How a guaranteed annual income could put food banks out of business

December 20, 2013

New poverty reduction strategy calls for guaranteed income for more than just seniors

Guaranteed annual income programs for seniors are a policy success story for Canada as it boasts one of the world’s lowest poverty rates among the elderly. A new report funded by the Canadian Institutes of Health Research and released by The School of Public Policy recommends these programs be extended to a much larger age group.

“The government could go a lot further toward the reduction of poverty in Canada by building on the success of its income supports for seniors, and making them available to poor Canadians of all ages,” authors Herb Emery, Valerie Fleisch and Lynn McIntyre write.

Of course, this move would be a reversal in policy given that the federal government is currently phasing in a plan to raise the age of eligibility for Old Age Security from 65 to 67.

Using food insecurity (lack of access to adequate food because of financial constraint) as a metric for poverty, the authors build a case for this reversal. They examine the potential impact on non-elderly poverty in Canada of applying a guaranteed annual income floor to Canadians below and above age 65.

Their analysis shows that food insecurity prevalence decreases by almost 50 per cent for low-income Canadians eligible for the benefits. They also show that significant health benefits are seen when food insecurity is reduced. The authors argue that health-care system savings would help offset the overall costs associated with extending guaranteed income programs.

“Canadian governments already spend billions of dollars on the downstream effects of poverty, but scant emphasis is put on programs targeting poverty’s roots,” they write.

Finally, the authors acknowledge potential concerns that offering guaranteed income might discourage low-income Canadians from working. In response, they contend that current evidence does not support this concern, but suggest that phasing in the program gradually by lowering eligibility a few years at a time would allow ongoing investigation of the effects before rolling out the program on a large scale.

The report can be found at:
Emery, J. C. H., Fleisch, V., & McIntyre, L. (2013). How a guaranteed annual income could put food banks out of business. SPP Research Paper, (6-37).

Press release by the School of Public Policy, University of Calgary