Newfoundland Introduces Basic Income Program for Seniors

Newfoundland and Labrador Premier Andrew Furey, shown at a press conference in the Confederation Building in St. John's on Feb. 22, 2023, has announced a poverty reduction plan to help children, seniors and low-income workers. (The Canadian Press/Paul Daly)

Newfoundland and Labrador is introducing a basic income program for residents aged 60 to 64 as part of its new Poverty Reduction Plan, which will also increase the province’s Child Benefit program by 300 percent.

“The new three-year phased plan is an important element of achieving the province’s goal of becoming one of Canada’s healthiest provinces by 2031,” the provincial government said on Nov. 8 in announcing the plan.

The province says the plan is supported by an investment that will grow to $85 million annually after three years.

“This is in addition to more than $900 million the Provincial Government allocated in Budget 2023 for social programming and support for lower income families and individuals,” the province says.

The new plan is also increasing the provincial Child Benefit program by 300 percent, while expanding the Prenatal-Infant Nutritional Supplement program up to age five and providing more funding for school lunch programs.

As part of the expansion, the annual Child Benefit payments will jump from $921 for families with two children under the age of 18 to $3,684.  For families with four children, the benefit will go from $1976.88 to $7,907.52 per year.

Basic Income

The basic income initiative was tested in some areas in Ontario starting in 2016 as a pilot project by the Liberal provincial government at the time. However, the Progressive Conservative government said it will wind down the project after coming to power in 2018.

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“The research project had an extraordinary cost for Ontario taxpayers which, according to the Ministry of Finance, would require increasing the HST from 13 percent to 20 percent if implemented across the province,” the Ontario Government said at the time.

There is currently an NDP private member’s bill and a Senate bill that propose a “guaranteed livable basic income” scheme in Canada.

Parliamentary Budget Officer Yves Giroux told a Senate hearing on Oct. 17 that implementing the scheme would mean that about 40 percent of the population would gain, while 60 percent would lose.

“Obviously, if you want to create a program of this scale at zero cost, you need losers. Yet the losers would mostly be found in the top 60% of income earners, which I believe includes a good portion of the middle class,” he said.

Sen. Kim Pate, who has sponsored the Senate bill, says the scheme is needed to fight poverty in the country.

“Poverty is not inevitable, nor is it an individual failing. It is the result of government policy choices that fail to provide viable pathways out of poverty that abandon and leave people behind,” Ms. Pate, an Independent senator who was nominated for appointment by Prime Minister Justin Trudeau, said in the Senate on Feb. 8, 2022.

“Bill S-233 would respond by implementing a framework to make a guaranteed livable basic income a reality.”

Responding to the bill, Conservative Sen. Michael MacDonald cited research that showed the scheme “would have a negative effect on labour participation within Canada.”

“Common sense dictates that giving people large, unconditional cash payments is bound to make work less attractive and rewarding, not least because now recipients are only working for the difference between their basic income entitlement and wages,” Mr. MacDonald said on April 18, 2023.

“We all recognize that poverty needs to be addressed. For now, let’s focus on targeted and pragmatic solutions instead, ones that promote and provide training, education, and community-based programming.”