Since October, the Senate Finance Committee has been examining a project for a universal minimum income for all Canadians, at the instigation of Senator Kim Pate. Variations of “basic income” have already been attempted in Portugal, Finland, the Netherlands, India, France, Silicon Valley, Nigeria, Kenya and Uganda. Of course, the “base” differs, as do the potential beneficiaries. As indicated by Ambre Fourrier, author of the book The basic income in questionit is a policy “with very variable geometry”.
Quebec adopted a limited basic income program in January 2023. In 2024, any eligible person with “severe and persistent employment constraints” may be entitled to approximately $15,276 per year, an amount indexed annually. Each dollar earned above this $15,276 exemption would reduce the benefit by 55 cents. This mechanism had already been attempted in a Canadian experiment little known to the general public.
From 1974 to 1979, Manitoba economists developed the Mincome pilot project (for minimum income) in the town of Dauphin, which has around 10,000 people. Residents over the age of 17 were offered an annual income of $16,000. Each additional dollar earned by a household reduced this amount by half. It followed the crazy idea that everyone deserved to have their basic needs met…whether they worked or not.
According to economist Evelyn Forget, who went through around 1,800 archive boxes 30 years after the experiment, Mincome made it possible to reduce hospitalization rates by 8.5%, reduce the number of accidents linked to alcohol, improve mental health and increase high school graduation rates. The pilot project also reportedly led to a reduction in the rate of domestic violence and workplace injuries.
The instigators of Mincome particularly wanted to know if a guaranteed basic income led people to leave their jobs. Contrary to popular beliefs, such a universal policy does not encourage idleness, but provides sufficient stability to refuse poor working conditions or seek employment more in line with one’s expertise. Toronto researchers assessed that a basic income encouraged people to work “differently”, but not “less”. A study in Uganda calculated that hours worked following receipt of a basic income increased by 17%.
When Mincome was in place, the only people using the money to avoid working were students and new mothers (parental benefits were lower at that time). As it is a cumulative income, people are rather encouraged to work to have a decent total income.
On the contrary, current social assistance systems keep people “without severe employment constraints” in precariousness, since the amount allocated is reduced by $1 for each dollar earned. In Quebec, beyond $200 in addition to the $762 paid per month to people “without” constraints, each dollar earned on the job market is withdrawn from the benefit. It is difficult to calculate how one can pay rent, feed themselves, get around and clothe themselves on $762 per month. Moreover, according to government data from 2021, approximately 3.7 million Canadians were then living in poverty.
The rapid and effective experience of the CERB during the pandemic also counters the argument of the potential bureaucratic burden of such a measure. Compared to social protections already in place, such as employment insurance or social assistance, such a universal program would be much simpler to administer. There would also be less stigma, since everyone would in principle benefit. Unlike what happens with social assistance, we could combine work income and basic income up to a slightly more decent amount.
The Mincome project was abandoned in 1979 due to inflation, global oil shocks and a change of government. The transition from the Ontario government from Kathleen Wynne to Doug Ford in 2018 similarly interrupted a similar initiative in Hamilton, Thunder Bay and Lindsay.
So, a good idea, basic income?
For some analysts, this is a false good idea. There would be better policies to reduce poverty, such as job creation. Employers could also use basic income to pay their workers less, telling themselves that the government would fill the gap anyway. A basic income should therefore not be used to slow down the increase in the minimum wage.
I myself have already stated that a basic income should not serve as an excuse for the State to disengage or privatize its social responsibilities, whether support for the elderly, daycares or social housing. The Organization for Economic Co-operation and Development released a report in 2017 saying that a guaranteed basic income could increase poverty by 1% if the government implementing it with one hand reduced the social safety net with the other.
According to Ambre Fourrier, since there are a plurality of different proposals on basic income, each of them must be carefully analyzed. The punitive and stigmatizing nature of current social assistance policies should be questioned. According to the author, it is better to bet on everyone’s desire to contribute to the community and strengthen inclusion by distributing income to people who request it. As with the PCU, it would also be more effective to readjust the amounts earned at the time of filing the income tax return (control after rather than before).
Under this condition, a basic income for all would be a major step towards a society that would generate fewer poor people. Because poverty costs us dearly.