Parliamentary Budget Officer Yves Giroux waits to appear before the Commons Finance committee on Parliament Hill in Ottawa, Tuesday March 10, 2020. THE CANADIAN PRESS/Adrian Wyld

Parliamentary Budget Officer Yves Giroux waits to appear before the Commons Finance committee on Parliament Hill in Ottawa, Tuesday March 10, 2020. THE CANADIAN PRESS/Adrian Wyld

Parliamentary budget officer says basic income program could halve poverty rate

The study, which federal officials monitored closely, was ended early with a change of government in Ontario

The federal government could cut poverty rates by almost half in one year if it launched a basic income similar to one previously studied in Ontario, the parliamentary budget officer says.

Although nationally the drop in poverty rates under such a measure would be about 49 per cent, the reductions would vary across provinces.

Budget officer Yves Giroux estimated that poverty rates could fall as much as 61.9 per cent in Manitoba or as little as 13.5 per cent in Newfoundland and Labrador if the federal government instituted the program.

At its core a basic or guaranteed income provides a no-strings-attached government benefit to citizens to provide each with a minimum amount of earnings.

Four years ago, Ontario began studying the effects of providing people with enough money to be about three-quarters of the way to the poverty line, and rolling back payments for every dollar of earnings.

The study, which federal officials monitored closely, was ended early with a change of government in Ontario.

Giroux said a federal program modelled on what was set up in the Ontario experiment would cost an estimated $85 billion if implemented this fiscal year, rising to over $93 billion by 2026.

The budget officer’s report released Wednesday updates his projections from last summer about the cost of a basic income program, and details the financial ripple effect across households and workers.

Driving the work were questions from parliamentarians about the effects of a basic income program, which has picked up political traction over the last year as the COVID-19 pandemic put the economy into a tailspin. At its worst, the pandemic cost the country about three million jobs and reduced hours and incomes for 2.5 million more.

The grassroots of the Liberal and New Democratic parties have put forward resolutions at their respective policy conventions to make a basic income a core policy. Although it may win approval when New Democrats gather, the Liberals are split on the proposal, with Prime Minister Justin Trudeau said to still be less-than-enthused with the idea.

Had there been in place a basic income program like the one Giroux modelled, the government would have paid about $17,000 to a single person, or $24,000 for a couple, and then taken off 50 cents for every dollar earned as incomes rose from there.

For the most part, Giroux estimated, disposable income would rise for those at the bottom of the income scale by 17.5 per cent, or just over $4,500, while those higher up the earnings scale would see their incomes drop slightly.

The reason for the drop would be another caveat in the modelling, that the federal government would remove refundable and non-refundable tax credits aimed at fighting poverty.

Overall, Giroux’s report said more than 6.4 million people would see their disposable income rise as a result of a basic income program, on average by 49.6 per cent, while 16.8 million more would have their net income fall by 5.4 per cent.

Giroux’s report also said that the interaction between tax rates, elimination of credits and earnings as part of basic income would make some workers rethink taking on additional employment hours if it meant losing income through a combination of paying more taxes and receiving fewer benefit dollars.

He estimated that overall, employees would reduce their hours worked by 1.3 per cent nationally, which would cost federal coffers between $3 billion and $3.3 billion annually over a five-year stretch due to lost revenues.

Jordan Press, The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Elvira D’Angelo, 92, waits to receive her COVID-19 vaccination shot at a clinic in Montreal, Sunday, March 7, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
110 new cases of COVID-19 in Interior Health

Provincial health officers announced 1,005 new cases throughout B.C.

Tala MacDonald, a 17-year-old student at Mount Sentinel Secondary who is also a volunteer firefighter, has won the $100,000 Loran Scholarship. Photo: Submitted
West Kootenay student wins $100K scholarship

Tala MacDonald is one of 30 Canadians to receive the Loran Scholarship

Kristian Camero and Jessica Wood, seen here, co-own The Black Cauldron with Stephen Barton. The new Nelson restaurant opened earlier this month while indoor dining is restricted by the province. Photo: Tyler Harper
A restaurant opens in Nelson, and no one is allowed inside

The Black Cauldron opened while indoor dining is restricted in B.C.

First-year Selkirk College student Terra-Mae Box is one of many talented writers who will read their work at the Black Bear Review’s annual (virtual) launch on April 22. Photo: Submitted
Interior Health nurses administer Pfizer-BioNTech COVID-19 vaccines to seniors and care aids in Kelowna on Tuesday, March 16. (Phil McLachlan/Kelowna Capital News)
69 new cases of COVID-19 in Interior Health

The total number of cases in the region is now at 9,840 since the pandemic began

Jake the service dog is trained to give calming hugs to his caretaker and handler, Rae-Lynee Dicks, who lives with post-traumatic stress disorder. Photo: Laurie Tritschler
Jake and Rae-Lynne: The story of a Grand Forks woman and her service dog

Jake is on his way to completing his training, but it’s been difficult to socialize him in the pandemic

A syringe is loaded with COVID-19 vaccine at a vaccination clinic run by Vancouver Coastal Health, in Richmond, B.C., Saturday, April 10, 2021. THE CANADIAN PRESS/Jonathan Hayward
B.C. to open up COVID vaccine registration to all B.C. residents 18+ in April

Registration does not equate to being able to book an appointment

(Black Press file photo).
Multiple stabbings at Vancouver Island bush party

Three youths hospitalized after an assault in Comox

Selina Robinson is shown in Coquitlam, B.C., on Friday November 17, 2017. British Columbia’s finance minister says her professional training as a family therapist helped her develop the New Democrat government’s first budget during the COVID-19 pandemic, which she will table Tuesday. THE CANADIAN PRESS/Darryl Dyck
B.C. finance minister to table historic pandemic-challenged deficit budget

Budget aims to take care of people during pandemic while preparing for post-COVID-19 recovery, Robinson said

Each spring, the Okanagan Fest-of-Ale is held in Penticton. This year, as a result of the COVID-19 pandemic, the festival will not be held. However, beer is still available. How much do you know about this beverage? (pxfuel.com)
QUIZ: How much do you really know about beer?

Put your knowledge to the test with this short quiz

Lord Tweedsmuir’s Tremmel States-Jones jumps a player and the goal line to score a touchdown against the Kelowna Owls in 2019. The face of high school football, along with a majority of other high school sports, could significantly change if a new governance proposal is passed at the B.C. School Sports AGM May 1. (Malin Jordan)
Power struggle: New governance model proposed for B.C. high school sports

Most commissions are against the new model, but B.C. School Sports (BCSS) and its board is in favour

Pall Bearers carrying the coffin of the Duke of Edinburgh, followed by the Prince of Wales, left and Princess Anne, right, into St George’s Chapel for his funeral, at Windsor Castle, in Windsor, England, Saturday April 17, 2021. (Danny Lawson/Pool via AP)
Trudeau announces $200K donation to Duke of Edinburgh award as Prince Philip laid to rest

A tribute to the late prince’s ‘remarkable life and his selfless service,’ the Prime Minister said Saturday

B.C. homeowners are being urged to take steps to prepare for the possibility of a flood by moving equipment and other assets to higher ground. (J.R. Rardon)
‘Entire province faces risk’: B.C. citizens urged to prepare for above-average spring flooding

Larger-than-normal melting snowpack poses a threat to the province as warmer weather touches down

Vancouver-based Doubleview Gold Corp. is developing claims in an area north of Telegraph Creek that occupies an important place in Tahltan oral histories, said Chad Norman Day, president of the Tahltan Central Government. (THE CANADIAN PRESS/HO)
B.C. Indigenous nation opposes mineral exploration in culturally sensitive area

There’s “no way” the Tahltan would ever support a mine there, says Chad Norman Day, president of its central government

Most Read