A basic income can be a strong investment in mental health

Over half of Canadians feel “financially paralyzed” by the cost-of-living crisis, according to a recent poll. As life becomes more unaffordable for more people, we need governments to create policies that will improve public health and well-being.

One such policy is a basic income guarantee: an unconditional cash transfer from government to ensure people can meet their basic needs and live with dignity.

A basic income guarantee differs from the universal basic income (UBI) model often discussed. While a UBI is set at the same amount and made available to everyone, a basic income guarantee is targeted to those need it, through a benefit that rises as income declines.

Our recently published research looks into one basic income program, the Ontario Basic Income Pilot that was launched in 2017 but abruptly ended the following year. We conducted a study to understand how Ontario’s pilot impacted the lives of those who participated in it.

We interviewed 46 participants across four cities included in the pilot. We asked about their experiences before the pilot, during their participation in it and after its abrupt end.

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Ontario’s basic income pilot

In 2017, the Ontario government, under then-premier Kathleen Wynne, launched the Ontario Basic Income Pilot to test the efficacy of an unconditional cash transfer. A total of 4,000 people were enrolled, and the pilot was slated to run in Hamilton, Lindsay, Brantford and Thunder Bay over a three-year period.

Set at 75 per cent of the low-income measure (one of Statistics Canada’s three poverty lines), the pilot provided $1,415 monthly for single people and an additional $500 for people with disabilities (up to $1,915 monthly), with every dollar earned subject to a 50 per cent claw-back.

Despite a campaign promise to complete the pilot, incoming premier Doug Ford abandoned it in 2018. Participants weren’t forewarned but learned of its cancellation like everyone else — on the news or through social media.

The government claimed the pilot did not help people become “independent contributors to the economy.” The lack of evidence to justify this claim, along with other government statements, suggests the pilot’s premature cancellation was an ideological decision.

Dave Cherkewski, who participated in Ontario’s basic income pilot, at the Central Library in Hamilton in November 2017. Cherkewski said the money he received eased the stress of daily life and mental illness that has kept him out of work.
(AP Photo/Rob Gillies)

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Impact on participants’ mental health

The pilot’s guiding principles, written by the late-Senator Hugh Segal, affirmed that “no individual will be made worse off during or after the pilot, as a result of participation in the pilot.” Our study, however, indicates that the mental health of many participants was demonstrably worsened in the pilot’s demise.

With a three-year promise of stable income, participants told us of being able to plan better for their futures. Some pursued higher education, others found better paying and more stable jobs or started their own businesses. Some moved into better housing, leaving behind mold-infested or poorly maintained dwellings, only to plead with their landlords to break their new leases after the pilot was cancelled.

We found that increased income security improved participants’ mental health, reduced their stress and allowed them to improve diets with healthier food options. Some spoke of no longer having to rely on food charity as they could go the grocery store like everyone else.

Interviewees described what life is like in poverty: not being able to go out for a cup of coffee with friends or buy gifts for your children on their birthdays, not being able to entertain family over the holidays or go out and socialize.

Some had not disclosed their financial situation to family or friends because their sense of shame was so profound. Yet, feeling unable to discuss their situation essentially cut them off from valuable sources of social support.

Jodi Dean helps her daughter Madison, who uses a wheelchair, leave home for a doctor’s visit in Hamilton, Ont. in November 2017. Dean said the extra money gave her family ‘the breathing room to not have to stress to put food on the table.’
(AP Photo/Rob Gillies)

Structural violence

Ontario’s premature cancellation of the pilot was an act of structural violence — a policy decision that caused needless and avoidable harm and suffering. Anthropologist Nancy Scheper-Hughes explains that structural violence refers to “the invisible social machinery of inequality that reproduces social relations of exclusion and marginalization.”

Structural violence upholds the poverty, racism, sexism and other social inequities that lead to higher rates of illness, suffering and premature death. It is often invisible and can result from policy omissions, but the termination of the pilot was a public, deliberate decision.

By throwing participants’ lives and carefully laid plans into chaos, and thrusting them back into poverty, our research shows the Ontario government’s policy decision caused significant harm.

Our research is consistent with a larger body of evidence demonstrating that unconditional cash transfer programs, like basic income, can improve mental well-being. As young people are more vulnerable to the mental stress resulting from financial insecurity, these programs provide the necessary protection to mitigate the lifelong damaging impacts of childhood poverty.

We also know that welfare systems are associated with poor health outcomes and increase recipients’ psychological distress. These haven’t been subject to the rigorous experimentation that a basic income has, yet they persist, despite the voluminous research documenting their harms.

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The cost of mental illness in Canada already amounts to over $50 billion annually (in direct health-care costs and lost productivity) but without intervention could increase to $291 billion by 2041.

Research shows how poor mental health is a direct consequence of poverty. Money not only helps meet people’s material needs but also alleviates their worries. Reducing poverty translates into significant savings for the economy and the public purse. Canada could save $4 to $10 for every dollar spent on mental health supports.

Parliamentary Budget Officer Yves Giroux on Parliament Hill, Nov. 18, 2024. Implementing a guaranteed basic income at the federal level could reduce poverty rates in Canada by up to 40 per cent, according to the government’s fiscal watchdog.
THE CANADIAN PRESS/Adrian Wyld

Eradicating poverty

Poverty is not caused by personal failings. It is the social environment people live in that has the greatest impact on life trajectories.

To eradicate poverty, we need policies that address the root of financial hardship. A basic income does just that. The Parliamentary Budget Officer of Canada recently released estimates that show a basic income, using parameters similar to the Ontario pilot’s, could cut poverty by up to 40 per cent. This is an affordable option with the potential for broad positive effects.

We already have the Canada Child Benefit for families and the Guaranteed Income Supplement for older adults that provide forms of a basic income guarantee, although these benefits must be enlarged to be truly adequate. What we need now is a program that provides a robust income floor beneath which no one can fall.

As citizens, we have few ways to hold leaders accountable for acts of structural violence, like cancelling the pilot. A class-action lawsuit lodged against the Ontario government for breach of contract is ongoing; it remains to be seen whether this will prove successful.

Whatever their ideological leanings, politicians have a duty to advance policies that bolster public health and well-being. Improving mental health through a basic income is a wise investment, one that will prevent the needless suffering of generations to come.