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Designing a Basic Income Guarantee for Canada

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  • Boadway, Robin
  • Cuff, Katherine
  • Koebel, Kourtney

Abstract

We propose mechanism for implementing a two-stage harmonized Basic Income Guarantee with federal and provincial components. In Stage One, the federal government replaces its refundable and nonrefundable tax credits with an income-tested basic income delivered through the income tax system. The reform is revenue-neutral. In Stage Two, each province decides whether to implement a provincial basic income guarantee that is harmonized with the federal one but allows province-specific basic income levels. The provincial basic income replaces provincial refundable and nonrefundable tax credits as well as welfare and disability transfers, and is also revenue-neutral. All social services and contributory social insurance programs remain intact. An illustrative calculation using Statistical Canada’s SPSD/M model shows the financial feasibility of a national BIG of $20,000 per adult adjusted for family size with a benefit reduction rate of 30%.

Suggested Citation

  • Boadway, Robin & Cuff, Katherine & Koebel, Kourtney, 2016. "Designing a Basic Income Guarantee for Canada," Queen's Economics Department Working Papers 274697, Queen's University - Department of Economics.
    • Handle: RePEc:ags:quedwp:274697
    DOI: 10.22004/ag.econ.274697
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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