You are here

What is Basic Income

“Basic income” is defined by the Basic Income Earth Network ( as “an income unconditionally granted to all on an individual basis, without means test or work requirement.”

Basic income is also known as Guaranteed Annual Income (commonly denoted by the acronym GAI), Guaranteed Adequate Income, Guaranteed Livable Income, Basic Income Grant/Guarantee, Citizen’s Income, Social/Natural Resources Dividend, or Refundable Family Tax Credit.

The goal of universal income security could be provided in principle through a single basic or guaranteed income benefit. However, such a benefit could also work in concert with existing or modified government programs such as seniors’ pensions, unemployment insurance, child benefits, and financial support to students.

Most of these plans follow one of two basic models, the Negative Income Tax or the Universal Demogrant. The Negative Income Tax model consists of a payment administered through the tax system to those below a set level of income. As additional income rises, part of the benefit is clawed back. The Universal Demogrant is a non-taxable payment made to every person, regardless of income.

Basic, or guaranteed, income is not a new idea in Canada. In 1971, the Special Senate Committee on Poverty chaired by Sen. David Croll recommended the adoption of a guaranteed annual income for all Canadians. From 1974-1979, a guaranteed income experiment took place in Manitoba, funded by the federal government. In 1985, the Macdonald Commission (which also recommended free trade with the United States) recommended a guaranteed income, the Universal Income Support Program.

Two current Canadian social programs approach guaranteed income in principle. Old Age Security is a guaranteed monthly benefit available to all Canadians over 65, with no consideration for work history or retirement, paid by the federal government. It is taxable, so that higher income recipients pay the benefit back through their taxes. This is similar to the Universal Demogrant model. The Guaranteed Income Supplement is a federal benefit paid to recipients of OAS with little or no other income. The benefit is non-taxable, but eligibility is based on income, and benefits can be reduced for additional income. This is similar to a Negative Income Tax model.

The Canada Child Tax Benefit is also like a guaranteed income for children. Nontaxable monthly benefits are paid to parents of children under 18 to help with the costs of raising children. Benefits are rated according to the number of children and the household income.

The demographic that does not currently have an income security program like those for seniors and children is working age adults. A guaranteed income for working age adults, or a universal basic income that includes all Canadians, could help to ensure that all Canadians have sufficient income to meet their basic needs and live with dignity.

For more information about basic or guaranteed income, check out the backgrounder: “Income Security for All Canadians: Understanding Guaranteed Income.”