poverty rates up to 40%: PBO.

The government’s fiscal watchdog says a guaranteed basic income program at the federal level could cut poverty rates in Canada by up to 40%.

In a new report, the parliamentary budget officer says that a Canadian family in the lowest earning group could expect to receive an average of $6,100 in annual disposable income through such a program.

Higher earners could see their income levels drop because of changes in the tax system to implement the basic income support.

The report says introducing a federal basic income program would cost up to $107 billion in 2025.

The PBO also assumes that other social supports would be cut to implement the basic income, resulting in a net cost to the federal government of between $3.6 billion and $5 billion, depending on the exact model and family definition.

Under that definition, the cost of administering the program would be cut by more than half to $53 billion in 2025, before taking into account any changes to the tax system or to social supports.

The impact on poverty rates also would be greater, with a 40% reduction for the economic family definition, compared to 34% under the nuclear family model.

Source: INVESTMENTEXECUTIVE