Ontario’s Pilot Project for Basic Income in the Province
Back in the Ontario Provincial Budget 2016 – the government made a commitment to launch a pilot project for a Basic Income Project in Ontario. The concept is that every (qualified) family would be awarded a basic income. This would happen regardless of if they were working or not. This year (2017) – the pilot is being launched in 3 Ontario communities to determine proof of concept. Similar programs have been launched all over the world with positive results. In very poor areas basic income seems to have a positive impact on child malnutrition. Parents are able to purchase basic necessities to feed their children. Not every person in Ontario is affluent by any means. Ontario does not have the same issues as many of the countries with struggling economies.
Welfare vs Basic Income
For some people it may seem like there is very little difference between welfare/social assistance and a basic income project. Both provide government money to households that are not able to sustain the basic needs of life. Basic income has one particular feature that may make the biggest difference. The current social assistance program is not designed for people who are working. You can qualify for assistance even while working, the requirements make it nearly impossible to do so. Alternatively, Basic income can be provided to families that are working but are earning less than a living wage at their job. This is a reality for many temporary or part time employees in the current job market.
Welfare/Social Assistance in Ontario ranges from $656/month to $1,173/month depending on the number of people in the household. The Basic Income Project pilot has a range of $1,415/month for a single person to $2,002/month for a couple. This brings the income up to above the poverty line. For people who are working, 50% of their wages are deducted from the amount the government provides. If you are a part-time or temporary worker making $1,000/month already, 50% of that would be deducted from your basic income. In this case, $500 would be deducted from the $1,415 which would provide you with $915 the government as well as your $1,000 income. This provides an incentive for people to contribute to the workforce even if they qualify for Basic Income.
The pilot project for Ontario is launching in 3 communities this year. The first is the Hamilton area. Hamilton is located an hour Southwest of Toronto. The second community is Thunder Bay – which is located 15 hours Northwest of Toronto just outside the border of Minnesota. The last community is Lindsay, close to 2 hours Northeast of Toronto. These communities were chosen because they reflect some of the issues this project tackles. They have pockets of population that are struggling with their basic needs despite being eager to be in the workforce.
Abusing the System
While there are measures in place to reduce the amount of people that can take advantage of government assistance programs like this, it is unrealistic to say that everyone who receives money from the government is actually in need. The main issue is that qualifications for this rely on reported income to determine eligibility. There are people who work nearly full-time hours for cash which they don’t declare. This is illegal of course – I’m not saying the government encourages such abuse by any means. The costs associated with trying to enforce the rules to stop abuse are incredibly high.
Full-time government employees would need to be brought in to monitor the lives of people in the program. According to the Canada Social Report close to half a million people in Ontario receive social assistance payments from Ontario Works. That accounts for about 3% of the total population. In my opinion, the government should maximize the penalties for individuals found abusing the system – and take efforts to ensure all residents are aware of the penalties. These programs rely on tax dollars to operate. If less people abuse the system, more resources will be available for those who really need the assistance. More effort can be put into developing essential skills to promote growth in the community.
Will it Work?
I’m confident that this is a positive step for Ontario. I believe the program will yield positive results, but I feel much more comfortable having a limited pilot to see what happens on a small scale. In 2020 the results of the pilot will be made public. From there a decision will be made to launch the program in a larger scale, make changes or improvements if there are shortfalls found or scrap the project altogether.
If the program is scrapped it would be beneficial to go back to the table and find another solution to helping the less fortunate with their basic needs. The current social assistance program helps thousands of Ontarians scrape by, albeit under the poverty line. We are certainly not in the strongest economy we’ve ever had, but now is the time to improve life for all of Ontario, along with the minimum wage increase. If this program is successful, it can serve as a benchmark for the other provinces and territories to follow suit.
Do you think this program will help Ontario or just be another drain to the system?