April 24, 2017 / 5:51 PM / in 4 months

Canadian province to test giving basic income amid changing job market

Premier of Ontario Kathleen Wynne speaks during an announcement from healthcare group Bayer, and venture capital firm Versant Ventures, in Toronto, December 12, 2016.Mark Blinch

OTTAWA (Reuters) - Canada's province of Ontario said on Monday it will launch a pilot program offering a basic wage to those who are out of work or have low incomes, the latest region to experiment with providing a guaranteed income amid worries that advances in technology are leaving workers behind.

The idea of a basic income, where governments give money to cover living costs with no strings attached, has been attempted in other parts of the world recently. This year, Finland began mailing out basic income checks, while cities in the Netherlands are exploring similar programs.

The Ontario government said it wants to see if the scheme can help those who have low incomes or are facing employment without job security or benefits.

"With some of the changes we're seeing in the labor market, such as workers being displaced by globalization and technical change, it's leading to questions about how we can do a better job supporting workers who are displaced," said Craig Alexander, chief economist at the Conference Board of Canada.

In Ontario, Canada's most populous province, up to 4,000 people between the ages of 18 to 64 will be able to participate in the three-year pilot project, though a control group will not receive payments.

The provincial government will pay up to C$16,989 ($12,584) a year to a low-income single person, while couples will receive up to C$24,027 a year. Half of any income earned will be deducted from the payout.

Ontario is home to the country's manufacturing sector, which has shrunk over the years, taking jobs with it.

Pointing to pressures from increasing automation and uncertainty surrounding trade policy between Canada and the United States, Ontario Premiere Kathleen Wynne said the government must respond.

"We are entering a new and very different era. From technology to Trump, it is a time of greater uncertainty and change," Wynne said.

Residents of the cities of Hamilton, Thunder Bay or Lindsay will be able to participate in the program, which is expected to start in late spring. Participants will be randomly selected.

The results of the pilot project will help address issues such as cost and how to support displaced workers while also encouraging them to find work, said Alexander.

Canada last experimented with basic income in the 1970s when the province of Manitoba ran a federal-provincial program that gave benefits to low-income households. It ended in 1979 as new governments were elected.

Reporting by Leah Schnurr; Editing by Bernadette Baum and Phil Berlowitz

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