Canada cancels basic income experiment
7th August 2018
By Lyndsey Hall
The Canadian province of Ontario has cancelled its basic income pilot program after just one year, two years earlier than originally planned.
The program gave 4,000 low-income participants an annual stipend of $13,000, or $19,000 for couples, in an effort to determine whether a basic annual income is more effective than other social programs. If recipients worked while receiving the benefit, they agreed to give the government 50% of their income. They were also required to opt out of some government social services.
The concept of a universal basic income has become increasingly popular worldwide in the last few years. Finland implemented its own experiment in 2017, providing 2,000 participants with €560 (£490) tax-free per month for two years, costing the Finnish government €20 million. In California, the city of Stockton plans to launch a basic income experiment in 2019, in which low-income residents will receive $500 per month. Silicon Valley is also backing similar experiments in other California cities, and Hawaii passed a bill in 2017 to start exploring what it would take to create a basic income program of its own. Barcelona is currently in the middle of its own experiment, which launched in October 2017, involving 2,000 participants, with half acting as a control group and half receiving between €400 and €525 (£350 and £460) per month for two years. The money is paid to households, rather than individuals, and some recipients are required to attend support programmes related to employment, housing and community action.
Scotland is also taking the first steps towards holding its own trial. Last November, first minister Nicola Sturgeon announced the Scottish government would provide a £250,000 trial to support the first basic income trials in the UK. The four authorities involved in the two-year pilot include Glasgow and Edinburgh, but it’s unclear when the trial will start or what the finer details will be.
Many prominent politicians and entrepreneurs, including Facebook founder Mark Zuckerberg and Tesla CEO Elon Musk, support the idea of a universal basic income as a way to offset the jobs and income lost to technological advancement and automation. Those opposed to the concept claim it is fiscally irresponsible and could discourage people from working.
The decision to end Ontario’s pilot program comes as part of a larger effort to reform the province’s social assistance programs. In June, after fifteen years of rule by the liberal party, the Progressive Conservatives Party took over the province’s government. An announcement was made that instead of continuing to put money into the experiment, which cost $115 million over three years, the government would “focus resources on more proven approaches”. The announcement came as a surprise, after a spokesperson for the Progressive Conservatives Party previously said the new leaders would continue the program and were looking forward to seeing the results. The Ontario Liberal Party is now calling for the program to be reinstated.
The Finnish government has recently decided not to extend its own basic income experiment when it comes to an end later this year, and the results will be available for assessment in late 2019. The social insurance company running the trial, Kela, requested additional funding to provide a group of employed workers with the basic income in addition to the unemployed group, in order to create a more accurate picture, but the Finnish government rejected the application. The government is now reviewing other schemes for reforming the Finnish social security system.
What are your thoughts on the universal basic income? What do you think the Finnish experiment’s result will show? Leave your thoughts in the comments.