The Canadian province of Ontario is pushing forward with plans for a trial run of universal basic income, making it the first government in North America in decades to test out a policy touted as a panacea to poverty, bloated bureaucracy and the rise of precarious work.
In the coming weeks, the provincial government is expected to announce consultations to hammer out the details of a C$25m pilot project, with the aim of formally launching it in spring 2017.
The government’s foray into basic income began earlier this year when it tasked Hugh Segal, a Conservative political strategist and longtime advocate of the idea, with exploring potential directions for a pilot project.
“This is not something which is in any way, in my view, the precinct of the left,” Segal said in an interview. “It is in fact the precinct of rational people when looking to encourage work and community engagement and give people a floor beneath which they’re not allowed to fall.”
Canadians’ embrace of the idea can perhaps be traced to Dauphin, a small farming town of 10,000 people in Manitoba that was once home to one of North America’s largest and most ambitious experiments in basic income.
In 1974, about 1,000 residents began receiving monthly payments with no strings attached. The pilot, a joint effort by the federal and provincial government, set the stipend at around 60% of Statistics Canada’s poverty threshold, translating to roughly C$16,000 a year in today’s dollars for a single person. For every dollar earned from other income sources, 50 cents were scaled back from the monthly payment.
Hospitalisations, accidents, injuries and mental health issues had all declined when the stipend was flowing into the community. Data from Dauphin showed little change in residents’ work habits, save for new mothers who took longer maternity leaves and teenage boys who were more likely to stay in high school. For many residents, basic income was seen as a source of stability, buffering them from financial ruin in the case of sudden illness, disability or unpredictable economic events.
A guaranteed income could allow workers to regain the upper hand, enabling them to reject low paying or insecure jobs or choose to devote their time to traditionally unpaid work such as care and community support. The cost savings for governments in the long run could be substantial.