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In 1994, about one in eight Canadians (12.2 per cent) were on social assistance, and welfare benefits reached levels comparable to what a full-time minimum wage job would pay. Partly in response to this growing crisis in dependency, governments across Canada reformed their welfare systems. Reforms varied by province ranging from tighter eligibility rules, work-related requirements (such as job searches), and reduced cash transfers.

These reforms helped dramatically reduce the share of the population on welfare, which fell by almost half from 12.2 per cent in 1994 to 6.3 per cent in 2012. The U.S., with a similar set of reforms, also experienced a marked decline in dependency. If income were to be unconditionally provided, as prescribed by many basic income models, irrespective of working or even searching for work, we shouldn’t be surprised if, once again, fewer Canadians end up in the work force.

Finally, claims about an unconditional basic income “solving” poverty oversimplify what’s often a much more complex problem. First, it’s important to recognize the differences between transitory poverty, which almost all Canadians experience at one time or another (for instance, when they’re in university or college), versus long-lasting or permanent poverty, which is much more worrying.

The root causes of long-lasting poverty go beyond a simple lack of income. Issues such as addiction to drugs or alcohol, mental health challenges, severe physical disabilities, and not completing high school increase the risk of chronic poverty. Crucially, a cash transfer with no restrictions may either exacerbate the problem or not address why someone is stuck in poverty in the first place.

Proponents from across the political spectrum promote the idea of an unconditional basic income. But clearly, the drawbacks are significant and should give us all pause.

Charles Lammam is director of fiscal studies and Hugh MacIntyre is a senior policy analyst at the Fraser Institute. They are co-authors of the study “The Practical Challenges of Creating a Guaranteed Annual Income in Canada”