Ontario ready to roll out guaranteed income pilot project

Ontario will launch a guaranteed annual income pilot project in three Ontario cities beginning this spring.

Premier Kathleen Wynne announced Monday that the Ontario Basic Income Pilot (OBIP) will give up to 4,000 low-income earners in Hamilton, Lindsay and Thunder Bay a basic annual income of $17,000. Couples would earn $24,000 and people with disabilities would earn up to $6,000 on top of the basic amount. Participants are allowed to work during the pilot project but their basic income will decrease by $0.50 for every dollar they earn by working.

According to the province’s calculations, a single person with two children earning $20,000 per year would earn approximately $6,000 of basic income.

The pilot project is meant to replace payments available through Ontario Works, which provides financial assistance for low-income earners, and the Ontario Disability Support Program. Eligible participants will continue to receive the Ontario Drug Benefit and dental benefits.

Hugh Segal, a former Conservative senator, made recommendations to the province for an annual basic income program last June.

“It is hard to conclude that the income support that is now available for those living in poverty is adequate in any meaningful way, despite recent improvements introduced by the province,” he said.

The description of the pilot project, announced in the 2016 Ontario budget, said a guaranteed annual income would “provide a more efficient way of delivering income support, strengthen the attachment to the labour force, and achieve savings in other areas, such as health care and housing supports.”

Some, however, have questioned the effectiveness of guaranteed income programs.

Charles Lammam, director of fiscal studies at the Fraser Institute, said people could be less motivated to work if they earn a basic income.

“The fact that the basic income will come with no conditions or strings attached raises really important concerns about work disincentives,” he said in a phone interview Monday.

“Because ultimately what’s going to happen is the government is going to pay able-bodied people in Ontario not to work and so the lack of conditions for receiving the transfer could encourage dependency on government and discourage people from improving their situations themselves.”

The Ontario government will invest $50 million for each year of the three-year pilot program.