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

Allen, Mel, and Trevor Leung pose on the Whitecaps field in Vancouver. (Special to The News)
Community rallies to support Maple Ridge man suffering from paralysis, kidney issues

GoFundMe set up to help Allen Leung and his family during difficult times

Tori Peterson was named Pitcher of the Week in the NCAA Ohio Valley Conference. (Facebook/Eastern Kentucky University)
Pitt Meadows pitcher shining in the NCAA

Tori Peterson wins accolades during a great season

Maple Ridge artist Renato Muccillo works on a piece called Flotilla that will be on display at his solo exhibition Scene/Unseen. (Special to The News)
Solo show at New York Gallery for Maple Ridge artist

Renato Muccillo’s paintings highlight Maple Ridge and Pitt Meadows landscapes

The Greater Vancouver geographic distribution of COVID-19 cases for the week of April 4-10, from the BC Centre for Disease Control.
Week sees 217 cases of COVID-19 in Maple Ridge, Pitt Meadows

Fraser Health emphasizes the importance of testing, following health orders

Rainbow trouts thrashing with life as they’re about to be transferred to the largest lake of their lives, even though it’s pretty small. These rainbows have a blue tinge because they matched the blue of their hatchery pen, but soon they’ll take on the green-browns of their new home at Lookout Lake. (Zoe Ducklow/News Staff)
VIDEO: B.C. lake stocked with hatchery trout to delight of a seniors fishing club

The Cherish Trout Scouts made plans to come back fishing soon

Photo by Metro Creative Connection
New campgrounds coming to B.C. parks as part of $82M provincial boost

This season alone, 185 campsites are being added to provincial parks, says Minister of Environment and Climate Change

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

B.C.’s Court of Appeal in Vancouver. (Black Press Media files)
‘Stereotypes’ not an issue in Langley sex assault ruling, Court of Appeal says

The Court of Appeal upheld a conviction in two attacks on a 17-year-old

Paper Excellence took over Catalyst Paper operations in B.C. in 2018. (Paper Excellence photo)
Archibald bowl near Chilliwack. (Submitted)
Cheam First Nation ‘shocked’ over all-season mountain resort proposal near Chilliwack

For five years the band has been working on a gondola project of their own

The plane blasted through an airport fence and down a hill, before stopping before a cement barrier on Highway 5A, right in front of a school bus. Photo submitted.
Student pilot crashes plane onto Highway 5A almost hitting school bus

Aircraft hit pavement right in front of school bus

Eight-year-old Piper and her family were raising money to help Guinevere, the bearded dragon, get a gynecological surgery. Sadly, the reptile didn’t survive the procedure. (Jackee Sullivan/Special to Langley Advance Times)
Lizard fails to survive surgery, GoFundMe dollars help Langley family offset medical bills

Guinevere, a pet bearded dragon, underwent an ovariectomy on Tuesday

Most Read