Idea: Basic Income for Canada

The idea of a Basic Income is not a new one. Canada even has it's own organization advocating a basic income.

Canada's Poverty Line is currently at $19,019 per person (individual, the number is different for couples and families) which works out to $1,585 a month. Half of which is $792.5

There are all sorts of proposals for how a Basic Income would work, but I'll present mine in what I feel is the simplest and easiest manner possible.

$792.5 is close to $800, and round numbers always sell better, so, we start using that figure.

Next, we make the policy as follows

1 - Each "family unit" gets $800
2 - Each person in that "family unit" gets $800

This means that me, Teddy, as the only member of the Teddy "family unit" would get $1,600. If I found a nice girl to marry, we would get $2,400. If we had a child, we would get $3,200. So on and so forth.

This applies to everyone. I get it, you get it, Harper gets it, the homeless person on the street gets it, the Rogers family gets it, a newborn gets it, a 120 year old gets it, everyone would get the basic income.

So, how would we pay for this?
The Basic Income would replace ALL 'universal' government transfers, and all transfers of money that are means tested.

So what does this include?

I am currently on ODSP, the Ontario Disability Support Program. Anyone passes the means test (IE is poor) and qualifies as "Disabled" in Ontario gets ODSP. The Basic Income would mean the end of ODSP.

Welfare would also be eliminated. As would pensions. The Baby Bonus would also go.

Currently, I get $1,098 a month on ODSP, so how would we pay for that extra $702?

Part of it will come from the wages of ODSP workers who are no longer needed. This won't cover all of it, however, as many of them will be needed to administrate the Basic Income, or to administrate targeted programs for those who need more serious help such as those physically or mentally incapable of taking care of themselves.

And the remainder of the money? That would come from taxes.

In order for this to work, we need to change income taxes. At $800+$800, $19,200 becomes the new "floor" that every Canadian makes in a year. As such, 0% income tax should be charged on this amount. After that, however, given the new "free money" we need to flatten out the curve of income tax at the lower end. As such, we should eliminate the 15% tax bracket and extend the 26% tax bracket to meet it.


We can do the math to estimate how much more in taxes a person would pay if they made exactly  $138,586 a year. The answer is $13,362. So such a person, who makes $138,586 a year would now be paying $18,930 more in taxes, yet receive $19,200 in basic income, meaning they are about $300 better off despite income taxes being hiked.

The remainder of the gap would be made up by savings from less wages.

This does not even take into account the savings from eliminating Pensions and Welfare.

There is still more complex math to be done. Under this system, Canada would now have a flat tax rate of 29%. Simply closing all the loopholes could bring in the additional revenue needed. It's also possible that that rate could be increased, or decreased, as needed.


Lastly, and most importantly, this only works with the co-operation of the Provinces. The program would need to be jointly funded and would not work if the provinces don't want it. This, perhaps, is the largest stumbling block to the entire idea.