Costing a National Guaranteed Basic Income Using the Ontario Basic Income Model NABIG, Hamilton Mai 26, 2018 Introduce Trevor, Duncan, Erin and Jason Take you through a case study that provides an example of the work done by the PBO (distinct role in the system). Support financial decision-making by parliamentarians. Done through pulling together different strands of data from within government. And pulling together data from other jurisdictions. Nasreddine Ammar 1

Presentation Outline Motivation Background: Ontario’s Basic Income Pilot Project Methodology Cost of a Guaranteed Basic Income Actual Federal Support for Low-Income People vs. GBI Conclusion and discussion

costing of new proposals (e.g., Basic income) Motivation Functions of the PBO Approving (Ex ante analysis) Economic and Fiscal Projection Long-term Sustainability Independent Costings costing of new proposals (e.g., Basic income) budget sufficiency for measures Monitoring

GBI costing: a parliamentarian’s request Uniform strategy to reduce poverty Complex administrative process (High administrative cost)? Sufficient expenditures? Not all supports target the low-income people. Existing programs Categorizing existing federal programs and tax expenditures for low-income people: Office of the Parliamentary Budget Officer. (2017). Federal Support for Low-Income Individuals and Families. Retrieved from http://www.pbo-dpb.gc.ca/en/blog/news/Fed_Support_Low_Income GBI costing Using the Ontario’s basic income model: https://www.ontario.ca/page/ontario-basic-income-pilot

Background: Ontario’s Basic Income Pilot Project Participants must be 18 to 64 years old for the duration of the pilot. People with a disability will also receive up to $500 per month on top. GBI does not replace OAS and GIS for the elderly. GBI does not replace child benefits. This table will be updated by including the data that will be provided by INAC. Sources: PBO calculations based on the Ontario pilot project parameters.

Methodology PBO uses Statistics Canada’s SPSD/M, which is a statistically representative database of Canadian individuals in their family context. the nuclear family (spouses or lone parents plus never-married children aged younger than 18 years) is the family unit recognized by Canada Revenue Agency for filing income taxes; the net income is used as an approximation of the earned income defined by the Ontario GBI model. Limits of SPSD/M (version 26.0): SPSD/M data do not include the territories, persons residing on reservations, or armed forces personnel residing in barracks (+); The SPSD/M model is a static accounting model (+/-); The number of individuals with a disability can be underestimated (+). Limits of the estimated model: the difference in the poverty line between provinces was not considered.

Cost of a Guaranteed Basic Income   2018-19 2019-20 2020-21 2021-22 2022-23 Basic cost of GBI ($ millions) 72,822 73,496 74,172 75,039 75,992 Number of potential recipients (000) 7,730 7,657 7,587 7,528 7,473 Basic cost per capita ($) 9,421 9,598 9,776 9,968 10,169 Supplement cost for disability ($ millions) 3,194 3,265 3,336 3,405 3,471 Total GBI cost ($ millions) 76,017 76,761 77,508 78,444 79,463 Source: PBO calculations, using SPSD/M model.

Actual Federal Support for Low-Income People vs. GBI The federal support for low-income individuals and families and other vulnerable groups is estimated at $56.8 billion is in 2017-2018. This includes OAS and GIS for elderly, CCB for children, and federal support for indigenous people: $24.8 billion. $44 billion (58%) $32 billion (42%) Source: Office of the Parliamentary Budget Officer. (2017). Federal Support for Low Income Individuals and Families. Retrieved from http://www.pbo-dpb.gc.ca/en/blog/news/Fed_Support_Low_Income

Conclusion and discussion We estimate a gross costing of the GBI. PBO estimates represent pre-behavioral (static) costs. GBI is a combined federal-provincial basic income system that could be managed by an intergovernmental fiscal arrangement. GBI could replace some federal and provincial transfers, such as the GST credit the WITB, the social assistance.

THANK YOU! Contact Information: Nasreddine Ammar Economic analyst Nasreddine.Ammar@parl.gc.ca 10