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               Ontario Basic Income Experiment Not Universal 

                                          But It’s A Start

 

 

By Randall White

The Ministry of Community and Social Services released its latest report on the innovative Ontario Basic Income Pilot— to be launched in the spring of this year—on October 4

(Social Services Minister Helena Jaczek and Peter Milczyn, Minister Responsible for Poverty Reduction, made a parallel announcement in Hamilton, one of the pilot locations.)

The Ontario report appeared at almost the same time as the Harvard economist Benjamin M. Friedman’s ultimately unenthusiastic assessment of a major new book on the broader subject, which appeared in the October 12 issue of the New York Review of Books. 

The book is Basic Income: A Radical Proposal for a Free Society and a Sane Economy by Philippe Van Parijs and Yannick Vanderborght, published in March.

Reading Friedman’s critique of the universal basic income concept advanced by Van Parijs and Vanderborght back to back with the latest report on the Ontario Basic Income Pilot underlines our more limited ambitions north of the Great Lakes. 

Mr. Friedman does not mention Ontario’s pilot in his review. But he does allude to the broadly comparable exercise that began in Finland this year. 

And he stresses “even Finland’s much-touted basic income experiment is not actually ‘universal’; only people out of a job and already drawing unemployment benefits” qualify.

Ontario’s experiment is equally constrained. According to Community and Social Services “the three-year, 4,000-participant pilot is testing whether a basic income can better support vulnerable workers,” and “improve health and education outcomes for people on low incomes.”

Hence, it is not universal.

As a preliminary August 2016 discussion paper urged, “The main purpose of a Basic Income Pilot” is “to test replacing the broad policing, control, and monitoring now present in Ontario Works and the Ontario Disability Support Program (ODSP), with a modestly more generous Basic Income, disbursed automatically to those living beneath a certain income threshold.”  

As matters stand, even this limited Ontario Basic Income Pilot (OBIP) is moving more slowly than anticipated. So far only 400 people have started to receive a monthly basic income since July. 

One group is in the Hamilton, Brantford, and Brant County area in southern Ontario.  Another is in Thunder Bay and environs in the north. Enrolment in a second southern pilot location in the Lindsay area has just begun.

One reason for the slow start has been an understandable scepticism among those to whom applications for participation in the program were randomly mailed out.

To participate, applicants must be 18 to 64 years old, a resident of one of the three pilot locations, and “living on a low income (under $34,000 per year if you're single or under $48,000 per year if you’re a couple).”

Participants could receive up to $16,989 per year for a single person, up to $24,027 for a couple and up to an additional $6,000 per year for a person with a disability.

Social services minister Helena Jaczek has indicated that about two-thirds of the initial 400 participants are “working poor.” Another third were previously receiving other forms of government assistance.

You can get a job and still be on basic income in Ontario—except the basic income amount will decrease by $0.50 for every dollar an individual earns by working.

You also have to withdraw from the current Ontario Works or Ontario Disability Support Program (ODSP) to participate in the pilot. But if you leave Ontario Works you will continue to receive the Ontario Drug Benefit. And if you leave ODSP you will continue to receive the Ontario Drug Benefit and dental benefits.

The Harvard economist Benjamin Friedman’s analysis is bound to stress that Ontario is not testing the concept of a universal basic income paid to everyone—that the likes of Philippe Van Parijs and Yannick Vanderborght are urging on the new digital age.

In Friedman’s words, the “more novel argument” Van Parijs and Vanderborght advance is that “a universal basic income would provide a new kind of economic freedom” for everyone. 

The more limited experiment Ontario has now begun is just trying to emancipate those trapped by the street-level bureaucracy of today’s welfare state. 

Benjamin Friedman would urge that there is a good reason for this. The seriously universal basic income that would achieve the lofty Van Parijs and Vanderborght goals is unaffordable at current levels of economic development. 

(Although he comes to this conclusion via back-of-the-envelope calculations that many may find entertaining but unconvincing.)

A long-term view of what Ontario is doing right now is testing the concept of a basic income at the lowest ranges of the present income distribution. 

If the concept finally does make as much sense as Van Parijs and Vanderborght claim, it can gradually become as universal as it needs to be, to provide a new kind of economic freedom for everyone.   

Meanwhile, for once the least advantaged among us are getting opportunities first.

 

 

 

 

 

 

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 : October 26, 2017

View all of Randall White's columns
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