A pilot project is set to launch in Ontario in April 2017 to test the potential benefits of a basic income program.
Former Conservative senator and long-time advocate for basic income Hugh Segal released a discussion paper for the three-year pilot in which he suggests the government should pay participants $1,320 per month, giving an extra $500 to those with disabilities.
Basic income is a no-strings-attached payment system for all residents, to help those struggling to make ends meet by providing a guaranteed income regardless of their financial position.
Segal suggested in the report that the Ontario government’s basic income pilot should be tested in a community in Northern and Southern Ontario, as well as an Indigenous community “with provisions that are culturally appropriate and acknowledge the unique circumstances of First Nations peoples in the context of government income support programs.”
Richard Pereira, an economist and co-developer of the Canadian chapter of the Basic Income Earth Network, said current financial aid systems cost the public more than they’re worth because of their extensive application processes and layers of administration.
“In the current system, you have to prove you’re poor,” he said. “You might have to show up in person, you might have to go to an appeal.”
Pereira said basic income would solve these issues.
“These bureaucratic costs can simply go towards giving the money directly to the people who need it, and it will be cheaper in the end,” he said.
Other than these provincial income-based programs, basic income will not replace any other sort of social assistance programs. David MacDonald, an economist with the Canadian Centre for Policy Alternatives, said this is important when looking at how basic income may or may not impact students.
In his study, titled “A Policy Maker’s Guide to Basic Income,” MacDonald suggests basic income may not be the most beneficial system to those under the age of 30—the age group which is the most physically capable and tends to work the most.
“The problem is they’re making more money out of the gate compared to other age groups who are below the income line,” he said in an interview. “So because they’re making more money, they end up with bigger clawback rates on a basic income.”
Instead, he said increasing minimum wages or focusing on decreasing youth unemployment may be more beneficial to the student age group. He said those falling between the ages of 30 and 55 may benefit the most since they’re too old for youth and child benefits, and too young for senior benefits.
“Ideally, you would create a program where nobody is worse off, and everyone is better off,” MacDonald said.
But Pereira said basic income would provide people with the security to make job decisions based on their own interests, rather than fear of not being able to make ends meet.
“A decent basic income has the effect to allow for all possibilities. Maybe you don’t want to attend post-secondary education,” he said. “It kind of broadens your options.”
This will be the second basic income pilot project in Canada, following a test in Manitoba in the 1970s. The results showed decreased hospitalizations, less high school dropouts, and little association with a decrease in work ethic.
“Health professionals are increasingly recognizing that people who are coming in to doctors’ offices are increasingly there because of poverty issues,” Pereira said in reference to the study. “The benefits are undeniable.”
