Implementing a Basic Income Guarantee in Canada: Prospects and Problems
Robin Boadway, Queen's University and Kourtney Koebel, University of Toronto, November 14, 2018
Read more | Get paper (PDF) | Get presentation (PDF)

Abstract:
We outline the case for a basic income guarantee and characterize the alternative forms it could take. We argue that implementing such a program in the Canadian federation should involve collaboration between federal and provincial governments, ...with each level having some discretion over the size of the guarantee within their jurisdictions. We draw on tax harmonization arrangements in Canada for guidance about how such collaboration could be managed. We propose a basic income guarantee model for Canada that is sufficient to move all persons out of poverty, that is implemented through the tax system, and that is affordable. Our proposal is virtually self-financing in the sense that it redistributes existing federal and provincial transfers and does not require any tax increases. We illustrate our basic income guarantee program using simulations based on Statistics Canada’s SPSD model

PROMOTING TAX FAIRNESS IN NEWFOUNDLAND AND LABRADOR THROUGH THE PERSONAL INCOME TAX SYSTEM 
Wade Locke, Doug May, Noel Roy, Michael Sullivan and Craig Wiseman, June 2015
Read more | Get paper (PDF) | Get presentation (PDF)

Executive Summary:
...This paper, utilizing various technical indices, analyzed both progressivity and fairness for the Newfoundland and Labrador personal income tax system. In particular, tax fairness was evaluated in terms of both horizontal and vertical equity. The conclusion from this analysis is that both taxes and transfers have made the Newfoundland and Labrador system more progressive. In terms of reducing income inequality associated with market incomes, government, transfers seemed to play a greater role than taxes. The analysis presented in this report demonstrated that the incidence of low income has diminished over time, but it still exists for many individuals and families. Consequently, it remains a concern. Moreover, ...the number of individuals and families who could be classified as being in the “poorest of the poor” group seems to have been relatively constant. In other words, members of this group seem not to have benefitted from the improved prosperity to the same extent as other family units within Newfoundland and Labrador.

A basic premise of this research is that it is important for Newfoundland and Labrador to remain competitive with other provinces and not to produce major behavioural disincentives that might be manifested in terms of tax evasion, lower productivity, or out-migration to another jurisdiction in response to higher Newfoundland and Labrador taxes. Additionally, it is an operating assumption of or a value judgement implicit in this research that if funds are to be redistributed using the income tax system, then these funds should transferred to or targeted at low income households that are most in need. Individuals and families in this low income category, as demonstrated in the research presented in this report, could be identified through the use of the Market Basket Measure of low income for each community within Newfoundland and Labrador.

To meet the primary objective of this paper, five illustrative policy options were developed that would, if implemented, decrease income inequality through the provincial tax/transfer system.
Five scenarios, which involved approximately the same amount of funds to be redistributed beyond the existing base case, were considered.

If you any questions, please contact Wade Locke, Department of Economics, Memorial University, 864-8104, wlocke@mun.ca