Close X
Friday, September 20, 2024
ADVT 
National

Basic income could cut poverty rates in half: PBO

Darpan News Desk The Canadian Press, 07 Apr, 2021 05:30 PM
  • Basic income could cut poverty rates in half: PBO

The federal government could cut poverty rates by almost half in one year if it launched a basic income similar to one previously studied in Ontario, the parliamentary budget officer says.

Although nationally the drop in poverty rates under such a measure would be about 49 per cent, the reductions would vary across provinces.

Budget officer Yves Giroux estimated that poverty rates could fall as much as 61.9 per cent in Manitoba or as little as 13.5 per cent in Newfoundland and Labrador if the federal government instituted the program.

At its core a basic or guaranteed income provides a no-strings-attached government benefit to citizens to provide each with a minimum amount of earnings.

Four years ago, Ontario began studying the effects of providing people with enough money to be about three-quarters of the way to the poverty line, and rolling back payments for every dollar of earnings.

The study, which federal officials monitored closely, was ended early with a change of government in Ontario.

Giroux said a federal program modelled on what was set up in the Ontario experiment would cost an estimated $85 billion if implemented this fiscal year, rising to over $93 billion by 2026.

The budget officer's report released Wednesday updates his projections from last summer about the cost of a basic income program, and details the financial ripple effect across households and workers.

Driving the work were questions from parliamentarians about the effects of a basic income program, which has picked up political traction over the last year as the COVID-19 pandemic put the economy into a tailspin. At its worst, the pandemic cost the country about three million jobs and reduced hours and incomes for 2.5 million more.

The grassroots of the Liberal and New Democratic parties have put forward resolutions at their respective policy conventions to make a basic income a core policy. Although it may win approval when New Democrats gather, the Liberals are split on the proposal, with Prime Minister Justin Trudeau said to still be less-than-enthused with the idea.

Had there been in place a basic income program like the one Giroux modelled, the government would have paid about $17,000 to a single person, or $24,000 for a couple, and then taken off 50 cents for every dollar earned as incomes rose from there.

For the most part, Giroux estimated, disposable income would rise for those at the bottom of the income scale by 17.5 per cent, or just over $4,500, while those higher up the earnings scale would see their incomes drop slightly.

The reason for the drop would be another caveat in the modelling, that the federal government would remove refundable and non-refundable tax credits aimed at fighting poverty.

Overall, Giroux's report said more than 6.4 million people would see their disposable income rise as a result of a basic income program, on average by 49.6 per cent, while 16.8 million more would have their net income fall by 5.4 per cent.

Giroux's report also said that the interaction between tax rates, elimination of credits and earnings as part of basic income would make some workers rethink taking on additional employment hours if it meant losing income through a combination of paying more taxes and receiving fewer benefit dollars.

He estimated that overall, employees would reduce their hours worked by 1.3 per cent nationally, which would cost federal coffers between $3 billion and $3.3 billion annually over a five-year stretch due to lost revenues.

MORE National ARTICLES

No choice but scramble on COVID-19: AG

No choice but scramble on COVID-19: AG
She also found the government's financial support programs rolled out well, but now extensive efforts will be needed to ensure the money went where it was supposed to.

No choice but scramble on COVID-19: AG

Forces ombud backs predecessor's handling of Vance

Forces ombud backs predecessor's handling of Vance
While Lick says he would not have been able to speak to either, the head of the Canadian Forces National Investigation Service indicated to the committee that Sajjan himself could have referred the matter to his unit.

Forces ombud backs predecessor's handling of Vance

Vancouver Police are looking for help identifying suspect in Art Gallery mischief

Vancouver Police are looking for help identifying suspect in Art Gallery mischief
The person filming is a dark-skinned man and appears to be between 19 and 23 years old. He has a thin build, brown eyes, and black shoulder length curly hair.

Vancouver Police are looking for help identifying suspect in Art Gallery mischief

Canada surpasses 10 per cent vaccination mark

Canada surpasses 10 per cent vaccination mark
Dr. Howard Njoo, Canada's deputy chief public health officer, announced on Thursday that the country had surpassed the 10 per cent mark of residents over 18 who have received at least one dose of a COVID vaccine.

Canada surpasses 10 per cent vaccination mark

Feds earmark $7.2 billion for health, cities

Feds earmark $7.2 billion for health, cities
Finance Minister Chrystia Freeland says COVID-19 has placed extreme pressure on health-care systems across the country and Canadians need help urgently.

Feds earmark $7.2 billion for health, cities

Ottawa says COVID vaccine distribution ramping up

Ottawa says COVID vaccine distribution ramping up
Deputy chief public health officer, Dr. Howard Njoo, says the country has surpassed the 10 per cent mark of residents over 18 who have received at least one shot.

Ottawa says COVID vaccine distribution ramping up