Canada is launching an experiment that will give 4,000 people free money until 2020

Two regions of city to begin social experiment, with third joining in autumn

Chris Weller
Tuesday 25 April 2017 16:16
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Canadian Prime Minister Justin Trudeau
Canadian Prime Minister Justin Trudeau

Finland, the Netherlands, and San Francisco, California, have already shown interest in giving people a regular monthly allowance — a system known as basic income.

Now Ontario, Canada, is planning a basic-income trial as well.

On Monday, Premier Kathleen Wynne outlined new details of the Ontario Basic Income Pilot, which is expected to begin later this spring and last for three years.

A total of 4,000 people in three regions in the province will begin receiving additional income based on their current salary.

A person in the trial can receive up to $16,989 a year, though the equivalent of 50% of any additional earned income will be subtracted from that figure. So a person who makes $10,000 a year at their job, for example, would receive $11,989 in basic income, for a total income of $21,989.

Eligible recipients, who must be between 18 and 64 and considered low-income, will be chosen through a randomized selection process.

Wynne says one goal of the pilot is to reassure people that their government supports them.

“It says to them government is with you,” she said. “Ontario is with you.”

The premise of basic income is straightforward: People get monthly checks to cover living expenses such as food, transportation, clothing, and utilities — no questions asked.

Along with Canada, several countries are conducting basic-income trials.

Finland's government launched its pilot on January 1 and is giving 2,000 unemployed Finns $590 a month. In various cities throughout the Netherlands, 250 people will soon receive an extra $1,100 a month for two years. And in Kenya, the charity GiveDirectly has launched a trial version of a 12-year study that seeks to gather the first longitudinal data on basic income.

The concept of basic income has been around since the 1960s. Since then, various researchers and government officials have given basic-income experiments a try, with mixed results.

In general, however, the data seems to tilt in basic income's favour.

A study published in late 2016 found that people who received unconditional cash transfers used drugs and alcohol less frequently than people who didn't receive the money. And though it's easy to assume free money would make people lazy, research suggests the opposite is true. People in one 2013 study worked on average 17% longer and received 38% higher earnings when they got a basic income.

Skeptics, meanwhile, say that because many basic-income trials have been conducted in small villages in the developing world, the findings won't necessarily translate to developed countries.

Ontario's trial will begin in the regions of Hamilton, including Brantford and the County of Brant, and in Thunder Bay and the surrounding area. The third pilot will launch in Lindsay in the fall.

“Everyone should benefit from Ontario's economic growth,” Wynne said in a statement. “A basic income will support people in our province who are reaching for a better life.”

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Read the original article on Business Insider UK. © 2016. Follow Business Insider UK on Twitter.

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