Labour leaders in Ontario are criticizing the provincial government's plans to pilot a guaranteed basic income for individuals with low incomes, saying it doesn't address a broken social assistance system and precarious job market that keep people trapped in a system of poverty.
Fred Hahn, president of CUPE Ontario, called the announcement a "lost opportunity." Instead of spending money on a pilot project, the government should be raising social assistance payments and ensure people can find stable, well-paying jobs, he says.
"At its heart, the best version of a basic income program ensures people are lifted out of poverty," said Hahn. "This, in fact, does nothing to lift people out of poverty."
The government announced the details of its plan in late April.
The pilot will test whether a guaranteed basic income can help improve people's quality of life, including their mental and physical health, education, access to employment and food security. It's different from current social assistance programs, Ontario Works (OW) and the Ontario Disability Support Program (ODSP), but, like these programs, will be administered by the Ministry of Community and Social Services.
These programs will continue to run during the pilot project. rabble.ca asked the Ministry of Community and Social Services in an email if a guaranteed basic income could eventually replace these programs. In response, the ministry said that the pilot is about "exploring" a "simple and more effective way to support more people living in poverty." The information gathered from this project will help inform future decisions about "reforming" income security, the ministry wrote.
How the program works
In the pilot, a single person will be eligible to receive up to $16,989 per year; a couple up to $24,027. A person with a disability is eligible to receive an additional $6,000 per year. These amounts are 75 per cent of the Low Income Measure. Participants will continue to receive provincial and federal child-care benefits while on the program. Payments will be received monthly.
People receiving a guaranteed basic income can work. But their basic income will be reduced by half of what they earn. If a single person earns $20,000 from employment, their basic income would be reduced from $16,989 to $6,989. Participants who receive employment insurance or the Canadian Pension Plan will have their income reduced dollar by dollar, the government's website says.
People who currently receive coverage for medications as part of OW or ODSP will still receive that coverage, the Ontario Drug Benefit. Recipients of ODSP will continue to receive dental benefits if they had them before joining the pilot.
The pilot will launch in Hamilton, including Brantford and Brant County, and Thunder Bay in late spring. It will begin in Lindsay in the fall. Randomly selected individuals in those areas will receive applications in the mail and can apply to be part of the program. Up to 4,000 people will be eligible to receive the basic income payment.
To be eligible, people must be between the ages of 18 and 64 when the program starts. They must have a low income and be living in the area for at least 12 months before the program begins.
There will also be a control group of 2,000 people across these locations who meet the eligibility requirements but do not receive the guaranteed basic income.
Not enough to address poverty
Smokey Thomas, president of the Ontario Public Service Employees Union (OPSEU), said that while he agrees with the concept of basic income, he worries the pilot "gives (the government) an excuse to do nothing about poverty for the next three to five years."
Hahn told rabble.ca he was concerned that individuals receiving OW or ODSP payments before joining the pilot would lose additional supports, like addiction counselling or support finding employment. His union represents workers who deliver those services. He also expressed concern about how people will return to social assistance programs once the pilot concludes. People need more than money to leave poverty, he said. They need affordable housing and access to good child-care services.
The pilot "misses the mark on the reality that people aren't just all consumers in a marketplace. We are citizens and neighbours, and we need the collective support of one another," he said. "It's the role of government to provide services that help make people's lives better."
The pilot also doesn't address current pressing employment challenges: namely, an abundance of minimum-wage and precarious jobs.
Thomas expressed concerns a basic income could become a "subsidy for businesses" and not encourage employers to create good jobs. Thomas, who readily admitted he's not a fan of the Wynne government, saying the recent budget "sucks," said the government would do better to raise social assistance rates and not spend so much on infrastructure.
Ontario's business community echoed similar concerns.
While the Ontario Chamber of Commerce (OCC), did not formally participate in the consultation process, it will be watching the pilot closely, said Ashley Challinor, the chamber's director of policy. The chamber's members have various opinions about the pilot. The chamber wants to make sure the government integrates this pilot with existing government services and spends money wisely. It's also interested to see if people who receive a basic income will still seek jobs.
The pilot is just one way of responding to the complex labour realities facing Ontario at this time, said Challinor. People are struggling to find good jobs, and employers are having difficulty hiring workers who are suited for the jobs available. Employers are noticing various gaps, ranging from potential employees needing more technical skills, to those struggling with "soft skills," said Challinor.
"The hiring market is very challenging for employers," she said. Members from all regions and businesses ranked hiring difficulties as their main challenge. "But at the same time, we're looking at a future that's rapidly approaching where we may not need as many people to work, or the nature of how individuals interact with work is going to be very different."
Automation and artificial intelligence are taking away both low-skill and high-skill jobs, she said, noting she's heard of automated divorce lawyers.
If the pilot goes well, it could be an opportunity for Ontario to become a leader in providing government services, she said.
In an email to rabble.ca, the Ministry of Community and Social Services said individuals who receive payments during the pilot project will still be able to access other income-based benefits and credits that aren't part of social assistance. ODSP employment supports remain available to anyone who has a disability, regardless of whether they receive social assistance.
Payments will be gradually phased out before the pilot project ends, and those who were receiving OW and ODSP before joining the project will be eligible to re-apply for those programs using the rapid reinstatement program.
People receiving basic income payments are not obligated to disclose this information to their employers, the ministry said.
The government also plans to create a separate, parallel, basic income program for First Nations. Planning for that is in the early stages. The Ministry of Community and Social Services told rabble in an email that individuals who live in First Nations reservations in the Hamilton, Brantford, Brant County, Thunder Bay and Lindsay regions will not be receiving application packages for the Ontario basic income program at this point.
Read the second part of our look at Ontario's basic income pilot program here.
Meagan Gillmore is rabble's labour reporter.