Ontario’s basic income experiment

Last week Ontario’s government took on an ambitious project to find out if there might be a better way to address issues tied to poverty and income assistance.

Premier Kathleen Wynne announced a three-year pilot project to test a guaranteed basic income for 4,000 low-income people living in three communities. This basic income (about $17,000 for a single adult) would replace current social assistance payments with no strings attached or disincentives tied to getting work or attending school.

The amount, while not extravagant, is considerably more generous than the current maximum of $8,510 a single adult on social assistance in Ontario can receive. Certainly enough to make a big difference for those struggling to get by.

In Ontario’s pilot, if recipients secure work, they will keep what they make from their job but will see their guaranteed income decrease by half their earnings. Ie: a person earning $10,000 at a job would see a $5,000 decrease in their basic income payment.

In the past few years, a growing number of people have advocated for change in our approach to poverty. Proponents of a guaranteed income program say this kind of system would lower administrative costs by working through the income tax system and bring positive results on several fronts.

Guaranteed income is not a new idea – it was tried in Manitoba in the 1970s and research into its health effects found even modest income security decreased hospital visits by 8.5 percent and significantly lowered doctor visits and mental health issues among those participating.

Academics say the Ontario pilot gives us a chance of learning how this kind of system will work in a changing economy. Many believe it will be of most benefit to the working poor.

We also have a similar system in place in Canada for seniors. When this was implemented, it made a significant improvement in poverty rates among the elderly in Canada. We now have some of the lowest poverty rates for this age group compared with some of the highest for child poverty.

We know poverty is likely the single biggest predictor of health – so anything we can do to address and reduce poverty, will pay dividends when it comes to improved health outcomes and less burden on our health system.

I am very encouraged to see a provincial government taking this kind of initiative and look forward to following the program and hearing whether it lives up to potential. 

 

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