Basic Income: A lost opportunity for Lindsay business owners

“Mankind was my business. The common welfare was my business; charity, mercy, forbearance, benevolence, were all my business.”

Charles Dickens, A Christmas Carol

When she got her BA in psychology and English, Suzanne McCarthy figured a decent education would open the right doors so that she would be set in life. Not in the kind of way where great riches are expected, but because of the simple notion that higher education has always promised a solid life, with economic stability.

In a modern, capitalist society like Canada’s, education is meant to be the great equalizer, no matter one’s socio-economic place.

While McCarthy got a good higher education and was raised in a solid, middle-class household, she soon found herself enrolled in Ontario’s new basic income pilot program in Lindsay, even though she is a small business owner along with her husband, Connor. They are among the 2,000 people (or couples) in Lindsay who were getting the new benefit, before the new Progressive Conservative government led by Premier Doug Ford unceremoniously cut the program.

During the election of June 7, the PCs promised they would let the pilot program be completed. The new government was sworn in June 29 and on August 1 they cancelled it.

The husband and wife team operate Cottage Woodworks, local builders who specialize in small structures, from tiny homes, to sheds and garages.

There’s a lot of anxiety in running a small business, says McCarthy. “We provide employment, and yet we’re struggling ourselves. It’s common to make lower wages than your employees sometimes.”

McCarthy is the kind of entrepreneur that basic income advocates like to point to – someone who might be in need of financial assistance and a leg up, yet is attempting to participate in an economy that has been far from kind to average people in the last few decades.

For instance, the top 20 per cent of earners in Canadian society were the only people whose share of total income rose in the nine years during 2006 to 2015, according to figures from the Broadbent Institute.

Long before they began receiving basic income, there was a particular period of desperation for the family, McCarthy says. She reached out to Ontario Works back then to see if they could help.

“The Ontario Works woman laughed when I called,” McCarthy remembers. Once she found out the McCarthy’s were business owners, despite not having available income at the time, there was nothing Ontario Works could do. The McCarthy’s would have had to have been much closer to destitution in order to have gotten a hand up from the state, a gaping social policy hole that has yet to be filled but for which basic income held some promise.

Since then things have stabilized, but the basic income pilot had been a lifeline in many ways for the few months they had collected it.

The McCarthy’s were counting on it to help on a number of fronts. For instance, they currently have a leaky roof and do not have a working furnace.

“The new roof that we were planning to install would have served to provide work for our employees in between projects for other clients. Also, it would prevent water damage that will ultimately cost us more in the long run,” she tells the Advocate.

They had also been planning for some time to purchase a ‘metal break’ – “a large tool we use on most of our projects but currently have to rent.” Purchasing this would have saved them money in the long term.

They also wanted to advertise more, since they serve all of Ontario cottage country. Advertising would help them find clients willing to invest in top-quality construction and carpentry that can withstand storms and the test of time.

“The better our advertising campaign the more steady our work and the better it is for our employees. Without this additional advertising there is a much greater risk of long periods of unemployment,” she explains.

McCarthy says the amount that we were receiving on basic Income was “substantial.”

“It would have made a significant impact on our family and business. It would have offered stability for our family and the young families that our employees support.”

As well, the results of the basic income investment in their business would have helped them support an average of one additional full-time employee through the year, says McCarthy.

She also believes that through taxation, such as the tax on their services, tax on extra materials that would have been purchased, and tax on extra payroll expenses, the government would have made back much of the money they would have given them in basic income payments.

“Additionally, they (the government) would have been able to avoid some Employment Insurance payments for our employees during slow seasons,” says McCarthy.

The Parliamentary Budget Officer (PBO) forecasts that more than 7.5 million Canadians would benefit from a national basic income program. The cost to implement such a program for all Canadians is estimated by the PBO to be about $43 billion, which could be even lower if it were administered by the federal government in cooperation with the provinces. This also not factor into account expected savings. With less poverty, this typically would translate into less stress on healthcare, social programs or even resources spent for public safety.