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Ontario’s Basic Income Pilot Project Is Not Alone


 

By Randall White

Ontario is consulting on the idea of a basic income project, and it's not alone in exploring the idea. 

In yet another sign of new directions in the global village the Finland Pirate Party’s leader, in her late 20s, has “been unemployed most of my adult life.” And she is “cautiously welcoming” the centre-right Finnish government’s 2,000-citizen trial of a publicly funded Basic Income Plan.

The first cheques in this experiment went out January 1. Finland is the first country in Europe to move ahead practically with the so-called universal basic income concept. 

British economists Howard Reed and Stewart Lansley have urged that this concept could “provide a much more secure income base in an age of deepening economic and social insecurity and unpredictable work patterns.”

While Finland is the first country to get started, it is not alone. 

Voters in Switzerland rejected a publicly funded universal basic income in a referendum this past June. But Scotland plans to test a related program in 2017. Similar experiments are under consideration in Brazil, Iceland, the Netherlands and Uganda. 

Silicon Valley’s “top start-up accelerator,” Y Combinator, has plans for an initial basic income experiment providing 100 families in Oakland, California with as much as $2,000 a month.

(As the technology reporter Michael J. Coren has explained, “Universal basic income is a growing obsession in Silicon Valley” — a place full of “speculation about an automated future where technology takes over most occupations ... and the jobless forever outnumber the jobs.”)

Here in Ontario the Wynne government announced a basic income pilot project in the 2016 budget. It then commissioned former Bill Davis government policy guru Hugh Segal to prepare a project discussion paper, which was tabled at the end of this past August. 

The paper noted that other Canadian provinces have expressed interest in the concept.

It also pointed out that the “Mincome experiment conducted between 1975 and 1978 in Dauphin and Winnipeg, Manitoba tested the principle of a Basic Income ... The results indicated population health improvements ...  potential ... government health savings, and no meaningful reduction in labour force participation.”

The Wynne government is now in the midst of a Basic Income Pilot consultation — online and at public meetings in 14 centres across the province.

The consultation will conclude at the end of January. The government will then issue a final report and introduce a plan for a pilot project by April.

In his discussion paper Hugh Segal urged “Ontario should not duplicate similar pilots taking place over the same time period in other democracies, such as Finland or the Netherlands. What we test should be different...” 

Both the Finland and Ontario projects are less ambitious than the more rigorously universal basic income proposal rejected by voters in Switzerland this past June.  Supporters of the Swiss proposal had suggested a monthly income of $2,555 U.S. for all adults.

In Finland 2,000 individuals who are currently unemployed and on benefits will receive a monthly income of about $587 U.S. as part of their benefits package. Unlike with current programs, they will continue to receive this stipend even if they get a job. 

Based on the Segal recommendations, Queen’s Park will test replacing the Ontario Works and Disability Support programs in several locations with a basic income to individuals living below 75% of the province's Low Income Measure (LIM).

Media reports have suggested this would typically be equivalent to $1,320 Canadian per month. (Again, the stipend will continue if recipients get a job and stop qualifying for Ontario Works.)

As the Swiss referendum underlines, popular support for the universal basic income concept generally is as yet soft at best. Only 23% voted yes this past June.   

U.K. employment minister Damian Hinds has urged that “at first glance a universal basic income might appear desirable ... (but) any practical implementation will invariably be unaffordable.”

Last month the elected council for the Town of Smiths Falls in eastern Ontario voted against involvement in the province’s basic income pilot project. Councillor Jay Brennan explained “Philosophically I’m not there yet.”

On the other hand, there are conservatives who like the basic income concept as a more free-market alternative to the street-level bureaucracy of the welfare state. 

Both Brexit in the U.K. and the rise of Donald Trump in the U.S. can be seen as partial reactions to the economic fears that also drive the universal basic income concept.  

Silicon Valley’s concerns about an automated future where technology takes over most occupations and the jobless forever outnumber the jobs may not be altogether misplaced. 

That future may show as well that Kathleen Wynne’s government was on the right side of history when it launched a basic income pilot project in 2017.

And as Ontario taxpayers try to evaluate this project, they may find it helpful to compare the results of similar experiments in such places as Finland, Scotland, and Oakland, California. 

 

 

 

 

 

 

About Randall White

Randall White is a former senior policy advisor with the Ontario Ministry of Finance, and a former economist with the Ontario Ministry of Municipal Affairs and Housing. He is the author of Ontario 1610-1985: A Political and Economic History and Ontario Since 1985. He writes frequently about Ontario politics.
Posted date : January 17, 2017

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