Capstone Project : Universal Basic Income could be a way out of poverty for millions of Canadians.

Universal Basic Income (UBI) has been hotly debated in the last few years as an option to help millions of Canadians out of poverty amidst rising costs of living. 

With the cost of living at an all-time high, it’s becoming increasingly difficult to afford necessities in cities all across the country.

Talia Bernstein, a researcher for Daily Bread said people are having to make tough decisions about where they spend their money.

“There just aren’t enough options for people earning low-income wages, even with help it’s not always enough,” she said.

UBI is a system that has the potential to significantly better all of its participants' lives by giving people the resources to meet their basic needs. 

However, research throughout the country has shown that it should be considered as a real option going forward.

UBI has been shown to be a system that has the potential to significantly better all of its participant's lives by giving people the resources to meet their basic needs. 

In Ontario alone, an estimated 16 per cent of households struggle with food insecurity according to PROOF.

Bernstein said that food insecurity in the GTA is a direct cause of the cost of living crisis and the lack of options for those struggling to earn enough to support themselves.

“UBI can mean a variety of things, if people were able to make an adequate income, then the foodbanks would be out of business,” she said.

In addition to this, rent in Ontario has reached unprecedented heights with the average rent for a one bedroom apartment in the GTA reaching $2,188 in March, 2023 according to the Ontario government rent reports.

Bernstein said that unaffordable housing was one of the major issues that could change drastically under a UBI program.

As the cost of basic needs such as food and shelter rise throughout the province and the country, individuals are faced with a glaring issue. 

Wages and new jobs are not rising at the same rate, this is leaving millions of Canadians with limited ways to meet their most basic needs.

Although there are welfare systems in place that should help alleviate the pressures of the gap in wages. The system is overwhelmed with the number of people that need it to survive.

In 2022 it was one in five families in Ontario rely on some kind of food bank or service, according to PROOF. 

UBI could be a way to significantly improve people's lives by taking away some of the financial burdens weighing them down.

Several MPPs and political leaders throughout the country support UBI or Guaranteed Basic Income (GBI) in some form or other.

Jill Andrews was one of the Ontario MPPs who advocated for UBI pilot programs in the province.

“No matter a person's circumstance, the very basics of food and shelter are their human rights. A guaranteed basic income has shown to be an effective model to achieve this in Ontario, while boosting the province's overall economy and contributing to future growth,” she said.

However, it’s important to note the difference between these two concepts.

UBI refers to a flat sum of money that would be given out to everyone annually or monthly. This would be a cash sum of money that would provide a safety net for everyone. 

At the end of the year the government would use the taxation system to recoup some or all of that money from higher-paid individuals who didn’t need it.

GBI on the other hand, proposes a non-taxable sum of money only to families and individuals who fall under a certain income line.

The structure and implementation of GBI follows the guidelines of government welfare programs more closely than UBI does. 

One of the key ideas of GBI that UBI might be lacking is the direct access to money for those who need it more urgently. 

Under GBI there should be less hoops to jump through since there is not process of taxation. 

Of course, this can only occur if the system is accurate enough in its distribution of wealth so that applicants receive the correct amount and don’t have to appeal to the system for corrections as they would under GBI.

According to PROOF A guaranteed livable basic income has “the potential to address income-related problems of food insecurity, which would improve people’s health, offset considerable public health care expenditures, and reduce the burden household food insecurity now places on health care resources.”

In fact, there are already programs applied by the federal and provincial governments that come very close to what GBI proposes.

An example of one of these welfare programs is the Canadian Emergency Jobless Benefit which was set up during the COVID-19 pandemic.

It aimed to support those who were unable to work due to the government restrictions during the pandemic. 

Beverly Harlow, one of the people that benefited from this scheme said that she felt it gave her options she didn’t know she had.

“It really empowered us. It’s done more than just pay the bills. It’s given us options, and it’s given us a little bit of freedom that we’ve never really felt before,” she said.

Wayne Lewchuk, a professor, and economic historian at MacMasters university compared this pandemic scheme to other more formal UBI pilot projects conducted in Ontario.

Seeing how well welfare and relief schemes work as well as UBI pilot projects shows us that these don’t have to be temporary projects with an expiration date.

“Universal basic income is modern policy for a modern labor market,” Lewchuk said.

Most of the experiments conducted by the Canadian government around these kinds of programs have been using the UBI model.

However, although they are intended to have almost the same outcome, they would work in different ways and would have to be implemented differently.

This is one of the reasons that some politicians and advocates for these systems sometimes have a strong preference for one over the other.

UBI Works suggests, the optimal system would be somewhere between UBI and GBI.

UBI has been shown to have the potential to help most people live better lives overall. However, one of the areas that would be most impacted is food security.

The recent Submission to the Senate Standing Committee of National Finance Study on Bill S-233 by PROOF shows that 6.9 million Canadians are living with some level of food insecurity due to lack of funds.

This inadequate access to certain foods and types of meals takes a serious toll on the health of Canadians and the overall healthcare system as a result.

The overwhelming number of people who are unable to provide proper nutrition for themselves and their families because of rising costs should be an indicator to us that the current economic systems are not working.

According to PROOF there is a public perception that food inequalities can be solved through temporary subsidies or food banks. However, the only truly effective way you have long lasting change is to look at the root issue.

In this case, the cause for inequality is the high cost of living and lower wages.

“Food banks can’t help solve food inequality on their own, there are other issues that need to be looked at like the high prices of rent,” Bernstein said.

A 2022 PROOF study shows that having a minimum wage job and taking support for low-income workers like the Canada Workers Benefit are not enough to ensure adequate income for basic needs. 

Having an income floor for working age Canadians similar to those that exist for other groups such as older adults and children would elevate quality of life significantly.

An implemented income floor would be the same as implementing a UBI system.

UBI systems already exist in Canada in some forms and for certain groups such as the Canada Child Benefit. However, individual welfare schemes although good, cannot reach the scope that a government enforced system such as UBI could.

Having individual schemes as opposed to having UBI also allows more bureaucracy into the system which makes it less efficient and more difficult to access for certain people.

Both the Ontario pilot project and the Mincome project show that as soon as a basic income is introduced to a group of people their basic needs are met which include food.

A UBI system could therefore extensively solve food inequality issues in Ontario as well as in the rest of the country. This is especially true in more rural areas with less food options.

There have been a number of UBI experiments conducted throughout Canada since the 1970’s when the theory first gained some more serious traction. 

The Mincome experiment began in 1974 in Dauphin, Man., The Mincome experiment came at the tail end of a wave of social reforms in the country. 

Universal health insurance laws had just been passed throughout the country two years prior and social movements seemed to be at an all-time high.

Mincome was the first real attempt at answering the question of how people would react when people were given money with no strings attached.

The main question that people had was whether or not being given money would stop people from working.

The answer came pretty quickly through observations from the experiment leaders as well as the official report

The report stated, work hours were reduced in some cases but never more than  by 10 per cent. 

It was reported that those who reduced their work hours used the extra time to go back to school in some capacity or to apply for higher-paying jobs.

This is one of the common points that many UBI experiments tend to have in common. 

One of the first work-related figures that show up consistently in UBI experiments shows that having enough money to meet people's basic needs means that they can invest more time in finding ways out of their financial situations.

This is often reflected in looking for other jobs or pursuing qualifications that would then allow them to look and apply to those higher-paying jobs.

This was also observed in the 2017 Ontario UBI pilot program called Southern Ontario’s Basic Income Experience, introduced by the Kathleen Wynne Liberal government.

During this three-year program, selected people from Hamilton, Brantford and Brant County were offered to take part in a UBI experiment.

The pilot project enrolled 4,000 low income earning individuals and offered a fixed annual income of about $17,000 for individuals and $24,000 for a couple. 

Throughout the experiment the participants were encouraged to keep working and could earn up to $34,000 before being cut off by the government.

Students and professors from the former Ryerson University, now Toronto Metropolitan University, and McMaster University in Hamilton used the data collected through this experiment to write up a report. 

By all accounts, the pilot project was a success. A 2022 UNESCO report analyzing the initial findings from the Ontario government are overwhelmingly positive.

The report highlights the health benefits of UBI, 83 per cent of the participants reported better mental health than before and 72 per cent of people reported becoming more involved in physical activities.

One of the biggest findings of this particular UBI experiment was the huge impact that UBI can have on the healthcare system.

The report showed that the data from the experiment clearly pointed to the fact that when people were given a basic income one of the first things to change was their physical and mental health.

Following the data produced in the experiment and then published by UNESCO, there is a clear throughline between healthier individuals and a better working health system.

One of the great issues that we are faced today in Ontario is having an overwhelmed healthcare system. 

This is a complex issue that stems from many different events of the last decades. However, one of those issues is doctors and nurses being overworked, underpaid and unable to face the incredible demand. 

According to professor Lewchuk, by implementing UBI two sides of the healthcare issue could be tackled.

On one hand, healthcare workers would not be under the same kind of financial stress, and on the other hand, less people would need to go to hospital since overall health would be better.

This would mean that hospitals and health centers would be less overwhelmed and would be able to attend to people who need them more quickly. 

PROOF 2022, changes in general health status before recieving UBI

Some of the participants in the experiment were asked to give their anonymous testimony about how the experiment changed their day to day experience and their relationship with their health.

Overall they reported that their physical and mental health had benefited from the experiment which resulted in them being less likely to have to go to the doctor or hospital.

Nearly 80 per cent reported their health improved and less than 10 per cent reported their health declined. 

This data is concurrent with the health data that came out of the Mincome project in the 70s.

Audrey Laporte, a professor of health economics at the University of Toronto said that when recessions occur or people have less money to spend, the healthcare system always suffers.

She added that when unemployment goes up so do the diagnosis for chronic illnesses. This could be attributed to a lack of preventative measures taken.

On the other hand, when people have enough money to cover their basic expenses, they have more resources to ensure that their health is better in their day to day life which prevents health issues from deteriorating to the point of needing serious medical attention.

The journal of public health also points out that financing a healthcare system is always expensive for a government with some variations depending on the levels of private and public care access. 

However, having better overall health would mean that the government would spend slightly less on its healthcare systems and they would in turn become more accessible to those who need them.

This is particularly important since Laporte highlights that accessing healthcare is always far more difficult for those living under the poverty line.

These numbers show that this kind of UBI program could make a significant difference in people’s health and by extension, in the whole Canadian healthcare system.

Implementing a UBI system would have many benefits for the overall population, however it’s a platform that can be pretty divisive among politicians in Ontario and Canada as a whole.

Both the Mincome project and the Ontario Pilot program where stopped as soon as conservative governments came to provincial power.

Changing welfare systems to adapt to UBI would also require a great deal of coordination among government departments. 

In addition, it might take some time for many people tp get over the shift in perspectives that comes with UBI.

Changing the way that labour and work compensation is seen might take some time.

Nevertheless, these shifts towards a future with UBI would be overwhelmingly positive for a large part of the Canadian population.