What would happen if federal law banned discrimination based on income?

Michelle Falardeau-Ram and Michael Walker
The Next City
June 21, 1998


The Next City asked Michelle Falardeau-Ramsay, chief commissioner of the Canadian Human Rights Commission, and Michael Walker, executive director of the Fraser Institute, to comment


It would bring federal human rights law into line with that of most Canadian provinces. Right now, five provinces provide protection from discrimination on the basis of either source of income or social condition. Two other provinces specifically ban discrimination on the basis of being “in receipt of public assistance.” However, there is currently no such protection from discrimination by employers or service providers in the federal jurisdiction: banks, transportation companies, telephone companies, or the federal government itself.

Poor people would have improved access to banking services. People on low incomes often have trouble cashing welfare or family allowance cheques at a bank because they may not have an account or proper identification, such as a driver’s licence. Instead, many are forced to use commercial cheque-cashing services that charge a percentage fee. A change to the federal law would make it illegal for a bank to deny someone a service merely because of his source of income or social condition.

Employers and service providers could still say “no” if they have a good reason. Banning discrimination based on income does not mean that a telephone company would have to provide service if a customer cannot pay, or a bank would have to cash a cheque it believes to be fraudulent, or an employer would have to hire a welfare recipient who is not qualified for the job. If there is a legitimate reason, it’s not discrimination. But denying someone a job or a service merely because of stereotypes or biases about poor people should be illegal.

There would be greater recognition that poverty is a human rights issue. While human rights laws cannot in themselves end poverty, banning discrimination based on income would go one step further toward recognizing that human rights are indivisible and that economic and social rights are as important as political and civil rights.

If the ban were applied in the public sector, the federal income tax system would change dramatically. The federal government engages in obvious income discrimination via personal income tax, charging a higher rate as incomes rise. The only sort of tax system to survive would be a flat tax.

Federal transfer programs would also need reform. For example, an inability to discriminate on the grounds of income would mean that all old age security payments, which the government now doles out according to family income, would be uniform. And what about the Canada Pension Plan, which cuts out at $35,800 — the maximum pensionable earnings? We couldn’t tolerate such crass discrimination against high-income people under this antidiscrimination law.

In reality, advocates of this law are really taking aim at the private sector. Of course a flat tax system would be an excellent idea, but it is opposed by the very people who normally support antidiscrimination laws, precisely because it would not discriminate against higher-income individuals. In the private sector, the standard questions that credit unions ask before they approve a mortgage would no longer be appropriate, so clients could demand and expect to receive mortgage money they cannot repay. The same would be true of car loans. And what about those juicy credit cards that would be available to all and sundry, with no consideration of the credit card user’s ability to pay the balances.

The germ of a plausible idea lurks behind this proposed law — that financial means should not determine, at the most basic level of consumption, a person’s ability to participate in the market place. But this is an argument for a minimum level of support, to let individuals afford the basic necessities of life. It is not an argument for a law that would prohibit discrimination on the basis of income.

Michael Walker

Michelle Falardeau-Ramsay

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