The co-founder of one of Ottawa’s leading tech companies is calling on the Ontario government to save the province’s basic income pilot, arguing the plan deserves a chance to show whether it can pull low-income residents out of poverty.
Pythian CEO Paul Vallée, who penned an open letter to Premier Doug Ford and Social Services Minister Lisa MacLeod last month expressing his opinion, told OBJ some of the world’s top economists and business leaders support the push for a basic income.
Referring to Ontario’s pilot as a research experiment designed to see if a basic income leads to more long-term economic benefits than the current system of social assistance programs, he said the Tories’ decision to pull the plug on the program is shortsighted.
“The experiment was intended to quantify what exactly does (a basic income program) cost,” said Vallée, who co-wrote the letter with Floyd Marinescu, CEO of Toronto-based C4Media.
“We know poverty costs a lot; it costs a ton in health care, it costs a ton in services, it costs a ton in overhead, it costs a ton in lost taxation. If (the pilot program) is more expensive, how much more expensive is it? We don’t know, but the experiment was designed to answer that question.”
The Ontario government announced in July it was pulling the plug on the program as of March 31, 2019. The pilot was originally slated to run for three years, providing payments to 4,000 low-income residents in a number of communities, including Brantford, Hamilton and Thunder Bay.
Single participants receive up to $16,989 a year and couples receive up to $24,027, less 50 per cent of any earned income.
MacLeod, the MPP for Nepean, said in August the $150-million program launched by the previous Liberal government in April 2017 “provides no hope to nearly two million Ontarians who are trapped in a cycle of poverty.”
Vallée disputed that notion, saying the gap between the province’s richest and poorest residents is growing every year. He argued that’s bad for everyone, including businesses, because Ontarians stuck in poverty don’t have the means to purchase goods and services and thereby pump money back into the economy.
A basic income, he said, would allow those people to become active consumers and contribute to Ontario’s tax base. That could prove to be a net benefit to the province’s coffers in the long run, Vallée argued.
“Zero dollars in cash in the pockets of people is just not a safe number,” he said. “Things like food banks deprive local grocers of their customers. It’s taking a component of our society and forcing it to opt out of all of the mechanisms that we built in our society to permit that social ladder to exist.”
In addition, Vallée contended that replacing Ontario’s current social assistance system – which requires government workers to verify virtually every detail of a person’s finances – with a more straightforward basic income plan will eliminate red tape and ultimately save taxpayers money.
“Think of the overhead of all of that regulation,” he said.
The longtime entrepreneur, who co-founded Pythian in 1997, also took issue with critics who claim a guaranteed income discourages recipients from looking for work. Vallée said he hasn’t seen any evidence to back up that view.
“To cancel an experiment that was designed to measure these things and then to use as your explanation that the reason we’re cancelling the experiment is because it was too expensive and would cause a work disincentive is just disingenuous, and we object to that,” he said.
The letter was signed by 100 CEOs, business owners and company founders, including well-known local entrepreneurs such as Eli Fathi of MindBridge AI and Klipfolio co-founder Allan Wille. Billionaire business titans around the world, including Richard Branson, Elon Musk and Mark Zuckerberg, have also come out in support of basic income plans, Vallée noted.
"The narrative that the business community is opposed to this approach to a reform of our social framework, it’s not true."
“The narrative that the business community is opposed to this approach to a reform of our social framework, it’s not true,” he said.
“We just want the Ontario government to realize that I think there is a growing consensus that we need to rethink the way we approach (fighting poverty). What they need to see is that this is not a movement of the left – this is a movement that includes the mainstream of our society, including the economic engine of Ontario.”
While he doesn’t expect the letter to change the Tories’ minds, Vallée said he is hopeful that it will cause people to stop and think about how society is failing to address the root causes of poverty.
“This government is not known for its willingness to compromise and negotiate,” he said. “So we don’t really expect (the basic income pilot to be restored), but we do believe that we can hold them accountable for their lack of compromise and lack of willingness to negotiate. We think we can have an impact over the longer term.”
You can read a copy of Vallée and Marinescu's letter here.