Why does guaranteeing a minimum annual salary to all Canadians scare politicians so much? Many people view this as establishing a welfare state while bankrupting our country during the process. This is so far from the truth. By taking a fresh look on how we help our co-citizens, we can provide everybody with the basics of life while streamlining our bureaucracy, increasing our tax base, and stimulating our retail industry!
Before we move onto our proposed solution, let us first assess the current state of our average citizen, namely household income/expenditures. These numbers are taken from 2012 Statistics Canada results.
Following is a table analysing the average expenditure per year for the average Canadian household in dollars;
Food expenditures | 7,739 | 8% |
Shelter | 15,811 | 17% |
Principal accommodation | 14,373 | 16% |
Other accommodation | 1,438 | 2% |
Household operation | 4,111 | 5% |
Household furnishings and equipment | 2,183 | 2% |
Clothing and accessories | 3,461 | 4% |
Transportation | 11,216 | 12% |
Health care | 2,285 | 3% |
Personal care | 1,194 | 1% |
Recreation | 3,773 | 4% |
Education | 1,386 | 2% |
Reading materials and other printed matter | 214 | 0% |
Tobacco products and alcoholic beverages | 1,274 | 1% |
Games of chance | 202 | 0% |
Miscellaneous expenditures | 1,430 | 2% |
Income taxes | 13,060 | 14% |
Personal insurance payments and pension contributions | 4,272 | 5% |
Gifts of money, alimony and contributions to charity | 1,831 | 2% |
91,253 |
According to Statistics Canada, the average household income is $65,200. Compare this to the average household expenditure of $91,253, our average Canadian household is constantly building additional debt year in and year out.
The goal with the Guarenteed Minimum Annual Income (GMAI) plan, is not simply to give the lowest income earners money to live, but it is meant to ensure that every Canadian has a place to live, food on the table, a way to get around, clothes on their back, and a chance to live healthy life.
Before we continue, let us define what we consider to be the basic that we want in order to live this kind of life as a free Canadian (figure in dollars, per Canadian household). The GMAI contribution total is an estimated sum and is displayed in millions;
Household | Total | |
Food expenditures | 7,739 | 30,720 |
Shelter (Rent or Mortgage Payments) | 15,811 | 62,762 |
Household operation | 4,111 | 16,319 |
Household furnishings and equipment | 2,183 | 8,665 |
Clothing and accessories | 3,461 | 13,738 |
Transportation | 11,216 | 44,522 |
Health care | 2,285 | 9,070 |
Education | 1,386 | 5,502 |
48,192 | 191,299 |
One thing to keep in mind is that according to Statistics Canada there is an average of 2.5 individuals in a household, which translates the $46,456 per household. This means that each individual would get $18,582.
Following is a list from Statistics Canada (2012) on the number of households in each earning level (a household representing 2.5 individuals);
Under $5,000 | 773,076 |
$5,000 - 9,999 | 722,444 |
$10,000 - 14,999 | 938,644 |
$15,000 - 19,999 | 1,015,628 |
$20,000 - 24,999 | 845,644 |
$25,000 - 34,999 | 1,330,276 |
$35,000 - 49,999 | 1,654,448 |
$50,000 - 74,999 | 1,566,264 |
$75,000 - 99,999 | 757,380 |
$100,000 - 149,999 | 467,580 |
$150,000 - 199,999 | 122,448 |
$200,000 - 249,999 | 48,272 |
$250,000 and over | 76,900 |
10,319,004 |
The GMAI shall be applied against a household's pre-tax income level. This program ensures that a household will have a minimum of approximately $48,192.
How do we pay for this program?
- This program would replace approximately $139 billion that is currently being supplied to Canadians.
- We currently pay the provinces approximately $13 billion (Canada Social Transfer Equalization Payments which we would no longer pay.
- General equalization payments to the provinces would be halved, generating another $8.6 billion in savings. By introducing an added spending of $191 billion, provinces would see their consumption tax increase by at least 9 billion dollars.
- The federal portion of HST on new spending would bring in over $9.5 billion.
- Corporations would stand to benefit greatly from the new spending, immediate corporate tax revenue would increase in excess of $24 billion.
With these initial estimates, we come to a total of $194 billion. This means that this program will save our government almost $3 billion.
By introducing this level of new spending into our economy, we will not only increase the amount of new jobs but significantly stimulate new business and reinvigorate our middle class!
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