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Basic Income

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Provincial adviser proposes basic income of least $1,320

Hugh Segal, Ontario’s special adviser on basic income, wants province to test the merits of boosting incomes for the working poor and replacing social assistance with no-strings attached payments.

It has been hailed as the magic bullet to end poverty and denounced as a Trojan Horse to dismantle the social safety net.

But there has been little serious research to prove either position. Until now.

Ontario is poised to become ground zero for what may be the largest pilot project yet to test the notion of a basic income in North America.

In a discussion paper released Thursday, Ontario’s special adviser on basic income suggests topping up incomes of the working poor and replacing the province’s meagre and rule-bound social assistance program with a monthly payment of at least $1,320 for a single person, or about 75 per cent of the poverty line.

Participants with disabilities would get an additional $500 a month, according to the proposal by Hugh Segal, a former Conservative senator and a longtime advocate of basic income, also known as guaranteed annual income or minimum income.

The no-strings-attached payments for adults between the ages of 18 and 65 would be non-taxable and participants would be allowed to keep a portion of any additional income earned through employment.

“The pathologies of poverty are not limited only to those on social assistance,” Segal said in an interview. “The pathologies of poverty, illness, early hospitalization, bad educational outcomes and early drop-outs exist for everybody beneath the poverty line.”

Ontarians are being invited to give their views on Segal’s proposal online and in one of 15 public consultations between now and the end of January. The government will release a final report on the consultations and introduce a plan for the pilot by April, 2017. Funding for the pilot will be based on how the program is designed, according to government officials.

About 15 per cent of Ontarians live below the province’s Low Income Measure (LIM), which is almost $22,000 for a single person and about $44,000 for a family of four, after taxes.

A single person on Ontario Works currently lives on about 45 per cent of the LIM, or about $700 a month, while a person relying on the Ontario Disability Support Program receives about $1,130.

Although Segal does not say where in Ontario the proposed three-year experiment should take place, or how many people should participate, he says the pilot should include a “randomized control trial” in a large urban centre as well as three “saturation sites” where everyone living in poverty would be included. He suggests a city or town in both northern and southern Ontario along with a First Nations community should be tested.

Participation would be voluntary and no one would be financially worse off as a result of the pilot, Segal says in his report titled, “Finding a Better Way: A Basic Income Pilot Project for Ontario.”

The trial would measure health and education outcomes, food security, life choices, such as the decision to have children, living arrangements and parenting time, employment status, hours worked and income earned and participants’ perceptions of citizenship and inclusion.

It would also examine how a basic income impacts employment insurance, provincial and federal child benefits and other social programs.

“Testing a basic income is a humane and useful way to measure how so many of the costs of poverty (in terms of productivity, health, policing, and other community costs, to name only a few) might be diminished, while poverty itself is reduced and work is encouraged,” Segal says in the report.

Ontario spends about $9 billion a year on social assistance, excluding costs to the health care, education and legal systems produced by the effects of poverty, Segal notes.

The pilot should help Ontario determine if a basic income can build on other government initiatives, such as increases in the minimum wage, improvements to the Ontario Student Assistance Plan (OSAP) and the Ontario child benefit to cut the depth and incidence of poverty in the province, he adds.

The Wynne government signaled its intention to launch a basic income pilot in this year’s spring budget. Community and Social Services Minister Helena Jaczek appointed Segal in June to prepare a design and implementation plan.

Other countries such as Finland, the Netherlands and Kenya are developing their own pilot projects to test the idea. And a California technology company is planning a five-year project. But in a referendum last summer, Switzerland rejected a universal basic income of about $3,300 a month out of fears it would bankrupt the country and encourage idleness.

Canada explored the concept in the late 1970s when Dauphin, Manitoba tested a “mincome” for low-income residents, set at 60 per cent of the poverty line. Results showed a drop in hospital admissions and mental health problems, an increase in high school completion among young men and little impact on residents’ attachment to work.

Segal says the idea is gaining worldwide attention because globalization and technological advances are leaving large sectors of the population behind.

Although many anti-poverty activists support investigating the idea of a basic income, some view the proposed pilot project and government consultations as more delay in their quest to raise welfare rates which currently lock almost 895,000 Ontarians in deep poverty.

“This government’s track record of studying poverty, reviewing poverty, consulting on poverty and making empty promises to reduce it suggests nothing will be different this time,” said Mike Balkwill of Put Food in the Budget.

“Lack of specificity about how long the basic income pilot will run conveniently provides an additional excuse for the Liberal government to hold off on significant increases to social assistance rates in the 2017 budget, or even before the next provincial election,” he added.

However, Jennefer Laidley of the Income Security Advocacy Centre, a legal aid centre that advocates for those on social assistance said Segal’s report “opens up a critical conversation about how we ensure everyone in Ontario has enough to support themselves and their families and how government programs should treat people with dignity.

“There’s no magic bullet,” she said. “So it’s key that government is now exploring various solutions — reforming existing social assistance programs, improving the quality of work, and considering basic income.”


Ontario Seeking Input on Basic Income Pilot

Province Launching Consultations on Innovative Way to Deliver Supports

Ministry of Community and Social Services

Ontario is seeking public input to help inform the design of a basic income pilot, which is an innovative new approach to providing income security.

The pilot would test whether a basic income is a more effective way of lifting people out of poverty and improving health, housing and employment outcomes. Through the consultations, Ontario is seeking input from across the province, including from people with lived experience, municipalities, experts and academics. The province will also work with Indigenous partners to tailor a culturally appropriate engagement process that reflects the advice and unique perspective of First Nations, urban Indigenous, Métis and Inuit communities.

The province is consulting on key questions, including: who should be eligible, where the pilot should take place, what the basic income level should be and how best to evaluate it. The consultations will be guided, in part, by a discussion paper by the Hon. Hugh Segal, Finding a Better Way: A Basic Income Pilot Project for Ontario, and will run from November 2016 to January 2017. People can participate by:

Exploring innovative ways to deliver supports and services is part of our government’s plan to create jobs, grow our economy and help people in their everyday lives.

Quick Facts

  • Finland, the Netherlands and Kenya are also looking at developing pilot projects that test the idea of a basic or guaranteed annual income.
  • Y-Combinator, a California technology company has announced it will be piloting a Basic Income project that is expected to run for five years.
  • The government will prepare a final report on what we heard during the consultations, and introduce a plan for the pilot by April, 2017.
  • Organizations interested in hosting their own basic income pilot consultations can go to ontario.ca/basicincome for the consultation guide.

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