The Strategist

Canada introduces unconditional basic income

05/01/2017 - 05:35

The authorities of the largest Canadian province of Ontario presented details of the pilot project on the introduction of unconditional basic income (UBI). Within three years, about 4 thousand needy Canadians will annually receive around $ 12 570 from the state without any counter obligations.

Stefan Ogrisek via flickr
Stefan Ogrisek via flickr
"We live in a new world with its new challenges. Starting with technology and ending with Trump, there is a time of uncertainty and change", said Ontario Prime Minister Kathleen Wynne, introducing the experiment with an unconditional basic income. - But we must not back down, the government should not hold onto the status quo or go away from responsibility". The Ontario authorities should ensure a decent standard of living for the poor in the province.

In the coming months, 4 thousand inhabitants of the cities of Hamilton, Thunder Bay and Lindsay will be arbitrarily selected to participate in the project. The experiment will involve citizens aged 18 to 64, employed in low-paid jobs, live from hand to mouth by casual earnings, or live on benefits.

Within three years, the participants will receive an annual amount of money to meet basic needs: $ 12,570 for single and $ 17,700 for married couples. The beneficiaries of the UBI will not have to account for the funds received, and they will retain child allowances or disability benefits, if they receive one.

For those participants who have a job, the UBI size will vary depending on their salary’s size: for every dollar they earn, payments will be reduced by 50 cents. The participants can exit the experiment at any time.

Commenting on the conditions of the experiment, Ontario Prime Minister said: "This is certainly not a crazy sum. But our goal is clear. We want to find out if the UBI changes people's lives for the better, whether this approach allows them to realize their potential". Although the participants will not have to report their expenses, the authorities will monitor exact needs on which this money will be spent, be it health, education, housing, or something else. The experiment’s results will be analyzed by experts and published in 2020. 

This will be the second attempt to introduce UBI in Canada. In 1974, a similar experiment involved about 1,000 people in the small town of Dauphin in the province of Manitoba. They received about $ 11,800 a year (at the current rate). The working participants were also deducted 50 cents from the amount of UBI for each dollar earned. 

The experiment lasted four years, and the inhabitants of Dauphin did not begin to quit work or work less. At best, young mothers went back to work after maternity leave at a later date, and young men did not leave school to start earning money, instead finishing their studies to the last grade. Health of the Dauphin's residents had improved somewhat – number of causes of hospitalization or mental disruption has decreased. According to the polls, people began to feel confident about the future.

However, the pilot scheme had to be rolled back. Federal funds allocated for the experiment were exhausted ($ 85 million at the current rate), and the Manitoba government, which was replaced in 1977, decided not to extend funding. For the current project, the authorities allocated $ 150 million, at $ 50 million for each year.

Canada is not the first to take up such a social experiment. In January this year, Finland launched its two-year project. 2 thousand unemployed are receiving about $ 600 a month from the state agency of social insurance. A similar experiment is being prepared in the Netherlands. Berlin and Livorno, as well as several countries in Africa and in India, are also going to hold the experiment at the level of private and public initiatives.

As shown by a survey conducted last year, 64% of citizens of EU countries supported the idea of introducing UBI. Although Europe is united in this matter, there are dissenting opinions, too. In Switzerland, which was the first in the world to raise the issue of introduction of UBI into a nationwide referendum, only 23% of citizens supported this initiative.