The time has come for income security
Early in 1985 the provincial government, under Premier Brian Peckford, established a Royal Commission on Employment and Unemployment. One of the tasks assigned to the Commission was to “assess the adequacy of the income support system in mitigating the adverse social and economic effects of unemployment.”
The commission conducted an extensive research program, held hearings in all regions of the province and received many briefs from concerned citizens and organizations. I was privileged to be the chair of that commission. The other commissioners were businessman Harold Lundrigan, medical doctor/educator Linda Inkpen, future mayor Andy Wells, and information technology expert Stephen Delaney.
The commission submitted its final report, “Building on Our Strengths,” to the Peckford government in September of 1986.
One of its key recommendations was that: “The Government of Newfoundland and Labrador should enter into negotiations with the government of Canada for the implementation of a new income security system along the line suggested in this report, possibly using Newfoundland and Labrador as a pilot project for Canada
as a whole.”
At the time, I asked each of my fellow commissioners privately what they thought was the most important of the 242 recommendations we had submitted to government. Every one of them independently chose the recommendation on income security reform.
No action was taken on the recommendation during the final years of the Peckford government. However, his successor, Clyde Wells, initiated a process for the production of a Strategic Economic Plan for Newfoundland and Labrador.
This plan, “Change & Challenge,” was published in June, 1992. One of its action items was to direct the Economic Recovery Commission (ERC) as follows: “With support from other provincial agencies and in consultation with community groups, to work with officials from Employment and Immigration Canada to design an alternative income security system that both protects the income needs of Newfoundland and Labrador households and provides strong incentives for work, education and self-employment.”
At the ERC, we took this challenge very seriously, and devoted considerable time and effort to its implementation.
This included commissioning research and development by experts at Memorial University and some mainland universities. Clyde Wells and I also met with the then federal minister of Human Resources Development Canada, Lloyd Axworthy. He agreed to support the project and instructed some of his officials to co-operate with the province’s efforts.
The project had strong support from several provincial cabinet ministers, including Ed Roberts and Chris Decker.
In the week between Christmas and New Year in 1994, Decker and I travelled to the maritime provinces and made presentations to the premiers and cabinets of each of Nova Scotia, New Brunswick, and Prince Edward Island. They were all interested and all agreed to support the idea of such a new income security system being implemented as a pilot project in Newfoundland and Labrador.
The ERC prepared a “Proposal for a Comprehensive Reform of Income Security Programs for Newfoundland and Labrador” in September, 1995. The proposal contains many elements, including a design for an educational supplement and a reformed social assistance program. But the two main elements of the proposal, which are the focus for this column, are a basic income supplement and a work supplement.
The basic income supplement would be paid to every individual in the province. The work supplement would be paid to low-income workers in order to bring their incomes up to what has since been referred to as a living wage.
The one glaring problem at the time was that the two governments, federal and provincial, would only agree to the redistribution of funds from existing programs, including unemployment insurance and social assistance, to finance the new income support program.
This meant in effect that, in order to increase the incomes of the poorest people in the province, income would have to be re-distributed from somewhat better off low-income people. This would not have been acceptable.
I was just in the process of making the case to political leaders in both orders of government that the success of the program would depend on new monies being made available out of general revenue to support the project.
All taxpayers should share the cost in a progressive tax system, not just the somewhat better off low income workers themselves.
Shortly after, Wells announced his intention to resign as premier early in 1996. Brian Tobin replaced Wells as premier. Unfortunately, the new premier had other priorities and the momentum for income security reform was lost.
The current COVID-19 pandemic has generated new interest in strengthening Canada’s income security system.
If a program similar to what had been proposed 25 years ago had been in place, with adequate funding, it would have been highly beneficial. In an affluent society such as Canada, every citizen deserves to enjoy a basic level of income security, and every worker deserves to earn a living wage.
Dr. Douglas House is Professor Emeritus and an honorary research professor of sociology at Memorial University. He has also held several senior public service positions over the years, including chair of the Royal Commission on Employment and Unemployment, chair of the Economic Recovery Commission, and deputy minister of the Department of Innovation, Trade and Rural Development.