Basic income cheques going to 400 households as project gets off to slow start

Ontario will mail cheques to 400 people this month as it begins its basic income pilot project, ministers announced in Hamilton Wednesday. The rollout hasn’t been smooth.
The province began mailing information packets to "random" households in June. (Matt Prokopchuk/CBC)

Ontario will mail cheques to 400 people this month as it begins its basic income pilot project, two ministers announced in Hamilton Wednesday.

Hamilton and Brantford are among the locations where the province is experimenting with the idea of giving people an amount of money each month without the strings attached that typically accompanies government assistance cheques.

The rollout hasn't been smooth. The province mailed out applications to "random" households beginning in June, but only heard back from a small fraction.

A few weeks ago, they engaged local poverty and social services agencies to help connect them with potential applicants. The premier said Wednesday there are "thousands" more applicants being processed currently to be part of the project.

"Though we're starting small, and enrolling a small number of people, it is ramping up," said Peter Milczyn, the minister responsible for the province's poverty reduction strategy, in Hamilton Wednesday morning. "We're also making adjustments as we go along."

"It's such a new concept for many people especially people who were used to [other government assistance programs] or people who actually work and are employed and simply have a low income," he said. "We do not want anybody to be worse off than they were before."

'Starts and missteps'

Tom Cooper, chair of the Hamilton Roundtable for Poverty Reduction, said his network referred about 40 people to consider applying.

"The challenge is this is a social policy experiment and there's going to be some starts and missteps," said. "I think they're doing what they need to do."

Ultimately the province aims to include 4,000 people in the pilot project, which is expected to run three years.

So far, about two-thirds of the recipients are working poor, while one-third have previously been receiving government assistance of another kind, said Helena Jaczek, minister of community and social services.

A single person could receive up to about $17,000 a year, minus half of any income he or she earns. A couple could receive up to $24,000 per year. People with disabilities could receive up to $6,000 more per year.

Ontario Premier Kathleen Wynne announced the launch of a basic income pilot project in Hamilton in April. (Kelly Bennett/CBC)

"We need to address the concerns of those who worry about falling behind, even as they work so hard to get ahead," Premier Kathleen Wynne said when she announced the project launch in Hamilton this April.

'A cash grab for potential creditors'?

Cooper said there's one big issue he wants to see resolution on before the roundtable will refer any more households.

Currently, recipients of Ontario Works (OW) and Ontario Disability Support Program (ODSP) are protected from wage garnishment and debt liens by creditors.

It's unclear if those protections extend to basic income recipients – meaning applicants may want to reconsider if they are behind on debts to former landlords, credit cards or payday loans.

"We have to make sure that at the end of the day, people are better off than they would be without the basic income pilot," he said.

"We certainly don't want the basic income pilot to become a cash grab for potential creditors."

Basic income pilot project

5 years ago
Duration 2:13
Ontario is starting a three-year project to provide a basic income of $17,000 per year to see how it will affect people’s lives

At the Hamilton announcement on Wednesday, Milczyn said the organizers of the pilot project are "looking at what we can do about that."

"The difficulty is this is a pilot project," he said. "It's not established by law that this is an income support program. So it doesn't have the same protections against garnishment that OW and ODSP and other programs have. Our lawyers are looking into it, as to what we can do."

He said any applicants are counselled about the pros and cons of participating in the program, and are able to switch back to OW or ODSP at any time or end their participation in the pilot if they change their mind. 

'This is unacceptable'

Hamilton East-Stoney Creek MPP Paul Miller raised the garnishment question at Queen's Park on Wednesday.

"This is unacceptable," he said. "It's even gotten so bad that poverty advocates in my hometown of Hamilton are warning people not to join the project."

Wynne responded but did not address whether the participants could have their basic income garnished by creditors.

"And are there questions about the rules around the pilot? Are there adjustments that will likely have to be made? Yes, it is a pilot project," she said.

"We're working very hard with the researchers to get it right."