Proposing a Guaranteed Basic Income for PEI

This report outlines a proposal for a guaranteed basic income (GBI) for Prince Edward Island (PEI) residents aged 18 to 64. While supporting the objectives of Canada’s First Poverty Reduction Strategy, we estimate that this proposed GBI would reduce the poverty rate for Islanders aged 18 to 64 from almost 10% to nearly 2%, and ensure that no Islander lives in deep poverty (i.e., with income below 75% of the official poverty line). 

As recommended by the Special Committee on Poverty in PEI, we propose a maximum benefit of 85% of the official poverty line - estimated to be $19,252 for a single adult and $27,227 for a family of two adults in 2022 - with a benefit reduction rate of $0.50 for every dollar increase in family’s net income. This new GBI benefit would complement similar income-tested basic income benefits that already exist for children (the Canada Child Benefit) and seniors (the Old Age Security and Guaranteed Income Supplement).

Basic income proposals are often criticized for being expensive and, therefore, hard to implement without significant tax increases for the middle class. We address this issue by using a broader definition of the family (i.e., the census family) to administer the proposed benefit—a novel approach that previous GBI proposals have not taken advantage of. This both ensures a greater share of benefits goes to Islanders living in poverty and reduces program costs by almost 40% relative to a GBI where an adult child living with their parents is considered a separate family. When combined with federal funding, likely reductions in provincial and federal expenditures on income-tested benefits, and reductions over time in the costs of poverty for governments, this GBI proposal can be fully financed while ensuring that most PEI taxpayers are better off.

About the Project

This project represents over two years of collaboration between economists, public servants, politicians, and advocates from Prince Edward Island and across the country. In October of 2021, Coalition Canada: basic income - revenu de base began to convene a working group with the goal of designing a feasible and progressive guaranteed basic income (GBI) program for Prince Edward Island. The report presented here is the outcome of this working group's efforts, and seeks to respond to the Special Committee on Poverty in PEI's recommendation for a GBI demonstration project in PEI. As much as possible, the group adhered to the guiding principles for a GBI in PEI proposed by the Special Committee, including that any demonstration or permanent project in PEI be pursued in partnership with the federal government. Over the course of many months, team members met on a regular basis as an entire team and within smaller groups to establish additional guiding values, exchange information, share updates, and clarify assumptions.

The final report emerging from this process brings together a rich array of expertise and perspectives. It illustrates that a basic income demonstration project in Prince Edward Island would not only have significant and positive implications for poverty reduction within the province, but is financially feasible as well. The working group’s hope for the proposal is that it serve as a useful resource in future conversations about poverty reduction, in Prince Edward Island and across Canada.

  • The Honourable Wayne Easter

    Member of the House of Commons, 1993-2021

    “Basic income is a concept that has been discussed for decades to improve Canada’s social system. This extensive report lays out a blueprint on how a basic income guarantee could work and bring better social and economic results to our society. Following on the motion passed by the Prince Edward Island Legislature, now is the time for the federal government and province to implement a long term demonstration project to evaluate and determine its benefits in real time.”

  • Bruce Stanton

    Member of the House of Commons, 2006 – 2021

    “PEI’s mixed economy, size, and social cohesion make it the ideal place in Canada to have a demonstration project. The people of PEI value finding new and better ways to deliver effective, affordable services. It is why all parties endorsed the PEI Special Committee’s recommendation for a basic income project. We know investments in people and communities ​more than pay for themselves over time”

  • Jean Crowder

    Member of the House of Commons, 2004-2015

    “This report presents a sensible, practical framework to determine the effectiveness of GBI with the goal of alleviating poverty. People deserve to have a life free from food insecurity, unsafe housing and all the other stressors that arise from living in poverty. Hopefully this report will be the catalyst that brings the federal and provincial governments together to work towards ending poverty in PEI and then Canada.”

  • Professor Michael Smart

    Department of Economics, University of Toronto

    “A Basic Income program has long attracted the interest of policy-makers, academics, and the general public in Canada. This is a detailed, practical proposal for how a Basic Income could work for all of us. As the report shows, the GBI Benefit for PEI would reduce poverty dramatically, and it could be implemented in a fiscally responsible way. I hope that policy-makers and all Canadians will take a close look at the proposed GBI Benefit for PEI.”

  • Professor Kristen Lowitt

    Assistant Professor, School of Environmental Sciences, Queen's University

    “A basic income overlaps with many of the issues facing coastal and inland fisheries communities in Canada. A basic income may help stabilize the seasonal nature of work in fisheries while also increasing workers’ control over their employment choices and conditions. This could in turn contribute to broader benefits for ensuring sustainable fish and seafood harvesting as part of local food systems.”

  • Yv Bonnier Viger, MD, MSc, MM, FRCPC

    Regional public health director for Gaspésie-Îles-de-la-Madeleine, and Professor in the Department of Medicine at Université Laval

    “We welcome Prince Edward Island’s concerted resolution to establish a guaranteed basic income program on its territory. The economic determinant of health and well-being has a major impact on people’s physical and mental health and life expectancy. As is clearly stated in the report, society benefits from a reduction in its health care and social services costs. It is true that it is not easy to find a formula that can get everyone’s support. The only way to really do that is to put initiatives in place and evaluate them as long as possible. The introduction of a guaranteed basic income benefits program for Prince Edward Island is certainly a step in the right direction to improve the health and well-being of its entire population!”

  • Charles Z. Levkoe

    Canada Research Chair in Equitable and Sustainable Food Systems Director, Sustainable Food Systems Lab

    “Poverty and inequity is rampant in the food system, and especially among those we most depend on to feed our communities. A basic income has a real potential to play a role in contributing to farmer and farm worker livelihoods, rural economies and building more resilient food systems. The Proposal for a Guaranteed Basic Income Benefit in PEI is an impressive description of a path towards realizing the social and economic possibilities of this approach for the province, the agricultural sector and for Canada."

  • Rachel Blais

    Executive Director, Qajuqturvik Community Food Centre (Iqaluit, Nunavut)

    "Qajuqturvik Community Food Centre is pleased to endorse the release of the PEI report, advocating for the development of a basic income in the province. We believe that Nunavummiut stand to benefit from PEI's leadership in fostering crucial discussions between the Federal government and its Provincial and Territorial partners. Such dialogue is vital for shaping a robust basic income program that prioritizes the health, dignity, and autonomy of all communities, including those in the North."

  • Dr. Alexander (Sandy) Simpson

    Chair in Forensic Psychiatry, CAMH and University of Toronto

    “This is a hugely important planning document for PEI, but also a very clear marker for progress in poverty reduction nationally. By showing that GBI is feasible and affordable, it will if enacted allow PEI to reap the benefits that GBI brings, including poverty reduction, enhanced food and housing security, improved personal and family wellbeing and improved mental health. This work is a vital blueprint for PEI, and the other provinces and territories to follow so as to advance a comprehensive poverty reduction strategy for Canada.”

  • Jeff Karabanow, Ph.D, RSW

    Professor and Associate Director, School of Social Work, Dalhousie University

    “Providing a basic income is an important and meaningful safety net for those experiencing poverty. In addition, it can be instrumental, along with increases in community/public/affordable housing stock, a humane, dignified and significant response to the homelessness crisis.”

  • Waye Mason, MBA

    Councillor, Nikanus Wunaqapemk; Distric 7 Halifax South Downtown

    “A PEI wide program will give all Canadians clear and definitive examples of how basic income alleviates the serious and damaging impacts of poverty and its downstream effect on municipalities.”

  • Anthony N. Doob, C.M., FRSC, Ph.D.

    Professor Emeritus of Criminology, University of Toronto; Centre for Criminology & Sociolegal Studies

    "In 2019 (the last year for which we have data before the disruptive impact of Covid), approximately 75 thousand people were released from prisons in Canada after serving sentences (including 699 from Prince Edward Island’s own prisons). Many need immediate support while they attempt to reintegrate into Canadian society. It is obviously in everyone’s interest to ensure that the process of providing financial support is straightforward and with a minimum of barriers. Guaranteed Basic Income appears to be a sensible way of attempting to allow reintegration as quickly and effectively as possible. And by studying it carefully in a province-wide study, we can assess its effectiveness overall, and its ability to fill important gaps in our current income support programs and with certain special groups like prisoners."

  • Valerie Tarasuk, PhD

    Professor Emerita, Department of Nutritional Sciences and Temerty Faculty of Medicine, University of Toronto

    "Ensuring that all Islanders have enough money to meet basic needs is the only way to tackle the very serious problems of food insecurity that for way too long have plagued individuals and families. The GBI proposed here would set a critical foundation for food security in PEI."