In the summer of 2017, 4000 low-income individuals living in Hamilton, Lindsay, and Thunder Bay were randomly selected to become part of the Basic Income Pilot, intended to test whether supplying a “basic income” was a better way to support people living in poverty vs the current system, which offers less than a living wage.
Within the program, participants will receive $17,000CA, before taxes and deductions, no strings attached.
Premier Kathleen Wynne announced the 3-year study in April 2017 during a speech in which she spoke to how the Liberal government plans to ensure all Ontarians, especially those in low-wage situations, benefit for the province’s balanced budget and improved economy.
“The project will explore the effectiveness of providing a basic income to people who are currently living on low incomes, whether they are working or not,” she said. “People participating in our pilot communities will receive a minimum amount of income each year — a basic income, no matter what.”
Single participants in the plan between the ages of 18 – 64 will receive up to $16,989 annually. Couples will receive up to $24,027 and people with disabilities will receive an additional $6,000.
To qualify, single people must earn less than $34,000 and couples must earn less than $48,000, according to the government.
The project is expected to cost $50 million/year and should help to determine whether a streamlined approach to delivering income support improves health, education, and housing outcomes for low-income individuals and those on social assistance. It is also anticipated that there will be a reduced drain on various social programs, like Ontario Works and ODSP, once individuals are provided a more liveable wage.
Similar experiments have been performed in the past, one of which occurring in the 1970s in Manitoba, which showed a drop in hospital use, particularly for mental health issues. There was also an increase in high school completion in the Dauphin test community.
Social Services Minister, Helena Jaczek, states that since about 70% of low-income Ontarians are working, the government expects a similar proportion of participants to be working or self-employed.
The province’s low-income measure, or poverty line, is about $22,653 and the basic income pilot represents 75% of that.
Participants in the pilot project will be able to increase their total income through work or self-employment, however, any additional income would decrease their basic income payment by 50 cents with every dollar they earn.
For instance, a single person earning $10,000 a year from a part-time job would receive an additional $11,989 in basic income ($16,989 minus $5,000) for a total income of $21,989, according to the government.
A basic income pilot for First Nations people is being developed in collaboration with community partners was set to be announced by the end of 2017, but as of this writing, no such plan had yet to be set in place.
NDP Leader Andrea Horwath has always been behind the idea of the plan, however, she wondered why the Liberal government set the basic income below the poverty line.
“I’m very, very worried that the government puts a pilot project in place that doesn’t even meet the basic (needs) of people,” she told reporters Queen’s Park.
Adding “How do you bring people out of poverty when you’re not even giving them a basic income that meets the poverty line.”
One other perk is that individuals on social assistance will be able to keep their drug cards and other benefits, but Employment Insurance and Canada Pension Plan payments will be deducted from the basic income, dollar for dollar.
Advocates for those with mental health issues were pleased the pilot will measure health outcomes.
“There is a link between income and health,” said Camille Quenneville, of the Canadian Mental Health Association, Ontario division. “Those with lower incomes generally report poorer physical and mental health than those in the higher income.”
“Nearly half of all people receiving benefits from the Ontario Disability Support Program live with a mental illness”, she added.
Anti-poverty activists said the government must ensure prospective participants currently living on social assistance fully understand the trade-offs involved in exchanging their welfare cheque for a basic income.
Jennefer Laidley of the Income Security Advocacy Centre, a legal clinic that advocates for people on social assistance states, “each person will have to be well informed about the possibility of losing access to other important benefits they might currently receive,” she said, adding every person’s situation will be different.
The most pressing issue, besides reforming the entire system, Laidley said, is that everyone on social assistance needs a significant increase in their benefits now.
“The basic income pilot cannot be a reason for government to delay making immediate investments to improve the lives of people they know are living on meagre, sub-poverty incomes.” she said. “I’m hoping we’ll see that kind of investment in the budget on Thursday.”
Ontario is among several areas in the world currently experimenting with the idea of a minimum or basic income, including Finland, which began a two-year pilot in January. Kenya, the Netherlands and Scotland are also considering a test.