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Universal basic income in Canada
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Universal basic income in Canada
Universal basic income in Canada refers to the debate and trials with basic income, negative income tax and related welfare systems in Canada. The debate goes back to the 1930s when the social credit movement had ideas around those lines. Two major basic income experiments have been conducted in Canada. Firstly the Mincome experiment in Manitoba 1974–1979, and secondly the Ontario Basic Income Pilot Project in 2017. The latter was intended to last for three years but only lasted a few months due to its subsequent cancellation by the then newly-elected Conservative government.
William Aberhart, Premier of Alberta, was inspired by Major C. H. Douglas Social Credit theory and tried to implement a basic income for Albertans during the 1930s. However, he was thwarted in his attempts by the Federal Government of the time.
In 1970, the Canadian Department of National Health and Welfare issued a white paper which both emphasized the ability of NIT to decrease poverty but at the potential expense of decreased work incentive. Specifically, the white paper stated:
An overall guaranteed income program...worthy of consideration must offer a substantial level of benefit to people who are normally in the labour market. Therefore a great deal of further study and investigation, is needed to find out what effects such a program would have on people's motivation and on their incentives to work and save. Until these questions are answered, the fear of its impact on productivity will be the main deterrent to the introduction of a general overall guaranteed income plan. (p. 126)
Following this stance, the National Council of Welfare advocated in 1976 for the implementation of the guaranteed annual income in Canada.
In order to determine real-life responses to NIT implementation, the US government undertook four income maintenance experiments; they transpired in New Jersey and Pennsylvania (1968–1972), rural areas of North Carolina and Iowa (1970–1972), Seattle and Denver (1970–1978), and Gary Indiana (1971–1974). These prospective large-scale field studies were truly remarkable due to their size and the fact that families were randomized to either an experimental arm (i.e., NIT) or control arm (usual tax practice). Three major objectives of these interventions were to measure the labour supply response of NIT recipients, understand the effect of varying the base guarantee level and tax rate, and to make a better estimate of the cost of implementing such a program.
In Canada, an analogous experiment called Mincome took place in Winnipeg and Dauphin, Manitoba, between 1974 and 1979. Importantly, the city of Dauphin served as a saturation site, since all 10,000 community members were eligible to participate (the elderly and disabled were exempt from the four American NIT experiments); four foci of Mincome were an economic arm (examining labour response), a sociologic research division (examining the family formation and community cohesion), an administrative programme, and a statistical division. Unfortunately, the ambitious project ran into significant budgetary problems early on and neither the newly elected Progressive Conservative government in Ottawa nor the Tory government in Manitoba felt strongly about providing further funding. As stated by Hum and Simpson:
The original budget of $17 million was never more than a wild guess and, in the event, proved far inadequate. The inflationary price increases of the 1970s, coupled with a larger than anticipated unemployment rate, meant that the proportion of the total going to programme expenses exceeded estimates and was not under the control of the researchers. (p. 44)
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Universal basic income in Canada
Universal basic income in Canada refers to the debate and trials with basic income, negative income tax and related welfare systems in Canada. The debate goes back to the 1930s when the social credit movement had ideas around those lines. Two major basic income experiments have been conducted in Canada. Firstly the Mincome experiment in Manitoba 1974–1979, and secondly the Ontario Basic Income Pilot Project in 2017. The latter was intended to last for three years but only lasted a few months due to its subsequent cancellation by the then newly-elected Conservative government.
William Aberhart, Premier of Alberta, was inspired by Major C. H. Douglas Social Credit theory and tried to implement a basic income for Albertans during the 1930s. However, he was thwarted in his attempts by the Federal Government of the time.
In 1970, the Canadian Department of National Health and Welfare issued a white paper which both emphasized the ability of NIT to decrease poverty but at the potential expense of decreased work incentive. Specifically, the white paper stated:
An overall guaranteed income program...worthy of consideration must offer a substantial level of benefit to people who are normally in the labour market. Therefore a great deal of further study and investigation, is needed to find out what effects such a program would have on people's motivation and on their incentives to work and save. Until these questions are answered, the fear of its impact on productivity will be the main deterrent to the introduction of a general overall guaranteed income plan. (p. 126)
Following this stance, the National Council of Welfare advocated in 1976 for the implementation of the guaranteed annual income in Canada.
In order to determine real-life responses to NIT implementation, the US government undertook four income maintenance experiments; they transpired in New Jersey and Pennsylvania (1968–1972), rural areas of North Carolina and Iowa (1970–1972), Seattle and Denver (1970–1978), and Gary Indiana (1971–1974). These prospective large-scale field studies were truly remarkable due to their size and the fact that families were randomized to either an experimental arm (i.e., NIT) or control arm (usual tax practice). Three major objectives of these interventions were to measure the labour supply response of NIT recipients, understand the effect of varying the base guarantee level and tax rate, and to make a better estimate of the cost of implementing such a program.
In Canada, an analogous experiment called Mincome took place in Winnipeg and Dauphin, Manitoba, between 1974 and 1979. Importantly, the city of Dauphin served as a saturation site, since all 10,000 community members were eligible to participate (the elderly and disabled were exempt from the four American NIT experiments); four foci of Mincome were an economic arm (examining labour response), a sociologic research division (examining the family formation and community cohesion), an administrative programme, and a statistical division. Unfortunately, the ambitious project ran into significant budgetary problems early on and neither the newly elected Progressive Conservative government in Ottawa nor the Tory government in Manitoba felt strongly about providing further funding. As stated by Hum and Simpson:
The original budget of $17 million was never more than a wild guess and, in the event, proved far inadequate. The inflationary price increases of the 1970s, coupled with a larger than anticipated unemployment rate, meant that the proportion of the total going to programme expenses exceeded estimates and was not under the control of the researchers. (p. 44)