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December 9, 2000

Chretien eyes cradle-to-grave benefits

Longing for a legacy, PM creates committee to study guaranteed annual income program

James Baxter
Southam News
National Post

OTTAWA - Jean Chrétien is considering the creation of a cradle-to-grave guaranteed annual income program, government sources say.

The Prime Minister is reportedly preparing to assemble a high-level committee to determine the feasibility of a lifetime guaranteed annual income program. One name being touted to lead the committee is Ian Green, the deputy secretary to the Cabinet.

Top-level Liberals said yesterday they expect the initiative to feature prominently in the upcoming Throne Speech, expected in mid-February.

Sources said little is known about whether significant new funds would be drawn from the government's ballooning budget surplus or when the program might be put in place.

The minimum-income supplement would be developed by merging all or parts of the federal child benefit, welfare, employment insurance and old age pension programs.

Officials at Human Resources Development Canada said yesterday the department plans to undertake a full review of all its current income programs and create an inventory of how much gets spent in each of the regions. They admitted the federal government is aware that any plan of this sort would likely raise concerns in some provinces and that significant "horse trading" of powers will be required.

Provinces usually view new social initiatives with considerable suspicion, complaining that the government creates new programs and then withdraws funding once the programs are up and running. In this case, the provinces would likely demand a guarantee of perpetual funding.

The Prime Minister's Office and Privy Council Office both refused to comment yesterday and would not confirm the existence of the special committee. Creating such a program would allow Mr. Chrétien to fulfill a number of his campaign promises, notably attacking child poverty and restoring funding to social programs.

More importantly for Mr. Chrétien, a guaranteed income program would provide him with a political legacy to rival Pierre Trudeau's repatriation of the Constitution or Brian Mulroney's North American Free Trade Agreement.

However, people close to the Prime Minister said he was deeply moved by the public outpouring of emotion at Mr. Trudeau's death and the reverence for what he built.

Aides say privately that, armed with a new mandate, Mr. Chrétien appears galvanized to "create something of lasting significance."

In a speech on Wednesday, Mr. Chrétien hinted his goal for the upcoming Parliament will be to wage war on poverty.

"The fact is that our prosperity is not shared by all," the Prime Minister said in his keynote address at the Liberal party's Confederation Dinner. "There remain, unfortunately, serious social problems in the land. Too many children live in poverty. Too many aboriginal Canadians live in Third World conditions. As a Liberal, I deeply believe that government has the responsibility to promote social justice."

While Mr. Chrétien's interest in it is new, the concept of a national guaranteed income is not. It was originally espoused by noted economist Milton Friedman as early as 1962 and, at the urging of the New Democrats, was examined by the Liberal government of Lester B. Pearson, in whose Cabinet Mr. Chrétien first served.

It again saw life in 1971 when it was openly championed by Trudeau-era Cabinet heavyweight Marc Lalonde, who at the time was Minister of Health and Welfare, in a report titled Federal Income Security Protection. The idea was hotly debated, but was never embraced by Mr. Trudeau and was eventually shelved.

The idea was resurrected during the 1993 election campaign when the Reform Party added it to its platform as a way of streamlining Canada's convoluted income-security programs. It was then considered as part of the social security reform undertaken by the Chrétien government in its first term, but was ignored because it was seen as potentially too expensive during a period of deficit-cutting.

As the deficit was pared down, the idea again caught the attention of then-HRDC deputy minister Mel Cappe, who is now Clerk of the Privy Council and Ottawa's most influential bureaucrat. A former executive assistant to prime minister Joe Clark, Mr. Green was an associate deputy minister under Mr. Cappe at Human Resources Development Canada and is considered one of Mr. Cappe's most reliable and trusted deputies. Mr. Green moved over to the Privy Council Office in 1998, a year before Mr. Cappe became the country's top public servant.

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