Basic Income: A Plan to Rip Away Supports from Disabled Canadians and Orphans (not a joke)

Mike Moffatt
8 min readJul 8, 2020

TL;DR version: Yesterday’s PBO release once again proves that a cheques-for-cuts Basic Income program would make the lives of disabled Canadian substantially worse, by eliminating any (non-income) consideration of need, replacing equity with equality.

With governments around the world implementing cash support systems to deal with the economic fall-out of COVID-19, there’s been a renewed interest in the idea of introducing some form of national Basic Income / Guaranteed Annual Income.

There’s been any number of Canadian Basic Income (BI) proposals floating out there over the years; Prof. Lindsay Tedds has a helpful Google Sheet detailing many of the more detailed ones. Most follow a “cheques-for-cuts” approach: Partly finance their BI system through the elimination of (supposedly) redundant programs, with the rest being financed by higher taxes or increased deficits.

The problem with this approach: Those programs aren’t redundant at all, and their elimination would grievously harm the most disadvantaged in our society, including disabled Canadians and orphans. This was made abundantly clear in a report issued yesterday by the federal Parliamentary Budget Office (PBO).

British Columbia Senator, Yuen Pau Woo, a Basic Income supporter, asked the PBO to estimate what a Basic Income would have cost the federal government over the last six months, including the savings to the federal (and provincial) treasuries from the elimination of “redundant” programs. A typical “cheques-for-cuts” approach to a Basic Income.

Before I get into the details of the proposal, it’s important to note that Senator Woo, and the Basic Income movement is dedicated to improving the lives of Canadians and would be horrified by the idea that the cuts in their plans would hurt the most marginal and vulnerable in our society. The problem with these plans is not the intent of the advocates, but simply that the advocates haven’t thought through the harms that their proposed cuts would cause.

Anyhow, here’s the specific details from the PBO report:

A parliamentarian requested that the PBO estimate the cost of a guaranteed basic income (GBI) program to ensure all Canadians between 18 and 64 have income of at least 75% of the Low-Income Measure (LIM; $24,439 for an individual and $34,562 for a couple) for the last six months of the fiscal year 2020–21.

The parliamentarian directed that the PBO should use the parameters set out in Ontario’s 2017 basic income pilot project. This pilot guaranteed individuals and couples with at least $16,989 and $24,027 of income per year, respectively.

As directed by the requestor, PBO presents three estimates based on scenarios that phase-out the benefit by $0.50, $0.25 and $0.15 for each dollar of employment income.

The answer, the program (before cuts), would cost between from 46–96 billion over 6 months (or 92–192 billion per year):

Needless to say, 92–192 billion a year is a whole lot of money; the federal government’s entire expenditure in a normal year is 300–350 billion. Yes, this figure would go down in a non-COVID year; a 2018 PBO report pegged the cost of the 50% reduction plan at 76–79.5 billion, rather than 92 billion. So that’s an extra 80 billion or so (or 20–25% of pre-COVID) federal government expenditure they would need to finance through some combination of higher taxes, spending cuts, or increased deficits.

The “cheques-for-cuts” basic income model would partly finance this through the elimination of other programs, which Senator Woo had asked for in the report. The PBO found the savings to be roughly $15 billion over 6 months (or $30 billion over 12), leaving the yearly (net) cost of the program at $50 billion ($80B-$30B) in good economic times:

But let’s take a look at where those $30 billion a year in “savings” come from. The PBO was thorough enough to include an appendix of all the programs that would be eliminated to partly finance a basic income:

This is where it gets highly problematic. Let’s look at some of these “redundancies”. We have:

Caregiver tax credit: A program designed to help offset the costs of caring for a family member who have an impairment in physical or mental functions.

Disability tax credit: A program designed to allow for “some relief for disability costs, since these are unavoidable additional expenses that other taxpayers don’t have to face”.

Medical expense tax credit: A program to help families with their out-of-pocket medical expenses. So if a family needs a $40,000 wheelchair for their child, they can get some of these costs reimbursed.

Then there’s Workers Compensation Benefits tax-credit. Let’s take a look at what these are:

Really? One of the first places we’re going to go to finance a basic income is by clawing back survivor benefits for orphans who lost a parent in a workplace accident?

Who in their right mind could possibly think this is a good idea?

Then there’s the last line… “Social Assistance”, which in Ontario includes Ontario Disability Support Program (ODSP) and Ontario Works (OW). Eliminating either one of these is problematic, but ODSP particularly so.

A few commentators have suggested that Ontarians with disabilities would be slightly better off with a Basic Income than with ODSP, because ODSP pays more. This isn’t true, for a few reasons:

  1. Remember, the plan just doesn’t take ODSP away from them, it also takes away GST credits, sales tax credits, all of those other medical supports. You have to look at the package as a whole, not just one component.
  2. ODSP isn’t just cheques: it also provides employment supports and health benefits.
  3. Many/most disabled Ontarians are not on ODSP, and would lose disability tax credit, medical tax credits, etc., far in excess of what they pay in basic income.
  4. Shouldn’t the point of a Basic Income be to help the most marginalized and vulnerable in our society? Persons with disabilities are often those people. What’s the point of spending $50B more per year to, at best, make persons with disabilities no worse off? Can’t we strive for better?

These problems with a cheque-for-cuts Basic Income have been well-known for some time; the Ontario Coalition Against Poverty (OCAP) wrote a 50-page book about the harms a Basic Income would have on Ontarians living in poverty. Here are AJ Withers and John Clarke of OCAP on the damage that Basic Income would have on Ontarians with disabilities, in the context of the Ontario BI pilot:

The Ontario Report suggests that disabled people get $500 extra in recognition that the ‘costs of living with a disability’ are higher than those faced by non disabled people. (Note: The PBO proposal also contained this feature). However, this isn’t true in the same way across the board. The expenses of someone having to pay the daily cost of a service dog, someone who needs special dietary items, someone who must pay for attendant care, someone who has to pay for ASL interpretation or someone who has to replace a $40,000 wheelchair are all very different. If BI were used as a pretext to eliminate other systems of support, there are a whole range of needs that different disabled people have that would be placed out of range for them.

This, in a nutshell, is the entire problem with a Basic Income (which explains why the take-up rate for the Ontario pilot was incredibly low — the Ontario government initially invited 37,000 Ontarians they identified as being good candidates for the pilot. Only 150 accepted the offer, a take-up rate of less than one-half-of-one percent.) Basic Income is a one-size-fits-all approach that doesn’t consider a person’s need beyond their taxable earnings. You could be a single parent with a child with autism, or a 22-year-old son of a Bay Street lawyer; the program treats you entirely the same way, and rips away the supports from those in need. Instead of having equity, where we take into account needs:

To this:

Now none of this is to suggest that we should stick with the status-quo, and Basic Income advocates are right to point out the inadequacy of our current systems of supports for persons with disabilities (among others). As Withers and Clarke wrote about the Ontario pilot, there is a third way:

Right now, we are being told that we are at a crossroads and there are two possible futures. One in which things remain the same with inadequate social assistance rates and rampant poverty or one in which everyone gets a BI payment at 75% of the poverty line in Ontario, making it supposedly easier to escape from poverty altogether…

One of the main arguments for BI is that social assistance is deeply flawed: the rates are too low and it is punitive and degrading. However, it isn’t necessary to pin hopes on BI to fix these things. The Government could raise social assistance rates to decent levels but it has made the deliberate choice to perpetuate the suffering of the poorest people in Ontario. The Government could eliminate the policies and structures that make social assistance so punitive. It could make the system fair and respectful and expand benefits to all disabled people but it chooses not to…

Rather than pin our hopes on the flawed concept of BI, so easily implemented in ways that further a regressive agenda and harm disabled people, we suggest fighting for adequate income, living wages, improved, expanded and accessible public services and income support systems that are adequate and free of surveillance and moral policing. This won’t be won by trusting governments to do the right thing but through strong collective struggle.

Basic Income is a very expensive way to make the lives of some of Canada’s most vulnerable even worse. We need to move entirely in the opposite direction.

In the follow-up piece, An Ontario Program Shows the Cruelty of the Basic Income Cheques-for-Cuts Design, I show how a real-world program, designed on Basic Income principles, hurt kids with disabilities.



Mike Moffatt

Senior Director, Smart Prosperity. Assistant Prof, Ivey Business School. Exhausted but happy Dad of 2 wonderful kids with autism. I used to do other stuff.