The idea of a ‘guaranteed basic income’ for every Canadian in need has been around for years, but with the pandemic throwing millions of Canadians out of work, it has once again gained popularity.
It was recently suggested again by Canadian senator Yuen Pau-Woo
The idea is that the state would guarantee everyone below a certain income level would receive a minimum amount to ensure an income at least equivalent to the so-called poverty line in Canada. This level varies somewhat across the country due to cost of living expenses, for example in cities where housing costs are high, the amount would be adjusted compared to rural areas where housing costs are lower.
Such a federal plan would be similar to a pilot programme in Ontario which ran from April 2018 until cancelled in August. The programme provided $13,000 per year to individuals and $19,000 for couples. The success or failure of the programme was hotly debated with no clear answer due to the short-lived nature of the pilot project. That pilot involved only some 4,000 randomly selected individuals in four Ontario cities.
Senator Yuen Pau Woo, proposed the idea iin May and asked the Parliamentary Budget Office to draw up an estimate of costs (CPAC- Youtube)
Currently, with federal emergency government funding to help those who’ve lost their jobs, the idea would be to replace the variety of emergency and current social welfare programmes.
As the major emergency programmes will expire in October, the Parliamentary Budget Office was asked by a Canadian senator to explore costing for a guaranteed income.
Yves Giroux developed three scenarios for the six month period beginning when the current emergency programmes end. The scenarios involve a reduction of $0.50, or $0.25. or $0.15 for every dollar a recipient earns on their own above the low-income line. The payments would be up to 75 per cent of the low income level which is set at half the median income in Canada . Currently that level is $24,439 for single people, and $34,562 for couples.
The cost for a six-month GBI would be between $47.5 billion and $98.1 billion.
Partial detail of the costing for three scenarios developed by the PBO
Other factors include an additional $1.7 billion in supplement for those with disabilities, but there could be savings of about $15 billion federal and provincial tax credits for vulnerable groups which could be eliminated with a GBI.
However the PBO estimates do not include information income data from those in three territories, First Nations, or some military members.
The estimates also cannot be extrapolated to a full year of costs as the economy is slowly recovering and more people are going back to work meaning fewer people potentially need the benefit.
additional information-sources
- Parliamentary Budget Office: Costing a guaranteed basic income during the COVID pandemic
- iPolitics: J Lim: Jul 7/20: Six months of national basic income starting this fall would cost at least $47.5 billion
- Canadian Press (via Global) Jul 7/20: 6 months of basic income during coronavirus could cost Canada $98 B: PBO
- CBC: D.Curren: May 3/20: Pandemic proves its time for basic income for all, economists say
- Gov’t of Ontario-archived- Basic Income Pilot
- Maclean’s Magazine; GC Mason: Aug 10/18: Ontario’s scrapped basic-income project deeply flawed
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