Canada Is About To Start Giving Away Free Money

It's part of a pilot program to reduce poverty.
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If people know for sure they'll have enough money for essentials, will they contribute more to society? That's one of the many questions Canada aims to answer with a new pilot program that will give free money to citizens for doing nothing.

The Canadian province of Ontario is getting ready to start an experiment in which it pays people a little bit each month to cover basic expenses. It's a type of social safety net called basic income, and it's an idea that's gaining steam in both progressive and libertarian economic circles (albeit in different forms) as a way to support the poor and the struggling while boosting economic growth.

The basic income trial is included in Ontario's 2017-2018 budget, which was introduced by the government in late February and is expected to pass soon. There are no specific figures yet for how many people will participate or how much money they would receive, but recent trials in Finland and the Netherlands have proposed between $800 and $1,000 per month.

The plan is part of a larger push to reduce poverty and expand the safety net in Ontario. The budget also includes a proposal to give free university and college tuition to low-income students.

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Ideally, basic income is large enough to allow a person to live very sparsely if he or she can't or doesn't want to work, but small enough that most people will still choose to have jobs. Unlike something like unemployment benefits -- which generally require proof that a person has lost a job in a specific way or for a specific reason, and also that he or she is looking for a new one as soon as possible -- basic income doesn't have strings attached.

Theoretically, a basic income gives people a cushion to spend longer periods of time finding the right job for them, as well as encouraging things like education and entrepreneurialism. At the same time, it supports the injured, the disabled and people who need extended time off to care for children or the elderly.

Essentially, it's the most basic form of redistribution.

"The poor are not unable, they are unfree to use the resources of the Earth to meet their own needs. We can restore that freedom without a big change in the system, just by taxing property to [compensate] the propertyless in the form of a basic income," Karl Widerquist, a basic income expert and political philosophy professor at Georgetown University's Qatar campus, told HuffPost.

One of the only real-life tests of basic income happened in a different part of Canada back in the 1970s. Dauphin, a city in Manitoba, nearly eliminated poverty between 1974 and 1979 under a program then called mincome, or minimum income. During the time the program was active, individuals received about $15,000 a year maximum (in today's American dollars), and families received about $18,000 a year maximum. Those base amounts were adjusted as the individual or family made more money: Every dollar a person or family made subtracted 50 cents from the basic income check. However, the program was shelved in 1979 after a change in Canadian government made it politically unpopular.

But the political winds have shifted again, and Ontario is ready to give basic income a try. Near the bottom of the "social assistance" subsection of the province's 2016 budget, this humble paragraph appears:

One area of research that will inform the path to comprehensive reform will be the evaluation of a Basic Income pilot. The pilot project will test a growing view at home and abroad that a basic income could build on the success of minimum wage policies and increases in child benefits by providing more consistent and predictable support in the context of today’s dynamic labour market. The pilot would also test whether a basic income would provide a more efficient way of delivering income support, strengthen the attachment to the labour force, and achieve savings in other areas, such as health care and housing supports. The government will work with communities, researchers and other stakeholders in 2016 to determine how best to design and implement a Basic Income pilot.

The idea of studying basic income idea is catching on in other nations as well -- including here in the U.S.

Y Combinator, the famous tech startup accelerator in California, recently announced it will fund a basic income study in order to answer the question: "Do people, without the fear of not being able to eat, accomplish far more and benefit society far more?”

The country of Finland similarly announced a basic income study several months ago, after yet another year of sluggish economic growth. It plans to give a small test group of citizens 800 euros (about $880) per month. It joins the Dutch city of Utrecht, which is also conducting a study on basic income this year. Several other Dutch cities are set to follow. The Dutch basic incomes are around $1000.

Neither libertarian Silicon Valley nor the socially democratic countries of Finland and the Netherlands are ready to say that they think giving money out to everyone without any strings attached is the right move -- but they are ready to spend time and money testing the idea out.

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