guaranteed income has been discussed decade after decade … If there is evidence that this might work, why is there such resistance?

HS: I think there are three reasons. First of all, generally speaking, finance officials right across all governments don't like programs that provide an automatic payout because that reduces the discretion of their minister and their cabinet to make spending decisions … Second, is a very strong view that if you pay people to do nothing, they will do nothing, when there's not a scintilla of evidence to back that up ... The third reason — I think this is the one that is perhaps most problematic — is the notion that comes back to our old charity laws that folks who are low-income are guilty of some sort of moral weakness. They are not committed to working. They want to sit on their couch with chocolates and popcorn. There's just no evidence to back that up. 

For more on this story, listen to our full interview with Hugh Segal.