Basic Income Explained

What is basic income?

A basic income is an unconditional cash transfer from government to individuals to enable everyone to meet their basic needs, participate in society and live with dignity, regardless of work status. 

It is a simple, common-sense alternative to an income security system that is full of gaps and problems, privilege for some and disadvantage for others. In our fast-paced, precarious world  we all face financial risk at times. As individuals—and as a society and economy—we need better options to weather setbacks, stay well, manage transitions and create opportunity. 

How does it work?

There are two major models.

  1. A universal model, which provides the same benefit amount to every individual regardless of their other income. Often in this model, for those who don’t need the basic income because they have higher sources of income, this additional income is taxed back to make up for the payment. 
  2. A guarantee model, which takes other income into account at the outset, providing an income ‘guarantee’ as it is needed. In this model, when your income is very low you get the greatest amount and as your other income grows, the amount reduces gradually. Those who have sufficient income from other sources don’t get a payment.

Both models can work and be fair if designed effectively. The guarantee model is most familiar to Canadians, because income security for seniors and family with children under 18 has been structured this way for decades.  Basic income pilot projects for other age groups (like the Ontario pilot) have also been structured this way. That may make it more feasible here.

What matters most is that any design and funding options are guided by principles to make sure they provide security, dignity and autonomy, reduce poverty and inequality, and work in synergy with public services.

For more information, read Basic Income: Some Policy Options for Canada.

How can a basic income make a difference?

Canadians need a long-term national strategy that provides a basic income to all individuals. Multiple pilot programs across Canada and around the world have been monumentally successful in proving that basic income works. 

Basic income won’t fix everything; no one is claiming it will. But evidence from around the world has shown a pattern of positive benefits for individuals and families including:

  • Eating better
  • Improved health and access to education
  • Greater options for paid work as employees or entrepreneurs
  • More time and money to devote to family care, community work and creative pursuits

For communities and society as a whole, positive benefits include:

  • Decreased violence
  • Increased empowerment for women and other disadvantaged communities
  • Boost to local economies and small businesses, which benefits overall larger economy

Read stories of how basic income has changed lives here.

Find in-depth resources here.