Backlash Erupts in Canadian Province After Government Kills Basic Income Test
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By RENAE REINTS
August 3, 2018
Ontario, Canada has scrapped its experiment with basic income—a hot but largely untested idea for reducing poverty—before any results could be gleaned, sparking criticism from researchers and outrage from program recipients.
The project, introduced in 2017 and expected to last for three years, provided a basic income to 4,000 low-income people. But with the election of conservative Doug Ford[ as Ontario’s premier in June, the program was cancelled earlier this week.
“I feel I have been stabbed in the back by my own government,” one income recipient told Business Insider. “I honestly have no idea what’s happening next because there has been no communication whatsoever.
Program participants who earned less than $34,000 Canadian annually ($26,000 in U.S. currency) received up to $17,000 Canadian annually. Couples making under $48,000 Canadian received up to $24,000 Canadian, minus 50% of earned income.
The program was ended because ministry officials felt it didn’t help residents become “independent contributors to the economy,” according to the Canadian Broadcasting Corporation. One researcher involved with the program, however, said there wasn’t enough data to make this statement.
“There’s no conceivable way that they were told the project wasn’t working,” the researcher told CBC, asking to remain anonymous. “We just don’t have any data to know whether it was working or not.”
The program’s cancellation also breaks Ford’s campaign promise to keep it going. Social Services Minister Lisa MacLeod told reporters on Wednesday that the administration hopes to create “a better plan” within 100 days.
“[There’s] the decision in the campaign and then you find the realities of when you’re in government,” said MacLeod, according to the CBC. “My commitment to the people of Ontario, particularly the people who are most vulnerable, is that we will get it right.”
However, program participants are mostly angry and disheartened. One program recipient, who has lived in poverty for 15 years, told Business Insiderthat the basic income pilot was “a huge ray of hope,” and that the future is now uncertain.
An advocate for basic income, Scott Santens, shared his anger on Twitter after the announcement about the program’s cancellation. “I am so angry right now, I am shaking,” he wrote. “Can you imagine a politician pulling the plug on a vaccine that was dramatically reducing cancer so much that it’s already arguably unethical to not immediately expand it to everyone? This is wrong.”
Universal basic income is an idea that has been floated for decades. It’s been tested in countries like Finland and Kenya, and may reach U.S. urban centers like Chicago and Silicon Valley.
Ontario Premier Doug Ford speaks at Algoma in Sault Ste. Marie, Ont., on Tuesday, Oct. 24, 2018 in Sault Ste. Marie, Ont. (BRIAN KELLY/POSTMEDIA NETWORK)
The deficit-plagued Ontario government still plans to go ahead with a tax credit for minimum wage workers, Premier Doug Ford says.
“So anyone earning minimum wages will be paying zero tax,” Ford said Monday.
The Premier confirmed the plan had been to make it effective January 1, but then said he would need to confirm the details with his Finance Minister Vic Fedeli.
The PC government promised during its spring election campaign that it would introduce a minimum-wage tax credit so that no one earning that amount would pay any provincial tax.
According to information released by the PCs at the time, the tax credit would save low income earners up to $800 a year at a cost to the Ontario government of $558 million a year.
Almost one million Ontario residents earn minimum wage.
The PC promise was an alternative to the Liberal government’s plan of increasing the minimum wage to $15 an hour as of January 1 2019 from the current $14 an hour.
The PCs also promised to cut income taxes by 20% for the second income tax bracket which they said would save people up to $786 annually — a $2.26 billion-a-year tax cut starting in year three of the government mandate.
At the same media availability, Ford defended his government’s decision to cut three university campus expansions planned by the previous Liberal government.
“They didn’t have the money. It was reckless government from the Liberals,” Ford said.
“We want to make sure we pay down the $15 billion deficit. The pressure is staggering.”