What Is Basic Income?
Basic income is a simple idea — a guaranteed cash transfer (income) granted universally and unconditionally to ensure, at a minimum, that no adult or child lives in poverty.
This video is a nice introduction to basic income.
Basic income in Canada isn’t new. During the 1970s, a basic income was pilot tested in Manitoba. At the time it was widely believed that a universal basic income program, similar to universal healthcare, would eventually be implemented across Canada. Changes in both the provincial and federal governments led to the temporary shelving of the idea. Since then, Canadians nation-wide have advocated for a basic income, including politicians from across the political spectrum. Basic income is supported by organizations such as the Canadian Medical Association and Canadian Association of Social Workers to address the upstream factors of poor health — poverty and socio-economic inequality.
Principles of Basic Income
Universal and Unconditional
- One of the core principles of basic income in Canada is that it is universal and unconditional. That means it applies to everyone, all the time. It isn’t dependent on work. It provides enough to ensure that all Canadians can stay out of poverty.
- There are gaps in our social safety net. Not just homelessness, but thousands of working poor who still live beneath the poverty line. There are those who live on disability programs that simply don’t provide enough to live on, and students taking on record levels of debt. Despite interventions like the Child Tax Credit, child poverty persists 25 years after Canada promised to end it. Our existing social safety net isn’t a functional solution. Canadians need something more effective, more efficient, and more sustainable — basic income.
Dignity and Respect
- Dignity and respect should be core principles for any form of support. However, current income support systems like Ontario Works and Ontario Disability Support Program are intrusive, disempowering, and punishing, on top of being expensive to administer and simply ineffective — poverty in Ontario has been rising since the 1980s.
The universality and unconditionality of basic income is a better solution for the wide range of Canadians living without necessary income. It isn’t means-tested and is minimally intrusive. It is the income support that makes sense if we believe all Canadians deserve to be treated with dignity and respect.
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Basic Income is a Better Way
Explore our brochure to learn why basic income is Canada’s next great social program.
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What is a basic income guarantee?
It is an alternative income-support program where the government pays money on a regular basis to individuals to ensure that no one’s income drops below the minimum needed to provide an adequate standard of living. A basic income guarantee can achieve many purposes, including providing income security, reducing poverty, stimulating the domestic economy and fulfilling Canada’s obligations under the Universal Declaration of Human Rights. Other names for basic income guarantee include guaranteed annual income, universal basic income, guaranteed livable income and citizens’ dividend.
How much would it pay?
To achieve maximum benefit, the amount paid must be enough to provide an adequate standard of living as defined by the Universal Declaration of Human Rights. The benefit amount should allow recipients without other income to live a simple lifestyle with dignity, be healthy and participate in their community. It must also be low enough to motivate people to work to afford a higher standard of living. It could be set to one of Statistics Canada’s unofficial poverty lines, for example, the low income cut-off (LICO) or low-income measure (LIM), so that it is adjusted regularly.
Wouldn’t everyone stop working?
Experiments conducted around the world show that when people with low incomes are given unconditional cash transfers, any reduction in work hours is generally small. New parents stay home longer with their babies, teens stay in school longer and people who are unemployed spend longer looking for the right job. Sometimes hours worked increase as recipients start or expand a small business.
People work for two main reasons: they have a strong urge to do something constructive with their talents, and they want a good standard of living. A basic income guarantee paying a poverty-line benefit would not change this.
Such a drastic change would require cooperation from all three levels of government. Is this likely to happen?
It has happened before. In the late 1930s, the provinces and federal government cooperated to change Canada’s constitution to allow a federal unemployment insurance program to be implemented, eventually resulting in the Employment Insurance program we have today. The same thing happened again in 1951 to create what is now Old Age Security. More recently, the federal government collaborated with the provinces, territories and First Nations to create the National Child Benefit Supplement (part of the Canada Child Tax Benefit), a program that is very much like a basic income guarantee.
How would it work?
It would be a federal program administered through the income tax system. Anyone who files an income tax return could be eligible to receive the benefit. It would replace some of the income-support programs we have now, including ones such as social assistance that are aimed at reducing poverty. It could also replace many existing tax credits. It would be supplemented with other programs such as housing, employment, disability and health care supports. No conditions would be attached to receiving the money, and there would be no requirement to work or look for work.
How would it be paid for?
The funds needed to pay for a basic income guarantee could come from a number of sources. The costs of eliminated programs would be recouped. Savings would be realized in health care and corrections as poverty rates drop. An investment fund could be created to direct royalties from resource extraction to the populace, as with the Alaska Permanent Fund. The income tax system could be reformed to make it simpler and more progressive, or new taxes, including a carbon tax, Tobin tax, etc., could be introduced.
What’s wrong with our current system?
Canada’s economy is not doing a good job of providing secure, adequate incomes for enough people, and our current system of income supports is not providing a reliable safety net to prevent people from suffering hardship. Income insecurity and poverty prevent people from investing in their future, reaching their full potential and participating fully in their community and in the economy.
This kind of program has been proposed before but never adopted. Why would this time be any different?
All previous proposals have been initiated by high-level politicians and bureaucrats without public involvement. This time is different. This campaign is founded on a grass-roots movement to build a broad base of public support, which is crucial in influencing policy makers. Economic conditions are changing, highlighting the shortcomings of our current system.