Canada is considering a guaranteed universal basic income program. Here’s what that means.
Canada is taking its baby steps toward a basic income program meant to broadly address poverty.
The Senate’s national finance committee began looking into Sen. Kim Pate’s proposal for a national framework for a universal basic income program on Oct. 17. Since as far back as the 1970s, Canada has flirted with the idea of a basic income program.
The push for a basic income program gained more momentum during and after the COVID-19 pandemic, as the Canada Emergency Response Benefit (CERB) — which paid out $2,000 a month to millions of Canadians — raised the possibility of a permanent income program.
Universal basic income (UBI)
Now that there’s movement within the federal government on studying basic income as a real possibility, here’s a rundown of what guaranteed basic income is, how it works and what it might look like.What is universal basic income?Universal basic income (UBI) is what it sounds like — a payment from the government that everyone would receive, no matter an individual’s income level or need.Most modern conceptions of UBI don’t conform to its literal meaning anymore, Michael Mendelson, a fellow with the poverty policy think tank Maytree, told the Star.
Nowadays, UBI has come to mean any kind of basic income plan, which usually takes the universal form or a “guaranteed” income plan that scales depending on a person’s need.What is the basic income plan that Canada is looking into?
The Senate bill proposes a guaranteed “livable basic income” for anyone in Canada over the age of 17, including temporary workers, permanent residents and refugee claimants. The proposed basic income framework wouldn’t replace or decrease existing health or disability benefits.
How much would a basic income program cost?
In April 2021, the Parliamentary Budget Officer Yves Giroux estimated a guaranteed basic income program that provided nearly $17,000 per year for low-income households would cut poverty rates in half, but would cost the federal government $85 billion.
Has Canada tried a universal basic income program before?
While a national basic income program hasn’t been officially implemented before, provincial governments have tested the waters of giving cash to citizens without any strings attached.
From 1974 to 1979, the government of Manitoba sponsored a guaranteed basic income experiment across the province, but most attention is focused on the town of Dauphine. There, the “Mincome” project, guaranteed every household a minimum income — meaning if no one in the household worked they received the maximum amount from the government, with a reduced rate for every dollar pulled in by the household.
hospitalizations, particularly for mental health issues
Nearly 30 per cent of the town qualified for “mincome,” as the benefit was called. A recent study from 2018 found that hospitalizations, particularly for mental health issues, declined and more teenagers stayed in school longer during the experiment in Dauphine.
In 2017, Ontario, under then-premier Kathleen Wynne, launched a basic income pilot in Hamilton, Thunder Bay and Lindsay.
following a landslide election in 2018.
The project was meant to target 4,000 low-income people in the target region, giving them up to $17,000 annually over three years, but the pilot program was shut down once Premier Doug Ford took over the government following a landslide election in 2018.
Quebec launched its own basic income program at the beginning of 2023. The province will pay a base amount of $1,211 a month to Quebecers with “severely limited capacity for employment,” and those receiving the benefit can earn up to $14,532 a year without having their benefit reduced.
Would a basic income program work in Canada?
If CERB or any of the other basic income pilot programs have taught us anything, it’s that Canada has the “administrative capacity” to deliver a basic income program, according to Mendelson.
But the government shouldn’t just redo CERB, Mendelson added. The debate over basic income programs is mainly one of “how best to address poverty in a sustainable way, that’s most effective in reaching people who need it.”
