Office of the Parliamentary Budget Officer
[{"label":"Home","url":"https:\/\/www.pbo-dpb.ca\/en"},{"label":"Additional Analyses","url":"https:\/\/www.pbo-dpb.ca\/en\/additional-analyses--analyses-complementaires"},{"label":"Update: Five-Year Cost Estimate of the Guaranteed Basic Income","url":"https:\/\/www.pbo-dpb.ca\/en\/additional-analyses--analyses-complementaires\/BLOG-2021-004--update-five-year-cost-estimate-guaranteed-basic-income--mise-jour-estimation-cinq-ans-cout-revenu-base-garanti"}]

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
Canada 2020-21 2021-22 2022-23 2023-24 2024-25
1st scenario Basic cost of GBI ($ million) 30,544 78,486 80,871 82,420 84,169
Number of recipients (000s) 7,452 7,914 8,071 8,054 8,045
Average GBI ($) 4,099 9,917 10,020 10,234 10,462
Supplemental disability cost ($ million) 1,448 3,505 3,615 3,743 3,813
Total gross cost ($ million) 31,992 81,991 84,486 86,163 87,983
2nd scenario Basic cost of GBI ($ million) 50,143 127,953 133,178 135,958 139,034
Number of recipients (000s) 13,893 14,432 14,660 14,661 14,671
Average GBI ($) 3,609 8,866 9,084 9,274 9,477
Supplemental disability cost ($ million) 1,448 3,505 3,615 3,743 3,813
Total gross cost ($ million) 51,591 131,458 136,793 139,701 142,847
3rd scenario Basic cost of GBI ($ million) 71,435 180,812 188,369 192,573 197,238
Number of recipients (000s) 19,012 19,603 19,886 19,911 19,950
Average GBI ($) 3,757 9,224 9,472 9,672 9,887
Supplemental disability cost ($ million) 1,448 3,505 3,615 3,743 3,813
Total gross cost ($ million) 72,883 184,317 191,984 196,316 201,052
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 scenario 2020-21 2021-22 2022-23 2023-24 2024-25
Canada Basic cost of GBI ($ million) 30,544 78,486 80,871 82,420 84,169
  Number of recipients (000) 7,452 7,914 8,071 8,054 8,045
  Average GBI ($) 4,099 9,917 10,020 10,234 10,462
  Supplemental disability cost ($ million) 1,448 3,505 3,615 3,743 3,813
  Total gross cost ($ million) 31,992 81,991 84,486 86,163 87,983
BC Basic cost of GBI ($ million) 3,681 9,721 9,869 10,037 10,216
  Number of recipients (000) 913 985 1,015 1,013 1,012
  Average GBI ($) 4,032 9,872 9,723 9,907 10,094
  Supplemental disability cost ($ million) 185 448 459 473 471
  Total gross cost ($ million) 3,866 10,168 10,329 10,511 10,687
AB Basic cost of GBI ($ million) 3,309 8,583 8,849 9,138 9,462
  Number of recipients (000) 785 843 864 873 882
  Average GBI ($) 4,217 10,180 10,241 10,464 10,730
  Supplemental disability cost ($ million) 158 385 403 423 438
  Total gross cost ($ million) 3,468 8,968 9,252 9,561 9,900
SK Basic cost of GBI ($ million) 813 2,080 2,161 2,220 2,288
  Number of recipients (000) 197 207 212 213 213
  Average GBI ($) 4,121 10,057 10,211 10,437 10,719
  Supplemental disability cost ($ million) 43 104 108 113 117
  Total gross cost ($ million) 856 2,183 2,269 2,333 2,404
MB Basic cost of GBI ($ million) 1,036 2,623 2,687 2,742 2,806
  Number of recipients (000) 255 266 270 270 270
  Average GBI ($) 4,062 9,848 9,945 10,155 10,398
  Supplemental disability cost ($ million) 77 188 194 202 207
  Total gross cost ($ million) 1,114 2,810 2,881 2,944 3,013
ON Basic cost of GBI ($ million) 13,267 34,338 35,644 36,414 37,250
  Number of recipients (000) 3,133 3,359 3,440 3,439 3,440
  Average GBI ($) 4,235 10,223 10,362 10,589 10,830
  Supplemental disability cost ($ million) 625 1,514 1,564 1,621 1,656
  Total gross cost ($ million) 13,892 35,852 37,208 38,035 38,907
QC Basic cost of GBI ($ million) 6,819 17,017 17,490 17,686 17,943
  Number of recipients (000) 1,751 1,816 1,831 1,814 1,802
  Average GBI ($) 3,895 9,371 9,553 9,752 9,956
  Supplemental disability cost ($ million) 207 499 510 525 534
  Total gross cost ($ million) 7,026 17,516 18,000 18,211 18,477
NB Basic cost of GBI ($ million) 466 1,190 1,203 1,205 1,209
  Number of recipients (000) 125 130 130 129 127
  Average GBI ($) 3,736 9,127 9,227 9,370 9,524
  Supplemental disability cost ($ million) 43 103 105 108 110
  Total gross cost ($ million) 508 1,293 1,309 1,313 1,319
NS Basic cost of GBI ($ million) 722 1,832 1,870 1,883 1,898
  Number of recipients (000) 186 195 196 194 191
  Average GBI ($) 3,883 9,373 9,544 9,729 9,932
  Supplemental disability cost ($ million) 65 157 160 164 166
  Total gross cost ($ million) 787 1,989 2,030 2,047 2,064
PEI Basic cost of GBI ($ million) 96 246 252 257 263
  Number of recipients (000) 29 31 31 31 31
  Average GBI ($) 3,270 7,990 8,055 8,244 8,451
  Supplemental disability cost ($ million) 12 29 30 31 32
  Total gross cost ($ million) 108 275 282 288 295
NFL Basic cost of GBI ($ million) 334 857 845 839 835
  Number of recipients (000) 78 82 81 79 77
  Average GBI ($) 4,266 10,416 10,376 10,591 10,821
  Supplemental disability cost ($ million) 33 80 80 82 83
  Total gross cost ($ million) 368 937 925 921 917
Sources: PBO calculations.
Gross cost of a guaranteed basic income with a phase-out rate of 25%
Table A-2
2nd scenario 2020-21 2021-22 2022-23 2023-24 2024-25
Canada Basic cost of GBI ($ million) 50,143 127,953 133,178 135,958 139,034
  Number of recipients (000) 13,893 14,432 14,660 14,661 14,671
  Average GBI ($) 3,609 8,866 9,084 9,274 9,477
  Supplemental disability cost ($ million) 1,448 3,505 3,615 3,743 3,813
  Total gross cost ($ million) 51,591 131,458 136,793 139,701 142,847
BC Basic cost of GBI ($ million) 6,439 16,612 17,307 17,679 18,073
  Number of recipients (000) 1,814 1,893 1,929 1,933 1,937
  Average GBI ($) 3,549 8,777 8,973 9,144 9,328
  Supplemental disability cost ($ million) 185 448 459 473 471
  Total gross cost ($ million) 6,624 17,059 17,766 18,152 18,544
AB Basic cost of GBI ($ million) 5,415 13,907 14,583 15,066 15,600
  Number of recipients (000) 1,516 1,584 1,619 1,636 1,655
  Average GBI ($) 3,571 8,781 9,006 9,207 9,425
  Supplemental disability cost ($ million) 158 385 403 423 438
  Total gross cost ($ million) 5,573 14,293 14,986 15,489 16,038
SK Basic cost of GBI ($ million) 1,334 3,379 3,531 3,628 3,740
  Number of recipients (000) 378 388 396 397 399
  Average GBI ($) 3,530 8,698 8,922 9,143 9,379
  Supplemental disability cost ($ million) 43 104 108 113 117
  Total gross cost ($ million) 1,377 3,483 3,639 3,741 3,857
MB Basic cost of GBI ($ million) 1,736 4,373 4,519 4,618 4,732
  Number of recipients (000) 494 508 515 516 518
  Average GBI ($) 3,513 8,609 8,771 8,949 9,143
  Supplemental disability cost ($ million) 77 188 194 202 207
  Total gross cost ($ million) 1,814 4,561 4,713 4,820 4,939
ON Basic cost of GBI ($ million) 20,998 54,012 56,546 57,851 59,246
  Number of recipients (000) 5,631 5,898 6,010 6,025 6,038
  Average GBI ($) 3,729 9,157 9,409 9,602 9,811
  Supplemental disability cost ($ million) 625 1,514 1,564 1,621 1,656
  Total gross cost ($ million) 21,623 55,527 58,110 59,472 60,902
QC Basic cost of GBI ($ million) 11,567 28,980 29,837 30,215 30,686
  Number of recipients (000) 3,287 3,367 3,396 3,369 3,350
  Average GBI ($) 3,519 8,606 8,786 8,968 9,161
  Supplemental disability cost ($ million) 207 499 510 525 534
  Total gross cost ($ million) 11,774 29,478 30,347 30,741 31,220
NB Basic cost of GBI ($ million) 798 2,003 2,055 2,065 2,079
  Number of recipients (000) 252 257 258 253 250
  Average GBI ($) 3,163 7,792 7,965 8,148 8,322
  Supplemental disability cost ($ million) 43 103 105 108 110
  Total gross cost ($ million) 840 2,106 2,161 2,173 2,189
NS Basic cost of GBI ($ million) 1,189 2,996 3,083 3,114 3,148
  Number of recipients (000) 329 339 340 336 333
  Average GBI ($) 3,618 8,849 9,074 9,261 9,464
  Supplemental disability cost ($ million) 65 157 160 164 166
  Total gross cost ($ million) 1,254 3,153 3,243 3,278 3,314
PEI Basic cost of GBI ($ million) 177 444 461 471 482
  Number of recipients (000) 56 58 59 59 59
  Average GBI ($) 3,131 7,691 7,810 8,017 8,197
  Supplemental disability cost ($ million) 12 29 30 31 32
  Total gross cost ($ million) 188 472 490 502 514
NFL Basic cost of GBI ($ million) 491 1,247 1,257 1,251 1,247
  Number of recipients (000) 135 140 139 136 132
  Average GBI ($) 3,638 8,918 9,054 9,232 9,441
  Supplemental disability cost ($ million) 33 80 80 82 83
  Total gross cost ($ million) 525 1,327 1,338 1,333 1,330
Sources: PBO calculations.
Gross cost of a guaranteed basic income with a phase-out rate of 15%
Table A-3
3rd scenario 2020-21 2021-22 2022-23 2023-24 2024-25
Canada Basic cost of GBI ($ million) 71,435 180,812 188,369 192,573 197,238
  Number of recipients (000) 19,012 19,603 19,886 19,911 19,950
  Average GBI ($) 3,757 9,224 9,472 9,672 9,887
  Supplemental disability cost ($ million) 1,448 3,505 3,615 3,743 3,813
  Total gross cost ($ million) 72,883 184,317 191,984 196,316 201,052
BC Basic cost of GBI ($ million) 9,360 23,833 24,881 25,457 26,080
  Number of recipients (000) 2,479 2,560 2,604 2,610 2,617
  Average GBI ($) 3,776 9,311 9,557 9,754 9,965
  Supplemental disability cost ($ million) 185 448 459 473 471
  Total gross cost ($ million) 9,545 24,280 25,341 25,931 26,551
AB Basic cost of GBI ($ million) 7,996 20,374 21,385 22,108 22,909
  Number of recipients (000) 2,221 2,307 2,354 2,382 2,413
  Average GBI ($) 3,601 8,832 9,084 9,283 9,494
  Supplemental disability cost ($ million) 158 385 403 423 438
  Total gross cost ($ million) 8,155 20,759 21,788 22,531 23,347
SK Basic cost of GBI ($ million) 1,952 4,913 5,128 5,270 5,434
  Number of recipients (000) 551 563 572 576 580
  Average GBI ($) 3,545 8,724 8,961 9,155 9,371
  Supplemental disability cost ($ million) 43 104 108 113 117
  Total gross cost ($ million) 1,995 5,017 5,236 5,383 5,551
MB Basic cost of GBI ($ million) 2,505 6,276 6,496 6,648 6,823
  Number of recipients (000) 676 691 699 701 704
  Average GBI ($) 3,705 9,078 9,287 9,480 9,687
  Supplemental disability cost ($ million) 77 188 194 202 207
  Total gross cost ($ million) 2,582 6,463 6,690 6,850 7,030
ON Basic cost of GBI ($ million) 29,267 74,695 78,150 80,066 82,125
  Number of recipients (000) 7,549 7,839 7,975 7,999 8,027
  Average GBI ($) 3,877 9,529 9,799 10,010 10,231
  Supplemental disability cost ($ million) 625 1,514 1,564 1,621 1,656
  Total gross cost ($ million) 29,893 76,209 79,714 81,687 83,781
QC Basic cost of GBI ($ million) 16,573 41,253 42,604 43,218 43,962
  Number of recipients (000) 4,444 4,530 4,566 4,542 4,520
  Average GBI ($) 3,729 9,108 9,332 9,516 9,726
  Supplemental disability cost ($ million) 207 499 510 525 534
  Total gross cost ($ million) 16,780 41,752 43,115 43,743 44,496
NB Basic cost of GBI ($ million) 1,184 2,953 3,031 3,052 3,081
  Number of recipients (000) 362 368 368 363 359
  Average GBI ($) 3,267 8,031 8,242 8,403 8,576
  Supplemental disability cost ($ million) 43 103 105 108 110
  Total gross cost ($ million) 1,227 3,056 3,137 3,161 3,191
NS Basic cost of GBI ($ million) 1,665 4,170 4,293 4,343 4,397
  Number of recipients (000) 451 461 463 459 454
  Average GBI ($) 3,691 9,046 9,272 9,470 9,695
  Supplemental disability cost ($ million) 65 157 160 164 166
  Total gross cost ($ million) 1,730 4,327 4,453 4,507 4,563
PEI Basic cost of GBI ($ million) 260 650 676 692 710
  Number of recipients (000) 78 80 81 81 82
  Average GBI ($) 3,327 8,140 8,339 8,508 8,703
  Supplemental disability cost ($ million) 12 29 30 31 32
  Total gross cost ($ million) 272 679 706 723 742
NFL Basic cost of GBI ($ million) 672 1,695 1,724 1,719 1,716
  Number of recipients (000) 201 206 204 199 194
  Average GBI ($) 3,351 8,245 8,461 8,639 8,850
  Supplemental disability cost ($ million) 33 80 80 82 83
  Total gross cost ($ million) 705 1,774 1,805 1,801 1,799
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