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Ontario's Basic Income Disaster

 

In Canada's largest Province, Bob Rae (NDP) and David Peterson (Liberal) raised Welfare almost 30% between 1987 to 1991 in Ontario. A minimum wage worker could expect $11,170 net per year (tax + payroll deductions were $1907). An able bodied person under 65 years of age would make $8,889 on Welfare. Sales tax credits would be equal ($587) for both. Obviously, a person not working would have more time to access other programs and charities plus “Cash Jobs”. Welfare was a rational choice over a minimum wage job.

 

Expenditures for Social Assistance increased from under $2B annually to $7B (see chart A). Despite multiple Income tax increases, Taxes from persons remained flat for years: 1990 - $14.1B to 1993 - $14B). Debt (as a percentage of the economy) was added at a World record pace (see chart B) though the recession was similar to 1980 and 2008 in GDP decline (see chart C). A new Government returned Welfare to 1987 levels (1995) and, while the Province returned to balance, Ontariowe is the most indebted Sub-National in World history.

 

Chart A: Social Assistance $2B to $7B

(ON Gov)

 

Chart B: Debt Skyrockets

(National Post)

 

Chart C: Ontario Recessions

(Financial Accountability Office of Ontario)