Hugh Segal talks about Guaranteed Basic Income at AGM

Sep 23, 2020

Hugh Segal has credentials in Conservative circles that few can match. He worked as the Principle Secretary for long serving Ontario Premier Bill Davis in the1970’s, and he was the Chief of staff under Prime Minister Brian Mulroney in the 1980’s. It was a Liberal Prime Minister however, Paul Martin, who appointed him to the Senate in 2005.

When the moniker “red tory” is used, his name usually comes up.

For many years, however, he has been a vocal and persistent voice for an idea that is often seen as a left-wing concept, a Guaranteed Basic Income.

For him, the fact that 3.5 million Canadians, about 10% of the population, live in poverty, is not only a national disgrace, it is also a waste of human capital. The best way to address poverty in Canada, he has argued for decades now, would be to establish a national guaranteed basic income.

The idea has been gaining traction in recent months. The Canadian Emergency Response Benefit (CERB) payments of $2,000 a month to workers thrown out of work by the COVID-19 pandemic has been likened to a Guaranteed Basic Income (GBI). The leader of the New Democratic Party, Jagmeet Singh, has called for “immediate direct help” for Canadians in the form of a GBI. And the membership of the Liberal Party of Canada has made the GBI their number one priority in the upcoming policy convention.

It was under this backdrop that Hugh Segal delivered an address to the (mostly) Zoom based Annual General Meeting of Southern Frontenac Community Services earlier this month.

In discussing the pandemic, Segal, who lives in Kingston, pointed out how “fortunate we have been in Kingston during this pandemic period. Our health unit and the people working in long term care have a remarkable record. And it is not just a roll of the dice that we are doing so well, it is because people have been working very hard. Simple decisions, like sending inspectors to long term care homes when the restaurants closed, have had a remarkable effect.”

He then got the business end of his address.

“One thing has emerged as a clear, sad fact that we need to reflect on. Low income people, welfare recipients and the urban poor, have paid a much higher price than the rest of us, with more infections and more serious illness than the rest of the population.”

He said no one should be surprised by this.

“We have known for decades. The evidence is broad-based and empirical and very deep, that people who live under the poverty line make the most extensive use of the healthcare system, and the vast majority have some problem associated with chronic illness and have nowhere to go for treatment.”

He talked about the $1007 sandwich, his illustrative anecdote about this issue.

“A friend told me about a low income patient who arrived at the emergency room in a hospital. After talking to and examining him, the nurses and doctors came to the conclusion that what he needed most was some soup and a sandwich, which they provided for him. The food cost $7, but the visit to the emergency room cost $1,000.”

The two Canadian pilot projects studying the impact of the GBI on a test population were showing encouraging results, both were halted before the results could be verified over a longer study period. The most recent was in Ontario. It was brought in by the Liberal Wynne government late in their mandate and was quickly cut when Doug Ford and the Progressive Conservative Party took power in 2018. An earlier study in Dauphin, Manitoba in the 1970’s suffered a similar fate when the government changed hands.

But Segal said that two current nationwide programs demonstrate the benefits, the Canada Child Benefit and the Old Age Security Benefit for those over 65.

“For families without children or for single people between 18 and 64 the situation is dire because welfare systems are bureaucratic and very narrow. An average single female recipient in Toronto receives less than seven hundred dollars per month from Ontario Works, and if she earns more than a couple of hundred bucks the system will tax her back dollar for dollar, that is 100% tax on someone who is making half the poverty line. The richest people in Canada don’t pay that kind of tax.”

He said that the cost of a national program has been costed out by the parliamentary budget officer at $70 billion annually, but the $30 billion per year that provinces pay into welfare programs would be eliminate, so the net cost would be $40 billion.

“That is about 10% of the $400 billion that the federal government spends in a non-covid year, to reduce and eliminate poverty entirely. Failure of the federal government to do this is a simple dereliction of duty. Taxpayers have a right to expect better.”

One of the most often raised arguments against and Guaranteed Basic Income is that it encourages people to stay home and not work.

Hugh Segal said that the evidence from the pilot study in Manitoba was that only two groups showed up a little less for work, new mothers and young men, but the number of men who went back to finish high school shot up.

“Also, 70% of the people living below the poverty line in Canada right now are working, many at more than own jobs,” he said.

“I worry more about money that is hidden away in tax havens by very rich people than I do about low-income people sending money on booze and dope and cigarettes.”

Finally, he addressed a point made by the Canadian Federation of Small Business that because of CERB people were unwilling to go back to work.

“My response is that maybe if you would pay them more to begin with, they would be rushing back to work,” he said.

Hugh Segall was introduced by former SFCS board member Duncan Sinclair, who said that one of the things he regrets about Canadian politics was that Hugh Segall was not successful when he ran for the leadership of the Progressive Conservative Party and Bob Rae was not successful when he ran for the leadership of the Liberal Party, “because if they ever contested an election against each other it would have been really entertaining.”