Ontario to test guaranteed-income program amid warnings about costs, effectiveness

Former Conservative senator Hugh Segal delivers a key report this week on a plan by Ontario to launch a pilot project to guarantee a minimum income for participants in a community still to be selected. In an interview, Segal gives some hints about the report's contents — and rebuts critics who say such programs foster laziness.

Briefing note warns guaranteed-income projects costly, ineffective and encourage workers to stay home

Former Conservative senator Hugh Segal will deliver a report this week on how Ontario might implement its pilot project for a guaranteed minimum income for residents of a still-to-be-chosen provincial community. (Richard Plume/Canadian Press)

The long-debated idea of a guaranteed minimum annual income for Canadians moves a small step closer to reality this week.

Former Conservative senator Hugh Segal delivers a report this week on how the "basic income pilot" announced in Ontario's February budget might work.

The Ontario government earmarked $25 million this fiscal year to establish a pilot project in the province sometime before April 2017, and appointed Segal in late June as an unpaid special adviser.

In an interview with CBC News, Segal gave some hints about his report, which is expected to be made public in mid-September for three months of public consultations.

He's quick to dismiss suggestions that guaranteed incomes foster laziness.

"For all those good folks on the right … who say that if you pay people to do nothing, they will do nothing, I remind them that 70 per cent of the people who live beneath the poverty line in Ontario … have jobs.

"They just don't earn enough through minimum wage to be above the poverty line," he said.

"So the notion that this is about chocolate, and couches, and popcorn, and watching TV is actually without any substantial basis in fact."

Segal, long an anti-poverty advocate, says any pilot project in Ontario must be in place for at least three years to be able to measure impacts effectively.

Test 2 population groups?

He also suggests two types of pilots could be tested, one in a small community to gauge its effect on the entire population, the other in one part of a larger community to compare its effect against the experience of the rest of the local population.

The Ontario government has indicated the pilot will not eliminate or consolidate existing poverty-reduction programs, but rather be designed as a top-up to such programs to lift its voluntary participants above the poverty line.

Hugh Segal. (CBC News)

Quebec, Alberta and Prince Edward Island in recent years have raised the possibility of minimum-income pilots. And the Liberal Party of Canada at its Winnipeg convention in late May passed a resolution making the concept party policy.

But Ontario will get no direct financial support from the Liberal government, even though Social Development Minister Jean-Yves Duclos, an economist from academia, closely studied the idea of guaranteed-income programs before entering politics.

Duclos' mandate letter makes no mention of the concept, and the government has committed only to providing relevant data to provinces that ask for it.

It appears the results are mixed.- May 31 briefing note for Social Development Minister Jean-Yves Duclos on previous guaranteed-income experiments

"There is no plan to establish a federal pilot program," said his spokesman Mathieu Filion, adding: "[Liberal] party policies are taken into consideration by the government but they are not automatically governmental policies."

Most Canadian advocates of such programs point to a federal-provincial experiment in Manitoba, dubbed "Mincome," between 1974 and 1979.

The experiment was conducted in Winnipeg and in the small community of Dauphin, with Ottawa picking up three-quarters of the $17-million budget. About 1,000 families got monthly cheques under the pilot.

A May 31 briefing note to Duclos about guaranteed annual income pilots, written shortly after the Liberals' Winnipeg convention, paints a somewhat less rosy picture than do advocates.

Less rosy

"Based on findings from the MINCOME project in Manitoba … and other GAI (Guaranteed Annual Income) pilots in the United States, it appears the results are mixed," says the heavily censored document, obtained by CBC News under the Access to Information Act.

"While there are poverty reduction impacts, these are sometimes offset by negative labour force participation rates. A GAI can also be very costly and does not necessarily lead to savings by government."

The document also warns about "the difficulty of delivering it to the self-employed, to farmers, and particularly to those who change location or family structure frequently."

On June 5, voters in Switzerland resoundingly rejected a proposal for a relatively generous guaranteed minimum income, but Finland is pressing ahead with a more modest program next year.

An Angus Reid Institute poll this summer also found broad skepticism among Canadians, with almost two-thirds of respondents indicating they would not be willing to pay more taxes to support a program providing $30,000 guaranteed annual income.

Jean-Yves Duclos, minister of families, children and social development, studied minimum-income plans as an academic, but says the federal government will not be participating directly in Ontario's pilot. (Sean Kilpatrick/Canadian Press)
Ontario's own proposal is mindful of net costs. The February budget said the proposed pilot would "test whether a basic 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."

Segal says his forthcoming report will lay out a balanced calculus of risks and benefits. But it's clear he's sold on the idea, having grown up in an impoverished working-class family in Montreal before the advent of universal health care.

"I do remember the debates around the dining room table on a Sunday night, about: Do we pay for the butcher? Or do we pay for the druggist? Or do we pay for the doctor? Or do we pay our rent? Or do we pay our heat? We can pick any two."

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Dean Beeby

Senior reporter, Parliamentary Bureau

Dean Beeby is a CBC journalist, author and specialist in freedom-of-information laws. Follow him on Twitter: @DeanBeeby