Abstract
Recent and prominent basic income proposals in the United States and Canada are introduced and explained in this chapter, with a focus on Andrew Yang’s Freedom Dividend financing proposal. A new financing method is explored for both countries based on land value—one with a rich philosophical and political tradition in America dating back to Thomas Paine and Henry George. The concept of a land value levy or LVT (Land Value Taxation) is quantified and applied to the financing of a basic income for the first time in Canada, and presented as an alternative financing option to Yang’s VAT (Value Added Tax) for the Freedom Dividend in the United States. The LVT’s progressive structure versus the VAT’s regressive impacts are explored and offered as a complementary finance mechanism to the Financial Transaction Tax and other elements of Yang’s proposal, while removing VAT. Other sources of economic rent are discussed in the final section to further increase dividend payments to citizens.
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Notes
- 1.
Ontario Basic Income Pilot, Government of Ontario, April 24, 2017 (last updated: April 8, 2019): https://www.ontario.ca/page/ontario-basic-income-pilot, accessed July 13, 2020. Quote: “In June 2016, we asked the Honourable Hugh Segal for advice on how we could design, deliver and evaluate a basic income pilot. … The Ontario Basic Income Pilot (OBIP) was announced by Premier Kathleen Wynne in Hamilton in April 2017 and the first phase to enroll participants, was successfully completed in April 2018, with full participation across the three pilot sites.”
- 2.
Ibid.
- 3.
https://worldpopulationreview.com/countries/canada-population (30,319,368 adults in Canada in 2020. Citizen versus non-citizen adults figures are not provided).
- 4.
- 5.
Calculation by Richard Pereira of Earthsharing Canada’s proposal and figures.
- 6.
Gary Flomenhoft, “Total Economic Rents of Australia as a Source for Basic Income”, Chapter 4; in Richard Pereira (ed.), Financing Basic Income (Palgrave: New York, 2017).
- 7.
Ibid., pp. 84–85.
- 8.
Statistics Canada, National Balance Sheet and Financial Flow Accounts, Fourth Quarter 2019 [released 2020-03-13] and National Balance Sheet Accounts (×1,000,000) [Q1 2019 to Q1 2020], accessed June 25, 2020.
- 9.
The Economist, “Why Henry George Had a Point”, April 2, 2015: https://www.economist.com/free-exchange/2015/04/01/why-henry-george-had-a-point, accessed July 6, 2020.
- 10.
Francis K. Peddle, Dominican University College/Collège universitaire dominicain http://www.dominicanu.ca/academics/professors/francis-k-peddle.
- 11.
Communications with Francis Peddle and Earthsharing Canada, June and July 2020 via email. Communications with Frank de Jong, Francis Peddle and Statistics Canada, June 2020 via email (Statistics Canada Case #978373). Concerning Australia, the most recent figures demonstrate aggressively escalating land prices since Flomenhoft’s publication, with the Australian Financial Review writing in May 2020 that “Rural property showed its resilience as an asset class in 2019 with the median price of a hectare of farmland rising 13.5 per cent, despite drought, floods and bushfires, according to Rural Bank’s latest Australian Farmland Values report. This was higher than the 10.7 per cent recorded in 2018 and the strongest pace of annual growth recorded since the bank began compiling its report in 2015” (Larry Schlesinger, “Farmland prices surged in 2019 and will rise again,” May 5, 2020).
- 12.
Mason Gaffney. “The Hidden Taxable Capacity of Land: Enough and to Spare”. International Journal of Social Economics, 36, 4 (2009).
- 13.
Feed Ontario (formerly the Ontario Association of Food Banks), “Cost of Poverty in Ontario 2019” https://feedontario.ca/cost-of-poverty-2019/ and full report: https://feedontario.ca/wp-content/uploads/2019/09/Feed-Ontario-Cost-of-Poverty-2019.pdf. Additional cost of poverty data found at: “The Cost of Poverty: An Analysis of the Economic Cost of Poverty in Ontario”, https://ccednet-rcdec.ca/en/toolbox/cost-poverty-analysis-economic-cost-poverty-ontario.
- 14.
https://worldpopulationreview.com/countries/canada-population (30,319,368 adults in Canada in 2020. Citizen versus non-citizen adults figures are not provided).
- 15.
$124.1 B/$36 B = 3.45. $36 B represents the cost of providing a $100 monthly UBI to Canadian adults. Therefore, 3.45 × 100 = $345/month UBI. A UBI payment to only adult citizens in Canada, as per the U.S. Freedom Dividend proposal by Andrew Yang, would provide a higher payment based on an estimate of the Canadian adult citizen population being 10% lower than the total adult population, or $383/month ($124.1 B/32.4 B = 3.83. Therefore, 3.83 × 100 = $383/month).
- 16.
CBC, “Amidst a Global Pandemic, Hugh Segal's Call for a Guaranteed Annual Income Is Even More Timely”, March 27, 2020. From: https://www.cbc.ca/radio/thesundayedition/the-sunday-edition-for-march-29-2020-1.5509908/amidst-a-global-pandemic-hugh-segal-s-call-for-a-guaranteed-annual-income-is-even-more-timely-1.5509938, accessed July 17, 2020. Parliamentary Budget Office (PBO) of Canada, “Costing a National Guaranteed Basic Income Using the Ontario Basic Income Model”, Office of the Parliamentary Budget Office/Bureau du Directeur Parlementaire du Budget, April 17, 2018.
- 17.
Having a basic income, many will choose to leave social housing with the newfound economic security and freedom of mobility, and choice in housing previously not available without basic income. Thereby, a portion of this public program spending is made available for direct cash transfers in the form of basic income. For examples of overly bureaucratic and wasteful, often corrupt, spending of social and public housing funds by housing authorities, see Pereira (2017).
- 18.
James Wilt, “Canada’s Mining Giants Pay Billions Less in Taxes in Canada Than Abroad”, The Narwhal, July 16, 2018.
- 19.
Ibid.
- 20.
James Wilt, “In-Depth: Are Albertans Collecting a Fair Share of Oilsands Wealth? New Data Shows Owners of One of the World’s Largest oil Deposits Are Getting Cut Out of the Deal”, The Narwhal, August 14, 2018.
- 21.
Ibid.
- 22.
Ibid.
- 23.
Richard Milne, “Wanted: New Chief Executive for Norway’s $1.2tn Oil Fund”, Financial Times, February 23, 2020.
- 24.
David Thompson and Keith Newman, “Private Gain or Public Interest: Reforming Canada’s Oil and Gas Industry”, Canadian Centre for Policy Alternatives and Parkland Institute, December 2009, 23.
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Pereira, R. (2023). Universal Basic Income and Land Value: A Canadian Assessment, with Implications for America. In: Pereira, R. (eds) Financing Basic Income. Exploring the Basic Income Guarantee. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-29012-1_6
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