Fighting poverty: what will help Canada?
The head of the Budget Commission has named a way to halve poverty in the country in one year.
Pressure is mounting on the federal government to introduce a guaranteed basic income system in Canada. The reason was the publication of a report by Yves Giroux, head of Canada's Parliamentary Budget Commission, which said it could help cut the country's poverty rate by nearly half by 2022.
Guaranteed basic income, or unconditional basic income, is a system involving regular payments by the state of a certain amount of money to each resident of the country, regardless of their income, availability of work and other factors.
The income security model was tested in Ontario in 2016, and the payments significantly improved people's quality of life. The average payment was $17,000 CAD per person per year and $24,000 CAD per couple per year.
On 22 February this year, Liberal MP Julie Gerowicz introduced the Guaranteed Basic Income Bill in Parliament, in which she proposed that the Minister of Finance develop a strategy for the payment of benefits to residents of Canada. A pandemic was one of the main reasons the topic was once again being debated in government. Gerowicz's bill faced both support and criticism from officials.
As for Yves Giroux's report, the average poverty rate across Canada could fall by 49% with the introduction of a basic income, but the reduction would be uneven. For example, Manitoba would see a 61.9% reduction, while Newfoundland and Labrador would see only a 13.5% reduction.
The total cost of the program, if implemented in 2021, would be about $85 billion CAD, rising to $93 billion by 2026. Canadian Prime Minister Justin Trudeau has already said he has no plans to introduce a basic income in the country, and such high spending is likely to strengthen his position.
Under the model estimated by Giroux, the amount of basic income would not be the same for all Canadians: those who earn less would receive a higher benefit. But residents who now earn more could see their incomes fall (by an average of 5.4%) because the introduction of a guaranteed income could cause some tax credits to be withdrawn.
The guaranteed basic income in Canada is still under discussion: so far, the Government of Canada has expressed no intention of introducing this system.
