Policy Update

Bill C-273 and Basic Income in Canada

April 18, 2021

Author

Holly Giacomodonato

Hi, my name is Holly and I am the author of this post. I want to state that I do not identify as an Indigenous person and I do not intend to speak on behalf of Indigenous communities. I am speaking from a position of privilege and power as a white-settler currently living on unceded Mi’kmaq lands. I hope to share the information I have found on this subject and bring attention to this issue affecting Mohawk and Haudenosaunee lands and peoples.

In February 2021 Bill C-273 was introduced to the House of Commons (1). The bill aims to support further research regarding guaranteed basic income in what is currently Canada and would require the Finance Minister to create a national strategy for a guaranteed basic income (1). Guaranteed basic income (GBI) is more of an idea than a specific policy: there are many different possible pathways and types of policies that can create a guaranteed basic income. GBI and universal basic income (UBI) are two terms that are sometimes used interchangeably. However, the defining characteristics of universal basic income are unconditional periodic and recurring payments to all members of the population (2). Meaning that payments come directly to each participant without request in regular intervals, whether or not an individual is currently working, and the funds can be used however the recipient wishes (2). A guaranteed basic income is similar except the payments are conditional. For example, some proposals for a GBI in Canada include a negative income tax so that as income from other sources increases the payments from the program are gradually reduced to zero (3). A GBI is considered more politically and economically feasible than UBI (3).

Historical Context

There has been waxing and waning interest in a basic income in what is currently Canada for decades. Between 1968 and 1980 there were five field experiments to study the impacts of an implemented basic income on economic and social factors in North America (4). The 1974-1979 MINCOME experiment in Manitoba was the only Canadian experiment during this time period (4). Winnipeg and the rural community of Dauphin were the two experimental sites of the project, and Dauphin, with a population of approximately 12,500 people, was the only saturation site in all of the North American experiments (4). This meant that every family in Dauphin was eligible to participate in the guaranteed basic income program where there was a base level of support for those who did not receive income from any other source and payments decreased with every dollar of income received from other sources (4). The data from the experiment suggests that the income security provided to the community of Dauphin increased grade 11 students’ likelihood of continuing with high school education to a rate higher than surrounding urban and rural areas (4). The data also show a decrease in hospitalization rates generally, and hospitalization rates for accidents, injuries, and mental health diagnoses, more specifically, declined during this time (4). A study on the impacts of the MINCOME experiment in Dauphin submits that a guaranteed basic income had community-level impacts on education and health outcomes in the community (4).

Current Context

Federalism arguably impacts every policy in what is currently Canada. Federalism refers to the defined and overlapping jurisdictions of provincial and federal governments as well as First Nations. In the case of a guaranteed basic income, federalism both creates the very issues that a GBI aims to address, as well as causes challenges for the implementation of a GBI moving forward. Within this system consisting of a patchwork of policies at the federal and provincial levels with gaps and overlapping pieces, it is difficult for the working poor and especially working-age low-income people without children to receive support (4, 3).
Federalism creates the challenge of working with multiple stakeholders in the creation of a GBI program. It is necessary for members of the federal government, provincial governments, and First Nations to be involved in creating a basic income for many reasons. Firstly, it is ethically important that representatives of communities that will be impacted are involved in decision-making and policy creation (3). Secondly, GBI is not affordable without the involvement of the federal government (3). GBI’s affordability rests partially on the replacing and streamlining of the current system of federal and provincial income security programs (3). Provincial governments and First Nations would also benefit from economies of scale if the federal government coordinates and implements the program (3). Lastly, it is important for GBI policy to be implemented consistently across the country to prevent low-income or high-income individuals from moving to a different jurisdiction to ensure or avoid participation in the program (3).
It is likely that a GBI policy, involving restructuring laws at various levels, would have to proceed quickly in order to avoid changes in political parties, and interest and will at various levels. For example, in 2017 the Ontario Wynne government started a basic income pilot program that involved 4,000 low-income people in the Hamilton, Thunder Bay, and Lindsay areas for the purpose of exploring impacts on health, education, housing, and job prospects (5). However, when the Ford government came into power they had different priorities and the program was cancelled in 2018 (6).
With the Covid-19 pandemic and the resulting economic downturn and loss of employment for many Canadians there is increasing interest, and perhaps increased political will, to implement a basic income in what is currently Canada. In fact, 77% of delegates attending the Liberal party’s 2021 policy convention voted in support of implementing a UBI program that would continue providing income payments similar to CERB (7). The pandemic has exposed the extent and risk of poverty in what is currently Canada, and the connections between poverty and health. In 2019 approximately 10.1% of Canadians, including a disproportionately large number of Black and Indigenous people and people of colour, live in poverty (8, 9). These low-income individuals are more likely to become infected with Covid-19 (10). A policy that promotes a guaranteed basic income can be a powerful tool to address inequalities, increase income security for all Canadians and improve community health outcomes.
 

Next Steps:

References

  1. 1: UBI Works. Canada’s First Basic Income Bill: C-273 [Internet]. Canada: UBI Works; c. 2021 Feb [cited 2021 Apr 07]. Available from: https://www.ubiworks.ca/basicincomebill
  2. Stanford Basic Income Lab. What is Basic Income? [Internet]. California: Stanford; c. 2019 [cited 2021 Apr 07]. Available from: https://basicincome.stanford.edu/about/what-is-ubi/
  3. Koebel K, Pohler D. Expanding the Canada Workers Benefit to Design a Guaranteed Basic Income [Internet]. 2019 [cited 2021 Apr 07] n.d.: 283-309. Available from: https://www.utpjournals.press/doi/pdf/10.3138/cpp.2019-016 doi:10.3138/cpp.2019-016
  4. Forget EL. The Town with No Poverty: The Health Effects of a Canadian Guaranteed Annual Income Field Experiment. Can Public Policy [Internet]. 2011 [cited 2021 Apr 07]; 37 (3): 283-305. Available from: https://www.utpjournals.press/doi/pdf/10.3138/cpp.37.3.283?utm_source=sootoday.com&utm_campaign=sootoday.com&utm_medium=referral
  5. Monsebraaten L. Ontario launches basic income pilot for 4,000 in Hamilton, Thunder Bay, Lindsay. Toronto Star [Internet]. 2017 Apr 24 [cited 2021 Apr 07]; Ontario:[about 1 p.]. Available from: https://www.thestar.com/news/ontario/2017/04/24/ontario-launches-basic-income-pilot-for-4000-in-hamilton-thunder-bay-and-lindsay.html
  6. Monsebraaten L. Basic income recipients feel shock, betrayal at Ford government’s surprise move to cancel pilot program. Toronto Star [Internet]. 2018 Aug 1 [cited 2021 Apr 07]; Queen’s Park:[about 2 p.]. Available from: https://www.thestar.com/news/queenspark/2018/08/01/basic-income-recipients-feel-shock-betrayal-at-ford-governments-surprise-move-to-cancel-pilot-program.html
  7. Tasker JP. Liberal delegates endorse a universal basic income, reject capital gain tax hike. CBC. [Internet]. 2021 Apr 10 [cited 2021 Apr 18];Politics:[about 6 p.]. Available from: https://www.cbc.ca/news/politics/liberal-universal-basic-income-1.5982862
  8. Statistics Canada. Dimensions of Poverty Hub [Internet]. Canada: Government of Canada; c. 2018 [updated 2021 Mar 23; cited 2021 Apr 07]. Available from: https://www.statcan.gc.ca/eng/topics-start/poverty
  9. Segal H, Forget E, Banting K. A Federal Basic Income Within the Post COVID-19 Economic Recovery Plan: An RSC Policy Briefing [Internet]. Ottawa: Royal Society of Canada; 2020 Oct [cited 2021 Apr 07]. 16 p. N.A. Available from: https://rsc-src.ca/sites/default/files/FBI%20PB_EN.pdf
  10. Goldstein A. Income emerges as a major predictor of coronavirus infections, along with race. The Washington Post [Internet]. 2020 Jun 22 [cited 2021 Apr 07];Health:[about 2 p.]. Available from: https://www.washingtonpost.com/health/income-emerges-as-a-major-predictor-of-coronavirus-infections-along-with-race/2020/06/22/9276f31e-b4a3-11ea-a510-55bf26485c93_story.html

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