Guaranteed Basic Income Program Could Slash Poverty in Canada

The federal government's fiscal watchdog has released a report showing that implementing a guaranteed basic income might lower the poverty rate in Canada by as much as 40%. The analysis indicates that families in the lowest income bracket could see an increase in their disposable income by approximately $6,100 annually, although this may come with a restructured tax system that could reduce income levels for higher earners.

The report details that while the gross cost of distributing basic income cheques could reach $107 billion by 2025, most of this expense could be offset through reforms in tax credits designated for low-income families, along with adjustments in the basic personal amount exempt from taxation. According to the analysis, the net cost to the federal government would range between $3.6 billion and $5 billion, varying with the specific implementation model chosen.

Another aspect considered is the potential slight reduction in work hours—up to 1.4%—by those receiving the basic income. While the report does not deeply explore the resulting shifts in demand for services such as health care, it notes that these secondary effects are difficult to fully measure. The analysis further mentions that the starting point for the report's conclusions is Ontario's 2017 basic income pilot, which defined a family based on a narrow "nuclear family" model.

An alternative "economic family" definition, which includes all related individuals living together, suggests a significant reduction in administrative costs and even greater poverty reduction rates. Under this model, poverty would fall by 40%, compared to 34% using the narrow definition, with regional differences anticipated—ranging from a 53% decrease in Manitoba to a 26.2% decrease in British Columbia. The report also highlights that previous efforts, like a pilot project in Newfoundland and Labrador for older adults on income assistance, have seen low enrollment, partly due to the limitations and discouraging nature of conventional welfare programs. Political figures, including a federal NDP member and a Liberal leadership candidate, have expressed their views on the need to integrate basic income with broader reforms to Canada's social support systems.