Ontario basic income pilot project to launch in Hamilton, Lindsay and Thunder Bay

Premier Kathleen Wynne announced Monday a plan to study basic income in Ontario, in a three-year pilot project based in Hamilton, Lindsay and Thunder Bay.

The province will explore the effectiveness of providing a basic income — no matter what — to people who are currently living on low incomes, "whether they are working or not," Wynne said.

Wynne said the pilot will provide the basic income to 4,000 households chosen from applicants invited "randomly" by the province in the coming weeks.

A single person could receive up to about $17,000 a year, minus half of any income he or she earns. A couple could receive up to $24,000 per year. People with disabilities could receive up to $6,000 more per year.

"People are anxious about their jobs; they're anxious about their futures," she said. "They're worried about the soaring costs of renting or buying a place to live."

People are especially concerned for those who don't start out wealthy, she said.

"Many people are concerned about what the world is promising for their kids," she said. "It's a world of global competition, reduced benefits, more and more part-time employment."

The premier said the three-year project will start with people making "just under $17,000 a year, but even that amount may make a real difference to someone who is striving to reach for a better life.

"We have chosen these communities intentionally because they are the right size and they have the right mix of population," Wynne said.

"We need to address the concerns of those who worry about falling behind, even as they work so hard to get ahead."

The amount is not "extravagant," she said, but it sends a message:

"It says to them, 'Government is with you; the people of Ontario are with you,'" she said.

4,000 households to be studied

Joining Wynne were Minister of Community and Social Services Helena Jaczek and Chris Ballard, the minister responsible for the province's poverty reduction strategy.

Jaczek said that people in the program will be randomly contacted from each region's low-income population and invited to apply.

The program will cost $50 million a year for each of the three years and 4,000 households will participate. That will include 1,000 people from the Hamilton, Brantford and Brant regions.

People who receive medical and dental benefits from the province under other welfare programs would not have to give those up.

The ministers have been spearheading the province's effort to experiment with basic income. The strategy for reducing poverty involves "a system of automatic transfers for those beneath an income threshold," according to a discussion paper on the topic commissioned by Wynne and the ministers last summer.

The province has said it will launch the pilot project providing money to low-income households with no strings attached.

'There's so much poverty'

Elizabeth McGuire, who chairs the Campaign for Adequate Welfare and Disability in Hamilton, said after the speech she was "blown away" and pleased the program would launch in Hamilton.

"Because there's so much poverty here in the city. And we have so many neighbourhoods which are so clearly defined but are yet so economically depressed because of the loss of manufacturing," she said. "There's no solution other than basic income, but I didn't believe the government was hearing us."

She said Wynne's announcement was the government doing "the right thing."

Deirdre Pike, who works as a senior social planner at the Social Planning and Research Council, echoed that.

"We have people in Hamilton, 7,000 of them, waking up today, they earn about $7,000 a year — I bet a lot of them will be applying to get $17,000 a year and see how that will change their lives," she said.

'Working poor ... stand to benefit the most'

Academics who study basic income said the pilot gives a chance to see how the idea plays in a changed economy.

"I think really it's the working poor who stand to benefit the most from this kind of a program, the people who are out there trying to get a job, trying and possibly working part time, working a series of part-time jobs, who can use this program to gain the kind of stability that might be able to let them move ahead a little bit and develop a career," said Evelyn Forget at the University of Manitoba.

Money with no strings attached removes barriers for someone who receives disability assistance but also wants to work, said Michael Veall, an economics professor at McMaster University.

Filling out all of the paperwork to get a job while collecting disability, and then worrying about whether the government will think you really have a disability, can be draining, he said.

"All these things are really difficult, and they sap people's energy, and they cause lots of economic stress in the household," Veall said.

Wynne said the government will be closely monitoring the pilot, but didn't commit today to extending the program once the three years are up, even if the program is a success.

Updates from Monday's announcement

CBC Hamilton's Kelly Bennett covered the announcement live. On mobile and can't see the updates below? Click here.

kelly.bennett@cbc.ca