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Designing A Basic Income Guarantee For Canada

Author

Listed:
  • Robin Boadway

    ()

  • Katherine Cuff

    (McMaster University)

  • Kourtney Koebel

    (Queen's University)

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 CanadaÂ’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

  • Robin Boadway & Katherine Cuff & Kourtney Koebel, 2016. "Designing A Basic Income Guarantee For Canada," Working Paper 1371, Economics Department, Queen's University.
  • Handle: RePEc:qed:wpaper:1371
    as

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    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1371.pdf
    File Function: First version 2016
    Download Restriction: no

    References listed on IDEAS

    as
    1. Fleurbaey,Marc & Maniquet,François, 2011. "A Theory of Fairness and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521715348.
    2. Robert McClelland & Shannon Mok, 2012. "A Review of Recent Research on Labor Supply Elasticities: Working Paper 2012-12," Working Papers 43675, Congressional Budget Office.
    3. Boadway, Robin & Jacquet, Laurence, 2008. "Optimal marginal and average income taxation under maximin," Journal of Economic Theory, Elsevier, vol. 143(1), pages 425-441, November.
    4. Evelyn L. Forget, 2011. "The Town with No Poverty: The Health Effects of a Canadian Guaranteed Annual Income Field Experiment," Canadian Public Policy, University of Toronto Press, vol. 37(3), pages 283-305, September.
    5. Kanbur, Ravi & Keen, Michael & Tuomala, Matti, 1994. "Labor Supply and Targeting in Poverty Alleviation Programs," World Bank Economic Review, World Bank Group, vol. 8(2), pages 191-211, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    fiscal federalism; basic income guarantee; inequality;

    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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