Guaranteed Min. Ann. Inc.

Introduce a Guaranteed Minimum Annual Income – As good Canadians we need to do everything we can to ensure a level of education and life style that is just and humane for all Canadians.  To accomplish this we shall create a GMAI (Guaranteed Minimum Annual Income) fund which will provide a guaranteed minimum income policy that would be phased to replace current federal income support programs.  Such a policy would be linked to tax reform and simplification.

We will endeavour to cut the size of Canada’s Social Department’s and integrate them into one. We will establish a monthly minimum income to cover all aspects of the social welfare state. In this way we cut the size of government and we cut the cost to tax payers. As well with the efficiencies we intend on to bringing to this system we hope to have this pay for itself and raise people’s standard of living.

The movement towards a minimum income policy will provide an incentive to work by the financial security that individuals will be provided.  This will allow people to take risks in new and/or challenging endeavours and at the end of the day will be a huge boon to small to medium sized businesses.  Additionally, a large portion of social services and medical care revolves around the stress and environmental issues surrounding people living in poverty and/or in losing everything they hold dear.   We have the opportunity to effectively deal with homelessness and poverty while simplifying and reducing the tax burden that every citizen is now under.

The individuals who would be eligible to participate in the minimum income program are currently exempt from paying personal income taxes. The payroll deductions that would be directed towards Employment Insurance (EI) would instead be directed to the GMAI (Guaranteed Minimum Annual Income) Fund.

Now you may ask yourself, can we afford this?

For our analysis we shall examine our eligible workforce 19 years of age and older at an 8.6% unemployment rate taken from the 2006 census.  In that document the rate was 6.6%, so we’ve trended that up to meet today’s reality.  This leaves us with 1,253,240 people without jobs and 8,519,900 people who are not in the workforce.

The average minimum wage across Canada is $8.84 per hour.  At an average of 160 hours per month, this leaves a monthly income of $1,414.40 per individual.  We shall include a basic benefits package covering dental and proscription drugs.  This can be as high as $150 per month per individual.  This leaves us at a total expenditure by the government of $1,564.40 per month.

Accordingly, we are looking at an annual overall cost of approximately 15.3 billion dollars.

According to the Actuary to the Employment Insurance Commission EI spending is projected to be 22.7 billion dollars in 2010.  Our government is currently reporting for 2009-2010 time period 16.795 billion dollars collected by EI.  Since EI is paid directly by the employer, we would move this over to our GAI fund.  This would result in a surplus of 7.4 billion dollars or if we take what the current government reports a surplus of 1.495 billion dollars.  We are making sure that no Canadian need go hungry or wanting in this country.  Not only that, but we are injecting a huge stimulus into our small to medium sized businesses while simplifying our tax system.

What are some other financial benefits?

There are many financial benefits, but for sake of this document let us review but a few of them.

By providing a minimum income to individuals who are not a part of the work force we have a lot more taxable spending taking place.  After an individual pays for their food and lodging, let us make an estimation of about $500 of taxable spending per month (where the government collects 5% on the transaction).

For this calculation we shall use the people who were not taking part in the labour force, this totalling, 8,519,900 people spending $500 taxable dollars per month.  This results in additional tax revenue of 2.6 billion dollars from GST.  In terms of new revenue generated from the business sector let us look at the additional corporate tax revenue generated by this.  Let us estimate that each individual will spend what the government provides them in a given month.  That would mean an additional $1,414.40 per month.  This results in approximately $27.475 billion dollars of corporate tax revenue.

So in revue by restructuring our employment insurance strategy by implementing our minimum income strategy we will save anywhere from $31.57 to $37.475 billion dollars.