Office of the Parliamentary Budget Officer
Additional Analysis

Update: Five-Year Cost Estimate of the Guaranteed Basic Income

Published on November 5, 2020

On July 7, 2020, the Parliamentary Budget Officer (PBO) reported on costs arising from the implementation of a guaranteed income program for the last six months of 2020-21.  The program parameters were based on Ontario’s basic income pilot project. [i] PBO presented three estimates based on scenarios that phase out the benefit by $0.50, $0.25 and $0.15 for each dollar of employment income. Additionally, participants receiving Employment Insurance or Canada Pension Plan payments would have their basic income reduced dollar for dollar.

At the request of a parliamentarian, PBO has extended this cost estimate over the next five fiscal years. The updated estimates include the new employment insurance temporary benefit enhancements. In addition, these estimates also consider the latest LFS data of August 2020 and the income level characteristics of the people laid off because of COVID-19. [ii]

As can be seen in Table 1, PBO estimates that the basic gross cost of the Guaranteed Basic Income (GBI) would range between $30.5 billion and $71.4 billion based on the three scenarios for the period from November 2020 to March 2021 (inclusive). The supplemental guaranteed income for disability would be $1.4 billion. The basic gross costs will grow each year to reach values between $84.2 billion and $197.2 billion per year in 2024-25. The cost of a guaranteed income for disability would be $3.8 billion in 2024-25.

A lower phase-out rate will result in more eligible individuals and therefore higher overall costs. As shown in Table 1, for a phase-out rate of 50% (1st scenario) more than 7.4 million people would benefit from the basic cost of GBI. The average benefit per person would be $4,099 in 2020-21. From 2021-22, the average benefit per recipient would be between $9,917 and $10,462.

For a phase-out rate of 15% (3rd scenario), the number of beneficiaries will increase to almost 20 million people with an average per capita benefit of $3,757 in 2020-21 rising to $9,887 in 2024-25.

Gross cost of a guaranteed basic income
Table 1-1
Canada2020-212021-222022-232023-242024-25
1st scenarioBasic cost of GBI ($ million)30,54478,48680,87182,42084,169
Number of recipients (000s)7,4527,9148,0718,0548,045
Average GBI ($)4,0999,91710,02010,23410,462
Supplemental disability cost ($ million)1,4483,5053,6153,7433,813
Total gross cost ($ million)31,99281,99184,48686,16387,983
2nd scenarioBasic cost of GBI ($ million)50,143127,953133,178135,958139,034
Number of recipients (000s)13,89314,43214,66014,66114,671
Average GBI ($)3,6098,8669,0849,2749,477
Supplemental disability cost ($ million)1,4483,5053,6153,7433,813
Total gross cost ($ million)51,591131,458136,793139,701142,847
3rd scenarioBasic cost of GBI ($ million)71,435180,812188,369192,573197,238
Number of recipients (000s)19,01219,60319,88619,91119,950
Average GBI ($)3,7579,2249,4729,6729,887
Supplemental disability cost ($ million)1,4483,5053,6153,7433,813
Total gross cost ($ million)72,883184,317191,984196,316201,052
Sources: PBO calculations using Statistics Canada’s Social Policy Simulation Database and Model (SPSD/M), Statistics Canada’s Labour Force Survey (LFS), and the PBO Economic and Fiscal Model.

The provincial distributions of the GBI for different scenarios are presented in Appendix A. Overall, among provinces, Ontario obtains the highest share of the GBI benefit, representing a range between 41% and 44% of the total across all three phaseout rate options for the five fiscal years.

With respect to the average value per recipient, Ontario has the highest average GBI benefit per recipient within the 2nd and 3rd scenarios and the 2nd highest value for the 1st scenario. This variability of the average value by recipient across provinces is explained by the distribution of employment earnings among low-income Canadians and the distribution of persons that are eligible for the new EI benefits.

Appendix A – Provincial breakdown of the guaranteed basic income cost

Gross cost of a guaranteed basic income with a phase-out rate of 50%
Table A-1
1st scenario2020-212021-222022-232023-242024-25
CanadaBasic cost of GBI ($ million)30,54478,48680,87182,42084,169
 Number of recipients (000)7,4527,9148,0718,0548,045
 Average GBI ($)4,0999,91710,02010,23410,462
 Supplemental disability cost ($ million)1,4483,5053,6153,7433,813
 Total gross cost ($ million)31,99281,99184,48686,16387,983
BCBasic cost of GBI ($ million)3,6819,7219,86910,03710,216
 Number of recipients (000)9139851,0151,0131,012
 Average GBI ($)4,0329,8729,7239,90710,094
 Supplemental disability cost ($ million)185448459473471
 Total gross cost ($ million)3,86610,16810,32910,51110,687
ABBasic cost of GBI ($ million)3,3098,5838,8499,1389,462
 Number of recipients (000)785843864873882
 Average GBI ($)4,21710,18010,24110,46410,730
 Supplemental disability cost ($ million)158385403423438
 Total gross cost ($ million)3,4688,9689,2529,5619,900
SKBasic cost of GBI ($ million)8132,0802,1612,2202,288
 Number of recipients (000)197207212213213
 Average GBI ($)4,12110,05710,21110,43710,719
 Supplemental disability cost ($ million)43104108113117
 Total gross cost ($ million)8562,1832,2692,3332,404
MBBasic cost of GBI ($ million)1,0362,6232,6872,7422,806
 Number of recipients (000)255266270270270
 Average GBI ($)4,0629,8489,94510,15510,398
 Supplemental disability cost ($ million)77188194202207
 Total gross cost ($ million)1,1142,8102,8812,9443,013
ONBasic cost of GBI ($ million)13,26734,33835,64436,41437,250
 Number of recipients (000)3,1333,3593,4403,4393,440
 Average GBI ($)4,23510,22310,36210,58910,830
 Supplemental disability cost ($ million)6251,5141,5641,6211,656
 Total gross cost ($ million)13,89235,85237,20838,03538,907
QCBasic cost of GBI ($ million)6,81917,01717,49017,68617,943
 Number of recipients (000)1,7511,8161,8311,8141,802
 Average GBI ($)3,8959,3719,5539,7529,956
 Supplemental disability cost ($ million)207499510525534
 Total gross cost ($ million)7,02617,51618,00018,21118,477
NBBasic cost of GBI ($ million)4661,1901,2031,2051,209
 Number of recipients (000)125130130129127
 Average GBI ($)3,7369,1279,2279,3709,524
 Supplemental disability cost ($ million)43103105108110
 Total gross cost ($ million)5081,2931,3091,3131,319
NSBasic cost of GBI ($ million)7221,8321,8701,8831,898
 Number of recipients (000)186195196194191
 Average GBI ($)3,8839,3739,5449,7299,932
 Supplemental disability cost ($ million)65157160164166
 Total gross cost ($ million)7871,9892,0302,0472,064
PEIBasic cost of GBI ($ million)96246252257263
 Number of recipients (000)2931313131
 Average GBI ($)3,2707,9908,0558,2448,451
 Supplemental disability cost ($ million)1229303132
 Total gross cost ($ million)108275282288295
NFLBasic cost of GBI ($ million)334857845839835
 Number of recipients (000)7882817977
 Average GBI ($)4,26610,41610,37610,59110,821
 Supplemental disability cost ($ million)3380808283
 Total gross cost ($ million)368937925921917
Sources: PBO calculations.
Gross cost of a guaranteed basic income with a phase-out rate of 25%
Table A-2
2nd scenario2020-212021-222022-232023-242024-25
CanadaBasic cost of GBI ($ million)50,143127,953133,178135,958139,034
 Number of recipients (000)13,89314,43214,66014,66114,671
 Average GBI ($)3,6098,8669,0849,2749,477
 Supplemental disability cost ($ million)1,4483,5053,6153,7433,813
 Total gross cost ($ million)51,591131,458136,793139,701142,847
BCBasic cost of GBI ($ million)6,43916,61217,30717,67918,073
 Number of recipients (000)1,8141,8931,9291,9331,937
 Average GBI ($)3,5498,7778,9739,1449,328
 Supplemental disability cost ($ million)185448459473471
 Total gross cost ($ million)6,62417,05917,76618,15218,544
ABBasic cost of GBI ($ million)5,41513,90714,58315,06615,600
 Number of recipients (000)1,5161,5841,6191,6361,655
 Average GBI ($)3,5718,7819,0069,2079,425
 Supplemental disability cost ($ million)158385403423438
 Total gross cost ($ million)5,57314,29314,98615,48916,038
SKBasic cost of GBI ($ million)1,3343,3793,5313,6283,740
 Number of recipients (000)378388396397399
 Average GBI ($)3,5308,6988,9229,1439,379
 Supplemental disability cost ($ million)43104108113117
 Total gross cost ($ million)1,3773,4833,6393,7413,857
MBBasic cost of GBI ($ million)1,7364,3734,5194,6184,732
 Number of recipients (000)494508515516518
 Average GBI ($)3,5138,6098,7718,9499,143
 Supplemental disability cost ($ million)77188194202207
 Total gross cost ($ million)1,8144,5614,7134,8204,939
ONBasic cost of GBI ($ million)20,99854,01256,54657,85159,246
 Number of recipients (000)5,6315,8986,0106,0256,038
 Average GBI ($)3,7299,1579,4099,6029,811
 Supplemental disability cost ($ million)6251,5141,5641,6211,656
 Total gross cost ($ million)21,62355,52758,11059,47260,902
QCBasic cost of GBI ($ million)11,56728,98029,83730,21530,686
 Number of recipients (000)3,2873,3673,3963,3693,350
 Average GBI ($)3,5198,6068,7868,9689,161
 Supplemental disability cost ($ million)207499510525534
 Total gross cost ($ million)11,77429,47830,34730,74131,220
NBBasic cost of GBI ($ million)7982,0032,0552,0652,079
 Number of recipients (000)252257258253250
 Average GBI ($)3,1637,7927,9658,1488,322
 Supplemental disability cost ($ million)43103105108110
 Total gross cost ($ million)8402,1062,1612,1732,189
NSBasic cost of GBI ($ million)1,1892,9963,0833,1143,148
 Number of recipients (000)329339340336333
 Average GBI ($)3,6188,8499,0749,2619,464
 Supplemental disability cost ($ million)65157160164166
 Total gross cost ($ million)1,2543,1533,2433,2783,314
PEIBasic cost of GBI ($ million)177444461471482
 Number of recipients (000)5658595959
 Average GBI ($)3,1317,6917,8108,0178,197
 Supplemental disability cost ($ million)1229303132
 Total gross cost ($ million)188472490502514
NFLBasic cost of GBI ($ million)4911,2471,2571,2511,247
 Number of recipients (000)135140139136132
 Average GBI ($)3,6388,9189,0549,2329,441
 Supplemental disability cost ($ million)3380808283
 Total gross cost ($ million)5251,3271,3381,3331,330
Sources: PBO calculations.
Gross cost of a guaranteed basic income with a phase-out rate of 15%
Table A-3
3rd scenario2020-212021-222022-232023-242024-25
CanadaBasic cost of GBI ($ million)71,435180,812188,369192,573197,238
 Number of recipients (000)19,01219,60319,88619,91119,950
 Average GBI ($)3,7579,2249,4729,6729,887
 Supplemental disability cost ($ million)1,4483,5053,6153,7433,813
 Total gross cost ($ million)72,883184,317191,984196,316201,052
BCBasic cost of GBI ($ million)9,36023,83324,88125,45726,080
 Number of recipients (000)2,4792,5602,6042,6102,617
 Average GBI ($)3,7769,3119,5579,7549,965
 Supplemental disability cost ($ million)185448459473471
 Total gross cost ($ million)9,54524,28025,34125,93126,551
ABBasic cost of GBI ($ million)7,99620,37421,38522,10822,909
 Number of recipients (000)2,2212,3072,3542,3822,413
 Average GBI ($)3,6018,8329,0849,2839,494
 Supplemental disability cost ($ million)158385403423438
 Total gross cost ($ million)8,15520,75921,78822,53123,347
SKBasic cost of GBI ($ million)1,9524,9135,1285,2705,434
 Number of recipients (000)551563572576580
 Average GBI ($)3,5458,7248,9619,1559,371
 Supplemental disability cost ($ million)43104108113117
 Total gross cost ($ million)1,9955,0175,2365,3835,551
MBBasic cost of GBI ($ million)2,5056,2766,4966,6486,823
 Number of recipients (000)676691699701704
 Average GBI ($)3,7059,0789,2879,4809,687
 Supplemental disability cost ($ million)77188194202207
 Total gross cost ($ million)2,5826,4636,6906,8507,030
ONBasic cost of GBI ($ million)29,26774,69578,15080,06682,125
 Number of recipients (000)7,5497,8397,9757,9998,027
 Average GBI ($)3,8779,5299,79910,01010,231
 Supplemental disability cost ($ million)6251,5141,5641,6211,656
 Total gross cost ($ million)29,89376,20979,71481,68783,781
QCBasic cost of GBI ($ million)16,57341,25342,60443,21843,962
 Number of recipients (000)4,4444,5304,5664,5424,520
 Average GBI ($)3,7299,1089,3329,5169,726
 Supplemental disability cost ($ million)207499510525534
 Total gross cost ($ million)16,78041,75243,11543,74344,496
NBBasic cost of GBI ($ million)1,1842,9533,0313,0523,081
 Number of recipients (000)362368368363359
 Average GBI ($)3,2678,0318,2428,4038,576
 Supplemental disability cost ($ million)43103105108110
 Total gross cost ($ million)1,2273,0563,1373,1613,191
NSBasic cost of GBI ($ million)1,6654,1704,2934,3434,397
 Number of recipients (000)451461463459454
 Average GBI ($)3,6919,0469,2729,4709,695
 Supplemental disability cost ($ million)65157160164166
 Total gross cost ($ million)1,7304,3274,4534,5074,563
PEIBasic cost of GBI ($ million)260650676692710
 Number of recipients (000)7880818182
 Average GBI ($)3,3278,1408,3398,5088,703
 Supplemental disability cost ($ million)1229303132
 Total gross cost ($ million)272679706723742
NFLBasic cost of GBI ($ million)6721,6951,7241,7191,716
 Number of recipients (000)201206204199194
 Average GBI ($)3,3518,2458,4618,6398,850
 Supplemental disability cost ($ million)3380808283
 Total gross cost ($ million)7051,7741,8051,8011,799
Sources: PBO calculations.
 

[i] Office of the Parliamentary Budget Officer. (2018). Costing a Guaranteed Basic Income During the COVID Pandemic. Retrieved from https://www.pbo-dpb.gc.ca/web/default/files/Documents/Reports/RP-2021-014-M/RP-2021-014-M_en.pdf 

[ii] Statistics Canada, 2020. The Daily: Labour Force Survey, August 2020. Retrieved from: https://www150.statcan.gc.ca/n1/daily-quotidien/200904/dq200904a-eng.htm