UNIVERSAL BASIC INCOME IN CANADA

Universal basic income in Canada refers to the debate and trials with basic income, negative income and related welfare systems in Canada. The debate goes back to the 1930s when the social credit movement had ideas around those lines. Two major basic income experiments have been conducted in Canada. Firstly the Mincome experiment in Manitoba 1974–1979, and secondly the Ontario Basic Income Pilot Project in 2017. The latter was intended to last for three years but only lasted a few months due to its subsequent cancellation by the then newly-elected Conservative government.

As of 2014, the Liberal Party of Canada, the New Democratic Party (NDP), the Green Party of Canada, the Pirate Party of Canada,provincial party Québec Solidaire and former conservative senator Hugh Segal advocate for basic income in Canada. Mike Redmond, former leader of the New Democratic Party of Prince Edward Island, supports a basic income pilot project in Prince Edward Island.In November 2013, a poll commissioned by the Trudeau Foundation found that 46% of Canadians favored and 42% opposed replacing current economic assistance with a guaranteed national income.Canadian Prime Minister Justin Trudeau announced a new trial in March 2016.

In Canada about 3.7 million people live below the poverty line, according to the 2019 Canada Income Survey. Statistics Canada considers people as living below the poverty line if they don’t have enough income to cover the local cost of necessities such as food, clothing, footwear, transportation and shelter.Right now, struggling Canadians can access help support through a patchwork of federal, provincial and municipal programs.

Health economist Evelyn Forget, a professor in the department of health sciences at the University of Manitoba in Winnipeg, said that basic income would replace many of those programs, and ideally cut out a lot of the confusing, bureaucratic red tape.

Forget, the author of Basic Income for Canadians: from the COVID-19 emergency to financial security for all, is a firm believer in the benefits of basic income.

She explained there are two types:

• Universal basic income (UBI) means that everyone in a society — rich or poor — gets a monthly check for the same amount. At the end of the year, the government uses the tax system to balance out the scales and recoup that extra cash from the higher income earners who didn’t end up needing it.
• Guaranteed basic income (GBI) is the system most people are referring to when they talk about basic income in Canada. It is an income-contingent system, meaning monthly payments only go to families and individuals with lower income.

The CERB program was not, in fact, basic income, because there were conditions to qualify: Canadians were only eligible if they had earned at least $5,000 in the last year.

Because the cost of living varies across Canada, there’s no single income level that defines poverty. But Forget said generally, advocates have talked about setting guaranteed basic income at around $20,000 a year for a single person between the ages of 18 to 64.

In the 1970s, the province tested an annual wage for the working poor. What happened?

Countries around the world, including Spain, Namibia, Brazil and Iran, have experimented with basic income, mostly through pilot projects and trial runs.

In Canada, Manitoba ran a pilot project called Mincome from 1974 to 1978 in the rural community of Dauphin.

The idea was to test whether a no-strings attached wage would actually help the working poor by supplementing their income, or end up deterring them from working altogether.

Forget studied the outcomes of that project and found that participants were less likely to be hospitalized and more likely to continue their education.She said for the most part, basic income did not discourage people from working. One of the groups who worked less were new mothers who, in the 1970s in Manitoba, would have only been entitled to a few weeks of parental leave.

The other group that was disincentivized to work by basic income was young, unattached males. Forget discovered the reason those young men, often in their teens, were less likely to work was because basic income meant their families could afford to let them stay in school. Instead of dropping out to earn wages, they were able to get their high school diplomas.

“The fundamental idea behind basic income, I think, is solid,” she said.

“Unconditional money available to people allows them to make choices about their own lives, allows them to make better decisions about how to live their lives, and leads to better outcomes.”

More recently, Ontario introduced a basic income pilot project in 2017. Close to 4,000 people were enrolled and it was supposed to last three years, but was canceled early following the election of Doug Ford’s Progressive Conservative government. They said the program was too expensive.

A 2021 report by Canada’s Parliamentary Budget Officer found that, if the federal government created a national basic income program similar to Ontario’s, it would cost around $85 billion in 2021–2022 and cut poverty rates by almost half.

“It costs a lot, no question about it,” Forget said. However, she added that a lot of that cost would be balanced out by eliminating the programs basic income would replace, which might include income assistance or various refundable tax credits.

“A simplified process is always cheaper. It’s always more efficient,” she said.

What are the disadvantages?

In 2018, the government of British Columbia asked a panel of experts to study the feasibility of a basic income for the province. The resulting report found that “the needs of people in this society are too diverse to be effectively answered simply with a check from the government.”

Panel chair David Green, a labor economist and a professor at the Vancouver School of Economics at the University of B.C., said the better solution is to reform the programs that already exist.

“If our problem is really, the full heterogeneous, complex issue of poverty — how do we make a more just society — then, in many cases, sending people a check and hoping they will do better is not going to answer the problem,” Green said.

Green said it would be better to tackle issues head-on, targeting poor working conditions and low wages, reforming the disability assistance program and boosting rent assistance.

Still, others believe basic income is the right solution for Canada.

Two of the calls for justice in the final report from the National Inquiry into Missing and Murdered Indigenous Women and Girls said Canada should establish a guaranteed livable income for all.

One recent poll suggests nearly 60 per cent of Canadians support a basic income of $30,000. In another poll, 57 per cent of Canadians agree that Canada should create a basic universal income for all Canadians, regardless of employment.Despite the strong public support, Bellemare argued that, “A basic income would be an unfair, complicated, and costly way to eliminate poverty.” As a social scientist who has researched cash transfers, and an entrepreneur and organizational leader, we challenge the view that basic income is “unfair”, “complicated” and “costly.” Instead, we argue that it can be fair, simple and affordable.