You are here

Ontario to test basic income guarantee

Category: 

TORONTO—A single paragraph buried in the Ontario budget could mean big changes in the lives of some of the province’s most impoverished residents by giving them a guaranteed minimum income.

Last month’s provincial budget promised a pilot project to test “that a basic income could build on the success of minimum wage policies and increases in child benefits by providing more consistent and predictable support.”

The concept is on the radar of the federal Liberals, too—a Liberal-dominated parliamentary committee called on the Trudeau government to explore the concept of guaranteeing people a minimum income in a pre-budget report tabled Friday.

Charles Sousa, Ontario’s finance minister, said the province has not decided which community will be the test site for a basic income guarantee.

“It’s something that many people seem to have an interest in us testing out, so we’re looking at something in the fall,” he noted.

“Other jurisdictions are using it, and I want to see if it makes sense for us, so it’s important for us to pilot, to test it out, and see what happens.”

Proponents say a guaranteed minimum income, which would see families living below the poverty line topped up to a set level, would be more efficient and less costly than administering the existing series of social programs that help low-income residents.

They also say poverty is one of the biggest determinants of health, and a guaranteed minimum income could mean reduced health-care costs.

“Poverty costs us all. It expands health-care costs, policing burdens, and depresses the economy,” Sen. Art Eggleton said last month as he called for a national pilot project of a basic income guarantee.

About nine percent of Canadians live in poverty, but the numbers are much higher for single mothers and indigenous communities.

If Ontario’s basic income pilot project is designed correctly, it could help eliminate some of the “perverse incentives” that institutionalize poverty, said Danielle Martin, vice-president of Women’s College Hospital in Toronto.

“We want to design programs that will give people who need it income security, but will not discourage them from entering the workforce,” she noted.

“And it’s entirely possible, if we design this pilot right, that we can actually have a major impact on the health outcomes for some of the most vulnerable people in the province, and that can save tremendous amounts of money in the health-care system down the road,” Martin added.

Canada experimented with a guaranteed minimum income in Dauphin, Man. in the early 1970s.

The so-called “Mincome” project found it did not discourage people from working, except for two key groups: new mothers, and teenaged boys who opted to stay in school until graduation.

The project also found an 8.5 percent reduction in hospital visits in Dauphin during the experiment, noted Martin.

“People had fewer visits because of mental health problems,” she said.

“There were fewer low birth-weight babies so very concrete and immediate impacts in terms of people’s health.”

The Income Security Advocacy Centre said care must be taken to ensure no one is worse off as a result of the Ontario pilot for a basic income guarantee.

Twitter icon
Facebook icon
Google icon
LinkedIn icon
Pinterest icon
Reddit icon
e-mail icon