Close Up of Senator's Desk in the Canadian Senate

Independent Senator Kim Pate of Ontario has reintroduced Bill S-233 for a guaranteed livable basic income, which had its first reading in the Senate on Wednesday.

The bill, if enacted, would require the minister of finance to develop a national framework to provide all Canadians over age 17 a guaranteed livable basic income (GLBI).

Bill S-233 was previously introduced in 2021 and reached consideration by the Senate’s Standing Committee on National Finance before Parliament was prorogued.

In April 2021, the Parliamentary Budget Officer (PBO) estimated that a program guaranteeing Canadians between 18 and 64 years old an annual income of $16,989 and couples $24,027 would cost $87.6 billion per year. The benefit would be reduced by $0.50 for every dollar earned, so it disappears entirely for individuals at $33,978 and for couples once they reach $48,054. People with disabilities would receive an additional $6,000 per year.

If the PBO’s hypothetical plan, which involves eliminating a variety of tax credits often used by the middle class, were implemented, poverty rates would fall by 49%. While the poorest 40% would be better off, 60% of households would be marginally worse off, according to a senatorial factsheet.

The PBO calculations were only based on the income of an applicant and their partner, implying that adult children living with high-income parents might receive support. If benefits were instead calculated based on the census family, it could reduce costs by 40% while reducing the poverty rate by about as much as the PBO design, the factsheet said.

Under the modified design, there would be no cuts to tax credits, and no current beneficiary of social programs would be worse off.

If implemented properly, GLBI could reduce the government’s fiscal burden on costs such as health care, the judiciary system and lost economic growth estimated at $80 billion a year.

Research by the University of Saskatchewan in 2023 using a design similar to the PBO’s estimated that every dollar spent on GLBI generates $1.06 in savings. Similarly, research by Princeton University on $7,500 of unconditional cash transfers to homeless people in Vancouver generated savings of $8,277 per individual per year through reduced reliance on social and health services.