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- Canada has been experimenting with universal basic income-style programs amid rising living costs.Basic income trials in Canada date back to the 1930s, with major projects in Manitoba.Like the US, current pilots in Canada show mixed results, causing debates on their economic impact.
As more basic income pilots and programs launch in the United States, Canada is following suit.
Recently, politicians in Canada have considered how to implement no-strings-attached money initiatives, especially as many citizens lost jobs during the pandemic and the cost of living has increased. These discussions have drawn on studies and trials dating back nearly a century.
As dozens of basic income programs in the United States spread, some leading policy experts have discussed whether these initiatives could be extended to a universal level. Other countries with basic income programs and experiments include Brazil, China, Germany, and India.
Advocates for universal basic income — which offers recurring cash payments to all individuals in a population, regardless of their socioeconomic status — say Canada has the resources to create a program that covers every citizen. While universal income would be on a universal scale across a population, basic income programs typically target lower-income or vulnerable populations.
Organizations in some provinces are testing what basic income could look like on a local level through guaranteed basic income pilots — recurring cash payments geared toward specific groups, like vulnerable populations. While many Canadian politicians across the political spectrum support basic income, some argue that these programs are costly to the local economy.
Support from residents, meanwhile, varies. About 60% of Canadians support guaranteed basic income, while 37% support universal basic income, according to a poll published in 2022 by the market research firm Narrative Research.
To be sure, cash payments can't replace full-time income or lift everyone out of poverty, but it can give many lower-income residents more opportunities to engage with the economy, said Sheila Regehr, a founding member and chairperson of the Basic Income Canada Network, an organization working to expand basic income access across the country.
"From a fiscally conservative perspective, that little bit of investment could save a ton of money down the road and get better results for everything," Regehr told Business Insider, referring to the initial expense and potential benefits of basic income. "This idea we had several generations ago to get a good job, stay in a company for life, that doesn't happen anymore."
Shortly after the pandemic began, talks about the efficacy of basic income in Canada accelerated. In 2020, 50 senators sent a letter to Prime Minister Justin Trudeau, Deputy Prime Minister Chrystia Freeland, and Finance Minister Bill Morneau commending them for their actions and calling for a minimum basic income. And in the last federal election in 2021, 189 candidates — representing 46% of Canada's electoral districts — pledged to support basic income.
Canada's Parliamentary Budget Officer found that between 2022 and 2023, a universal basic income would cost $87.6 billion but would cut poverty by at least 40% in nearly every province; the cost of poverty totals about $80 billion each year, the PBO estimates.
"We certainly have the capacity, there is no question that we do," Regehr said.
In 2021, Ontario Sen. Kim Pate introduced Bill S-233 and Winnipeg MP Leah Gazan introduced Bill C-233, creating the country's first national framework for a guaranteed livable basic income for people over the age of 17. Both bills are now under consideration in the Senate.
Canada, which has an Old Age Security pension, already has a version of basic income for older residents called the Guaranteed Income Supplement. The GIS is a monthly payment distributed to low-income pensioners aged 65 and older. The maximum monthly payment is $1,087 for someone who is single, divorced, or widowed.
"Getting a government check has no stigma to it here; it's just something that happens," Regehr said.
Canada's experiments with basic income
Basic income experiments in Canada are not new. Talk of implementing a basic income dates back to the 1930s in Alberta, though the first major experiment took place in Manitoba starting in 1974.
That project, called Mincome, was studied after completion, and researchers found that participants — who received $3,800, $4,800, or $5,800 a year through 1979 — on the whole continued to work and had higher secondary school graduation rates. Researchers also found that there was an 8.5% drop in hospitalizations for participants at the program's completion.
Four decades later, Ontario launched one of the biggest pilots in Canadian history, the Ontario Basic Income Pilot Project. The pilot, whose participants were mostly employed and lower-income, gave up to $16,989 annually for single participants aged 18 to 64 and $24,027 for couples. Ontario Premier Doug Ford's government canceled the pilot just 10 months after payments were first distributed.
Reasons for the cancellation included high costs and indications that the program didn't help people contribute enough to the economy. Still, interviews with participants after the pilot found that basic income helped them better afford necessities than traditional welfare payments and assisted in long-term financial planning.
A 2020 Canadian Centre for Economic Analysis study determined that a basic income could create 600,000 jobs and contribute $80 billion to Canada's economy in five years, potentially generating $400 billion in additional GDP during that period.
Current basic income programs in Canada
Various basic income and cash transfer pilots are ongoing, including in Newfoundland and Labrador for people between the ages of 60 and 64. Quebec has a basic income of $1,309 monthly for people with limited income, according to Quebec's government website.
Prince Edward Island, which recently hosted a conference on basic income, started its T-BIG pilot — the Targeted Basic Income Guarantee — in 2021 for over 600 people. The program gives cash to participants to bring them within 85% of the federal poverty level. Meanwhile, a few provinces, including Saskatchewan, have debated adopting a sovereign wealth fund that pays dividends similar to the Alaska Permanent Fund.
In 2021, the British Columbia Basic Income Panel created 65 recommendations for implementing targeted basic income programs for people with disabilities, young Canadians aging out of government care, and women escaping violence. However, the panel recommended overhauling certain social programs and suggested against a general basic income.
"We have concluded that moving to a system around a basic income for all as its main pillar is not the most just policy option," the report reads. "The needs of people in this society are too diverse to be effectively answered simply with a cheque from the government."
The province's New Leaf Experiment has seen promising results. In New Leaf's first rendition, launched in 2018, which gave $7,500 total upfront to 50 people experiencing homelessness with a control group of 65 people, participants did not increase spending on goods like drugs or alcohol and spent 99 fewer days unhoused, according to a research note on the pilot's outcomes. The pilot also helped participants with financial literacy and getting them proper IDs and paperwork. Results are forthcoming for another iteration, which started in 2022.
"The findings are that they work more hours, they get paid more per hour, and a lot of the individuals we're working with are accessing training," said Amber Dyce, CEO of Foundations For Social Change, a charitable organization that runs the New Leaf pilot. "By getting the cash transfer, they have more breathing room. They're trying to empower themselves to become more financially stable through employment."
