Ontario’s long-awaited basic income pilot project will include 4,000 low-income people in the Hamilton area, Thunder Bay and Lindsay, who will each receive up to $17,000 annually with no strings attached, starting as early as this summer.

Premier Kathleen Wynne announced the three-year experiment in Hamilton on Monday as part of a major speech on how the Liberal government plans to ensure all Ontarians, including those struggling in low-wage, precarious work, benefit from the province’s balanced budget and improved economy.

“It’s not an extravagant sum by any means. For a single person, we are talking about just under $17,000 a year, but even that amount may make a real difference to someone who is striving to reach for a better life,” she said.

“The project will explore the effectiveness of providing a basic income to people who are currently living on low incomes, whether they are working or not,” she said. “People participating in our pilot communities will receive a minimum amount of income each year — a basic income, no matter what.”

Under the plan, single adults between the ages of 18 and 64 will receive up to $16,989 annually and couples will receive up to $24,027. People with disabilities will receive an additional $6,000.

Single people would have to earn less than about $34,000 to qualify and the income cut-off for couples would be about $48,000, according to a government spokeswoman.

First announced in the 2016 budget, the pilot is expected to cost $50 million a year and help the government determine whether a streamlined approach to delivering income support improves health, education and housing outcomes for vulnerable workers and those on social assistance. The pilot also wants to see if providing an income floor below which nobody can fall improves job prospects for those living on low incomes.

A similar experiment in Manitoba in the 1970s showed a drop in hospital use, particularly for mental health problems, as well as increased high school completion in the test community of Dauphin.

“We want to find out whether a basic income makes a positive difference in people’s lives . . . and whether it is an approach that deserves to be adopted across our province as a whole,” Wynne added.

During questioning by community members at Hamilton’s historic LiUNA Station, Wynne said there would be regular updates on the pilot and that Ontarians would know how the government plans to proceed by the end of the experiment.

Since about 70 per cent of low-income Ontarians are working, the government expects a similar proportion of participants will be employed or self-employed, said Social Services Minister Helena Jaczek who is leading the project with Housing Minister Chris Ballard.

The basic income amount represents 75 per cent of the province’s low-income measure, or poverty line, of about $22,653 for a single person in 2016. (The low-income measure is equal to half the median income in the province, adjusted for family size.)

Participants will be able to increase their total income through work, while their basic income payment decreases by 50 cents with every dollar they earn.

For example, a single person earning $10,000 a year from a part-time job would receive an additional $11,989 in basic income ($16,989 minus $5,000) for a total income of $21,989, according to the government.

Opposition party leaders were generally supportive of the idea, but said they would be watching closely as the pilot project rolls out this spring and summer in Thunder Bay and the Hamilton area, including Brantford and Brant County. Lindsay will join the project in the fall.

A basic income pilot for First Nations is being developed in collaboration with community partners and will likely be announced later in the year.

Ontario Progressive Conservative Leader Patrick Brown said former Conservative senator Hugh Segal’s involvement as a government adviser on the plan gives him confidence “because he’s a sharp individual.”

The NDP has long backed the concept, Leader Andrea Horwath noted.

But she wondered why the government set the basic income amount below the poverty line.

“I’m very, very worried that the government puts a pilot project in place that doesn’t even meet the basic (needs) of people,” she told reporters Queen’s Park.

“How do you bring people out of poverty when you’re not even giving them a basic income that meets the poverty line,” she added.

Those on social assistance will be able to keep their drug cards and other benefits. But Employment Insurance and Canada Pension Plan payments will be deducted from the basic income dollar for dollar.

Participants in the pilot will be randomly chosen by mail in the test communities. Homeless people will be eligible if a shelter is chosen during the randomized selection process, officials said. Participation is voluntary and no one will be worse off.

About 1,000 households will be chosen in the Hamilton area and another 1,000 will be invited to participate in Thunder Bay. About 2,000 are expected to take part in Lindsay, where larger community impacts of the basic income will be studied. Participants must be living in one of the test locations for the past 12 months or longer to be eligible.

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Payments will begin in the Hamilton and Thunder Bay areas this summer, while participants in Lindsay will be recruited in the fall.

Basic income champions welcomed the premier’s announcement, especially the plan to allow participants on social assistance to keep their existing benefits.

“We are pleased to see that it is basic income-plus,” said Sheila Regehr of Basic Income Canada Network. “I’m pretty confident they have got a lot of the details worked out. We are very excited to see this getting started.”

Social Policy expert John Stapleton, a member of Jaczek’s income security reform working group, said he is anxious to see if a basic income is a better alternative to social assistance.

“We’re finally going to get information to see if this is the right thing to do to replace the welfare system as we know it in Ontario,” he said.

Advocates for those with mental health problems were pleased the pilot will measure health outcomes.

“There is a link between income and health,” said Camille Quenneville, of the Canadian Mental Health Association, Ontario division. “Those with lower incomes generally report poorer physical and mental health than those in the higher income.”

Nearly half of all people receiving benefits from the Ontario Disability Support Program live with a mental illness, she added.

Anti-poverty activists said the government must ensure prospective participants currently living on social assistance fully understand the trade-offs involved in exchanging their welfare cheque for a basic income.

“For the small number of people on social assistance who will be selected, the additional income and the elimination of the punitive and regressive rules will be a welcome change,” said Jennefer Laidley of the Income Security Advocacy Centre, a legal clinic that advocates for people on social assistance.

“But each person will have to be well informed about the possibility of losing access to other important benefits they might currently receive,” she said, adding every person’s situation will be different.

The most pressing issue, besides reforming the entire system, Laidley said, is that everyone on social assistance needs a significant increase in their benefits now.

“The basic income pilot cannot be a reason for government to delay making immediate investments to improve the lives of people they know are living on meagre, sub-poverty incomes.” she said. “I’m hoping we’ll see that kind of investment in the budget on Thursday.”

Ontario is among several areas in the world experimenting with the idea of a minimum or basic income, including Finland, which began a two-year pilot in January. Kenya, the Netherlands and Scotland are also considering a test.

With files Kristin Rushowy

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