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Solving Four Problems at Once with a Guaranteed Basic Income for Canada

by John Brian Shannon

How could a Guaranteed Basic Income solve four problems in Canada, and what four problems might they be?

It’s a good question which can only be answered in the context of how these four things are being handled/not handled now.

So let’s see how a Guaranteed Basic Income could help Canada to care for people (including seniors, economic migrants to Canada, and refugees living in Canada) more efficiently than the present multilayered system.

Before we go any further, every group or individual who supports a Guaranteed Basic Income (GBI) may have a different idea of what constitutes a Guaranteed Basic Income. So to keep things simple for the purposes of this discussion, let’s agree for the rest of this post that a Canadian GBI would offer the following benefits to recipients:

  1.  $1088. per month (a standard anti-poverty metric)
  2.  Free provincial healthcare with no deductible
  3.  Free provincial dental care with no deductible
  4.  Free prescriptions with a $50 annual deductible
  5.  Low entry bar to access: Must be a Canadian citizen or legally landed immigrant
  6.  Over the age of majority in the province in which they reside
  7.  A person earning less than the official poverty line amount in the province in which they reside
  8.  Not a person serving time in prison
  9.  Not a person serving in Canada’s military
  10.  Not a person under 24/7/365 medical care (like a person in a long-term coma)

With that said, let’s see what a GBI can do for all Canadians — and not just the actual recipients of those benefits.


GBI Benefit Number One for Canada and its Provinces:

Saving Provinces and Taxpayers Money

Kick every welfare recipient in Canada off of provincial welfare and provincial disability programmes the moment the GBI comes into effect.

Yes, end provincial welfare and provincial disability programmes completely!

It sounds traumatic, but every province in Canada spends multi-millions (and depending on the size/population of the province) billions on the administrative support (administration buildings, office staff, other personnel, IT costs, security costs, land costs, property management costs, management training/seminars, etc) to pay provincial welfare and provincial disability recipients. This is known as the ‘overhead’ cost of running these programmes, and the gross annual totality of those administrative costs can be more than all of the welfare cheques combined.

For each welfare recipient who gets a $700 monthly welfare cheque, there is obviously a per capita cost for every person receiving a monthly welfare cheque; There is a person being paid $50,000/yr (or more) to administer a certain number of recipients, there is a building (or buildings) dedicated to that city, town, or region of the province, and there are other costs associated with running provincial social assistance programmes.

Every province has its own welfare and disability administration. That’s overlapping and duplication of services tenfold (10 provinces) and three territories, plus the federal government.

By paying poverty-stricken people via the federal CPP payments system only, the provinces would no longer be obligated to pay provincial welfare or provincial disability payments. At all. Ever.

After the transition period to a pan-Canadian GBI each province could lower the taxes it charges to its residents by a corresponding amount. Some provinces might be able to drop their provincial sales tax in half or better! Other provinces might be able to abolish provincial income tax altogether.

This is especially true if provinces decide to sell-off all the infrastructure associated with welfare and disability payments. Which (land and buildings especially) could net them many billions of dollars.

‘Yi-Haw!’ — said every Canadian premier.

In short, instead of 13 multilayered, overlapping and duplicated provincial and federal income assistance programmes (now that’s approaching communist-era levels of duplication my friend!) there would be one payer of income assistance only — Canada’s federal government — which would be 100% responsible for administrating the GBI programme.

To finance the GBI, the federal government might need to raise the GST rate by 1% (don’t forget that your provincial taxes would be dramatically lowered) or the feds might decide to raise the federal income tax rate by 1% on the richest Canadians instead.

Either way, provincial taxes would fall dramatically, while federal taxes would see a fractional increase.


GBI Benefit Number Two for Canada and its Provinces:

A GBI Would End Homelessness in Canada

Welfare rates in Canada are based on each province’s ability to pay, not on how much it actually costs to feed, clothe, and shelter a human being in that province. Which is why there is homelessness in a rich country like Canada.

The reason there is homelessness in Canada are threefold:

  • A person lives in a city where rents are high and therefore can’t afford to pay rent, nor do they have enough money to be able to afford to move to a rural area where rental rates are a fraction of the lowest rents in Canada’s biggest cities.
  • A person becomes depressed or violent on account of not being able to afford rent, and ends up committing offenses (like sleeping in someone’s backyard, pickup truck box, or dumpster) or commits property crimes (and gets caught and jailed) and subsequently, no one will rent him or her a place.
  • A person is disabled and is unable to afford rent, nor can they move to a cheaper rental market because they need to be close to a hospital, a clinic, or other medical facility. In some cases, it’s that they have enough money for their rent, or their meds, but not both.

A federally funded GBI would pay enough to allow low-income people to pay rent, eat, receive their prescription medications, buy clothing — and yes, unlike provincial welfare schemes — allow them a little extra money so they can purchase work-related clothing, get a haircut and take the bus to work if they land a job.

Not only all that, but many welfare recipients have serious dental problems. If you’re an employer and you have 50 people apply for 1 job opening, are you likely to hire that one guy who is missing his front teeth? Not likely. With a GBI, those people can get their dental work done and appear as presentable as the rest of the job-seekers and have as good a chance to land the job as the other 49 people.

Provincial welfare systems just can’t afford to provide all that, which means that once people get on welfare, they’re often on it for life.

And they can face reductions in their monthly benefit amount if they do earn money. That just doesn’t happen with a GBI.

Indeed, provincial welfare systems can reduce monthly benefits for many reasons, such as more than one person living in a dwelling. In British Columbia for example, the rent portion of the welfare cheque is regulated to $375. per month (not too many places available for rent in BC for $375/month!) but if two people on welfare live together at the same BC address, both will have their monthly welfare cheque reduced. Now you have ‘two upset homeless people’ instead of ‘one homed couple’.

Which directly impacts crime stats. See how that doesn’t work for taxpayers?

Paying people a standardized $1088 per month (no matter how many people live in the same house or apartment as long as all zoning bylaws are met) will allow people to share accommodations — leaving them enough money every month to eat, buy work-related clothing, haircuts, bus passes, etc. and eventually get them back into the workforce.

Hey! Even if they can work part-time that is a benefit to them and to society because it means that eventually they’ll find permanent employment and they won’t need GBI.

That is the ultimate goal of GBI: Temporary assistance to get back to work — instead of welfare for life.


GBI Benefit Number Three for Canada and its Provinces:

Streamlining the Payments System for Canadian Citizens, Refugees and Economic Migrants

Some poverty-stricken refugees and economic migrants to Canada receive higher amounts of assistance from the federal government than poverty-stricken Canadians.

For instance, some Syrian refugees are receiving $2600 per month from the federal government — that’s per family member!

So, a Syrian refugee family of five receives $13,000 per month no matter where they live in Canada, while a poverty-stricken Canadian-born family of five might receive $1600 per month (or less!) depending on the province in which they reside.

Is that right? Is that how generous Canada is to refugees, but not to its own citizens?

It’s an honourable thing for Canada to accept refugees from war-torn countries and help them to establish a new life here. But isn’t that a little extravagant?

Shouldn’t refugees and economic migrants to Canada as well as Canadian-born adult citizens who earn less than the poverty line amount and Canada’s senior citizens all receive the same level of benefit?

The GBI would pay the same amount to everyone without any reductions in the monthly benefit amount for those who share accommodations, for those who earn money up to the poverty line amount, nor reductions for any other reason, except to pay fines as adjudicated by the courts like vehicle fines or alimony payments, etc.

In this way, every adult who earns less than the official poverty line amount would receive the same monthly benefit amount instead of wildly different amounts. Doesn’t that seem more fair?

Isn’t that a better way to treat citizens and immigrants than the various overlapping and duplicated payments systems? Of course it is.


GBI Benefit Number Four for Canada and its Provinces:

Treating Canada’s Senior Citizens Better

Under the existing CPP and OAS system, some of Canada’s senior citizens receive small amounts of money to live on.

Let’s look at a comparison of a Canadian-born senior citizen couple vs. a Syrian-born refugee couple, both couples reside in Canada.

a) The Canadian-born senior citizen couple may receive as little as $920 per month, and are allowed to work.
b) The Syrian-born senior citizen refugee couple will receive $2176 per month, and aren’t allowed to work.

It seems unfair in the extreme that the people who built this great country should receive far less reward than recent immigrants, doesn’t it?

Of course, it goes without saying that accepting refugees from war-torn countries is a truly noble thing to do. No true Canadian begrudges law abiding persons a better life here in Canada. The country is practically empty and our cities are just tiny dots in a 9.985 million square kilometre landscape so we’re glad to have them.

And paying them $1088 per month (each adult) along with the other GBI benefits seems reasonable, just like it seems reasonable to pay the same amount to Canadian-born seniors who live under the poverty line.

It’s wrong to pay the people who built this great country into what it is today such pitiful amounts of money (which they paid into the CPP fund their entire working lives) while we pay refugees many times more.

It’s like a scene from The Twilight Zone.

By topping-up the pension amount of Canadian citizens to the $1088/mo GBI amount + the GBI benefits, we can do away with the OAS programme completely, do away with pharmacare for senior citizens, and eliminate other overlapping federal and provincial programmes in place to support seniors.

Getting rid of all these layers of duplication will save various levels of government billions of dollars per year, and put the administration of all citizens who live under the poverty line under one roof, one payments system, and one jurisdiction. And we know that ending government waste, overlapping programmes between the federal and provincial governments, and duplication of services between the provinces will save taxpayers billions of dollars every year!

It’s time to streamline Canada’s income assistance systems, it’s time to top-up the incomes of senior citizens to $1088 per month + benefits, it’s time to pay refugees the same amount as Canadian citizens living under the poverty line would receive, and it’s time to put a stop to the costly multilayered benefit systems in Canada.

A GBI would be less costly for taxpayers, it would reduce homelessness and property crimes, it would streamline the benefits payment system and it would help poverty-stricken senior citizens live healthier lives and reward them in a small way for their contributions to our great land.

The Right Carbon Tax for Canada

by John Brian Shannon

“Canadian business needs a fair, transparent, and proportional carbon tax to spur action towards a cleaner environment.”

Which is not the same statement asCanada must punish Canadian industry so the country can meet it’s COP21 emissions targets.”

See the difference?

Unfortunately, in the rush to meet Canada’s global air quality commitments (admirable) the federal government may have leaned more towards ‘action’ on the carbon file rather than ‘smooth implementation’ of the carbon file (forgivable) and now has at least two provincial premiers questioning the mechanics of the federal carbon tax plan.

In the end, both methods would result in Canada’s emissions targets being met, but one way is complimentary while the other is confrontational.

Which of the two ways exampled above would cause you to want to work with the federal government to reach Canada’s international emissions obligations?


No Need to Reinvent the Wheel – Just Fix the Broken Parts and Carry On

Federal Carbon Taxes: Small business always suffer in these scenarios, while large corporations already have multi-million dollar environmental + energy budgets — which means all that’s required for them to meet upgraded emissions targets is a shift in their budget allocations to meet Canada’s new emissions regulations.

Therefore, for polluters emitting less than one megatonne of CO2 annually, such companies shouldn’t pay any carbon tax until they surpass that limit and thenceforth begin to pay a $40. per tonne carbon tax (for example) on any emissions beyond the one megatonne threshold.

Likewise, large companies shouldn’t be required to pay carbon tax until the point in the year is reached where they surpass the one megatonne limit and only then begin to pay $40. per tonne of CO2 (or CO2 equivalent, because not all airborne emissions are of the CO2 variety) on each additional megatonne for the rest of the calendar year.

In this way, Canada’s carbon tax model would be a breeze to implement, a carbon tax that would be small business-friendly, and one that provides an incentive to bigger companies to work toward reducing their emissions over the longer term.


Carbon Taxes Administered by Provinces and Cities

Provincial carbon taxes: Provincial and city carbon taxes should be ‘flow-through’ carbon taxes where 100% of each dollar collected at the transactional level (a point-of-sale tax like a provincial sales tax) is spent on poverty alleviation, or on energy conservation + investment in green energy projects + green energy bonds. As is already done in some Canadian provinces.

Provinces and cities that face serious air quality problems would be thereby empowered by federal legislation to address their unique air pollution issues and be better positioned to help Canada meet its international emissions targets while lowering their healthcare and environmental spending associated with air pollution.


Annual Step-up Carbon Tax

Start with a low carbon tax: If the ‘year one’ federal carbon tax is set at $40. per tonne, the next year could be set at $50. per tonne, and ‘year three’ $60. per tonne, etc., it would allow Canada to continue to meet its emissions goals and to lower environmental and healthcare spending in Canada where a significant proportion of healthcare budgets are devoted to treat respiratory ailments brought-on or worsened by the poor air quality in Canadian cities (and some high land use agricultural areas) and could actually save provincial budgets millions of dollars per year.

If there’s one thing that markets and big business like, it’s a long lead time for new regulations and a ‘carbon-tax-free-zone’ that they can shoot for which will help them lower costs by increasing efficiency (which is closely tied to productivity, ask any economist) and a step-up carbon tax gives them the opportunity to adjust their operations several years ahead of the time when it could begin to get very costly for them.

Hitting Canadian companies with a $220. per tonne carbon tax (which is what Stanford University says is the true environmental and healthcare cost of each tonne of carbon) would prevent companies from attracting the funding required to lower their emissions.

In a perfect world, legislators would slap a $220. per tonne carbon tax on every level of government, each corporation and on citizens and all of them could afford to pay it. Sadly, that isn’t possible. But starting out at $40. per tonne allows companies to begin the process of lowering their emissions without stressing corporate finances.

If you doubt how costly pollution is to the economy, see the landmark study from Harvard Medicine which estimates coal-burning alone costs the U.S. economy between $330 billion and $500 billion per year.


The Need to Address Carbon Pollution

It’s indisputable to any educated person that Canada and every other country needs to address carbon pollution — but ultimately, carbon taxes must be designed to mesh with the overall economy — not entangle it.



Visit The Solutions Project to see how renewable energy can work in your jurisdiction to help citizens live healthier lives, care for the environment, boost the economy and help Canada meet its international air pollution targets.

Images below are courtesy of The Solutions Project

Our 100% Clean Energy Vision for Canada - The Solutions Project. Image 1.

Our 100% Clean Energy Vision for Canada – The Solutions Project. Image 1. Click on image to expand it via your browser tools.

Our 100% Clean Energy Vision for Canada - The Solutions Project. Image 2.

Our 100% Clean Energy Vision for Canada – The Solutions Project. Image 2. Click on image to expand it via your browser tools.

Our 100% Clean Energy Vision for Canada - The Solutions Project. Image 3.

Our 100% Clean Energy Vision for Canada – The Solutions Project. Image 3. Click on image to expand it via your browser tools.

Visit The Solutions Project main webpage here for more information.



Bonus Graphic courtesy of the Canadian Association of Petroleum Producers

 

While the federal government of Canada seeks to meet its international emissions targets, Canadian premiers press for a more business-friendly carbon tax regime.

While the federal government of Canada seeks to meet its international emissions targets, Canadian premiers press for a more business-friendly carbon tax regime. Image courtesy of the Canadian Association of Petroleum Producers. Click on image to expand it in your browser.

Trump and Putin Change the U.S. – Russia Conversation

by John Brian Shannon

Q: What could be worse than another Cold War between the United States and Russia?

A: Nothing. There isn’t anything that could be worse than another Cold War breaking out between nuclear armed superpowers that could conceivably destroy all life on the planet many times over. At the push of a button.

Boom! In an instant we’d be blinded by a flash and our bodies would heat up to 3 million degrees within seconds and everyone on Earth would end up floating around as carbon dust at 100,000 feet before finally settling down on top of the nuclear-winter snow that would cover the entire planet for about 40-years. (Nuclear weapons experts call that snow/radioactive carbon dust mixture, ‘grey goo’)

It’s a miracle it didn’t happen during the 40-year long Cold War, but we came within seconds of such annihilation many times over the course of those perilous four decades.


What the Helsinki Meeting Represents

For some people, the meeting between America’s President Trump and Russia’s President Putin represents an opportunity to catch either president in some sort of verbal gaffe, or to capture a sound-bite and milk it for all it’s worth — while for others, a meeting between the two major nuclear powers represents the best opportunity in the 21st-century to reverse the downward spiral in relations between the two nuclear hyperpowers.

That’s what is at stake here.

Anything else (and that means everything else!) just isn’t important when you’re playing at that level.

Whether 12 or 13 Russians may or may not have interfered in the 2016 U.S. election is orders of magnitude less important than the chance of nuclear war breaking out between the nuclear superpowers.

Also orders of magnitude less important is the purported (but not proven) collusion between Trump’s people and certain Russian citizens who may, or may not be spies or some kind of fixers or operators, and also orders of magnitude less important is Hillary’s purported carelessness in using a non-government (and therefore, non-secure) server to send or receive classified emails that Russian agents (purportedly) were able to hack and read. (That’s a lot of ‘purportedly’s’ — but everyone in America is presumed innocent until proven guilty in a court of law)

And yes, those are all very interesting stories that will probably have a long shelf life and keep reporters buzzing until a bigger story replaces them.

But let’s not get distracted by sensational headlines, nor should we be complacent and forget what’s really at stake.

The leaders of two nuclear powers met, apparently had a businesslike and friendly meeting, and important matters were discussed. That in itself was almost a miracle after the goings-on between the two superpowers over the past decade, which between them, possess over 13,300 nuclear warheads, while the rest of the declared nuclear powers in the world account for a total of 1065 nuclear weapons.

G7 comparison: Estimated Nuclear Warhead Inventories, 2018. Federation of American Scientists

Estimated Nuclear Warhead Inventories, 2018. Federation of American Scientists


Building On A Successful Helsinki Meeting

Rather than let the present momentum lapse, President Trump and President Putin must ‘strike while the iron is hot’ and schedule some arms control talks.

“If not us, who? If not now, when?” — President John F. Kennedy

In 1963, the Comprehensive Test Ban Treaty (which banned atmospheric atomic and nuclear bomb testing) was signed by the United States and the Soviet Union and in 1996 was passed by the UN General Assembly.

The Strategic Arms Limitation Treaty (SALT I) was signed and ratified by both sides in 1972 which paved the way for SALT II in 1979 which was signed by both parties in 1979 but not ratified due to unrelenting bad press in the United States. However, both sides decided to adhere to the terms of SALT II even though it was never ratified. Which is the only reason we see near-parity in nuclear warheads and delivery vehicles between the United States and Russia today.

To keep the present momentum going, SALT II could be re-signed and ratified to pave the way for a SALT III treaty to be created — as per the original plan.

The logic of the SALT agreements is clear: The SALT I treaty limited Anti-Ballistic Missile sites and froze the number of missiles each side could possess, while SALT II established numerical equality in nuclear weapon delivery systems and also limited the number of Multiple, Independent Re-entry Vehicles (bombs) per missile, while the proposed SALT III was designed to draw down and place firm and verifiable caps on the nuclear bomb arsenals of both the United States and the Soviet Union to around 2400 each.

Before the present momentum between the two leaders fade, both men should push their respective administrations to re-commit to SALT II (as a formality) and ratify it before the end of 2018.

That would allow the necessary time to author a fresh SALT III agreement and schedule a signing ceremony for both SALT II and SALT III at the same time.

It’s not rocket science, it’s politics. But previous leaders just couldn’t get it done. Both sides have wanted to do this for almost 40-years, but (very suspiciously) something always cropped-up at the last minute to prevent forward progress on this most important of geopolitical issues.

“Things don’t happen, things are made to happen.” — President John F. Kennedy


Turning Nuclear Bombs into Electricity

At the end of the Cold War a deal was struck between the United States and Russia whereby excess nuclear bombs (remember; any number of nuclear bombs higher than 2400 for the United States and for Russia is complete overkill from a strategic defense perspective) were sold-off to nuclear power plants and used to produce many years worth of high grade, clean electricity.

The program was called the Megatons to Megawatts program and was called one of the greatest diplomatic achievements ever by Harvard’s Matthew Bunn.

The problem is that it had just begun to hit its stride when President Barack Obama cancelled the program unilaterally, and after not much fanfare (only one NPR article) M2M ended.

Assuming both superpowers want to pare-down their nuclear arsenals to 2400 each, that leaves them with 4050 bombs (United States) and 4450 (Russia) to dispose-of. That’s 8500 bombs-worth of clean nuclear power, folks! For example, that’s enough nuclear fuel to power America until the year 2100 at present rates of nuclear fuel usage.

It’s a shame that this noble program was ended long before the most amount of good could be obtained from the Megatons to Megawatts program.

Right now, President Trump could phone President Putin and offer to resume this super-successful program — and he might find a willing partner in Putin who seemed fine with M2M until it was suddenly cancelled in 2013.

Building on success is so much better than re-inventing the wheel, as the saying goes.


A Plug for the Big 5 – as Opposed to the G7

The trouble with the G7 is that the United States GDP, military, number of nuclear bombs, and balance of trade (and in many other metrics) is bigger than all the other G7 nations combined! The U.S. is just too big! It’s the proverbial elephant in the room. The other countries just can’t relate, so they overcompensate.

The recent problems between the U.S. and other G7 members at the recent Charlevoix G7 summit are systemic — the fault isn’t with any of the members. Whatsoever.

And now is as good a time as any for the United States to champion the creation of a new organization, an organization dedicated to superpowers and near-superpowers like Russia, China, Japan, and the EU. Alternatively, if one of those countries or blocs didn’t want to join, The Commonwealth of Nations bloc could join instead.

In such an organization, members would find that the problems that superpowers and near-superpowers encounter would be similar problems and that solutions might also be found to be similar. At best, the world’s major powers could work together on their common problems, while middle powers could create the middle-power ‘Next-20’ Group, or N20.

In that way, superpowers and near-superpowers would be grouped together (logical) and middle powers would be grouped together (also logical) and the previously noted systemic problems would disappear, allowing politicians to roll up their sleeves and get to work on common issues instead of struggling with one giant stuck in a group of middle powers.

Read about the astonishing differences between the U.S. and the other G7 powers here.


Geopolitical Momentum is Vital and Precious – It Must Never Be Wasted

Now that the two presidents have had their first major meeting that seemed to go very well, it’s time to capitalize on the goodwill before events sweep away those good feelings and opportunities bigger than the sky are (again) allowed to slip away!

Whether the next phone call between the two men is about restarting the highly-successful Megatons to Megawatts program, or plans to meet with President Xi Jinping to discuss the Big 5 organization, or build onto the world-changing SALT treaties — or to discuss some other plan the two presidents discussed — now is the time to build on the initial meeting success and thereby positively change the conversation between superpowers and change the entire conversation that is happening in the global media because no other, better story appears to replace all that sniping.

One of the ways leaders lead effectively is to know when it’s time to change the conversation the media is having with itself and with its viewers.

I respectfully suggest, that time is NOW.