02:30 PM EST, 02/19/2025 (MT Newswires) -- The government's fiscal watchdog says a guaranteed basic income program at the federal level could cut poverty rates in Canada by up to 40%, The Canadian Press is reporting Wednesday.

In a new report, the parliamentary budget officer says that a Canadian family in the lowest earning group could expect to receive an average of $6,100 in annual disposable income through such a program. Higher earners could see their income levels drop because of changes in the tax system to implement the basic income support. The report says introducing a federal basic income program would cost up to $107 billion in 2025.

The PBO also assumes that other social supports would be cut to implement the basic income, resulting in a net cost to the federal government of between $3.6 billion and $5 billion, depending on the exact model and family definition.

The PBO's analysis is based on Ontario's 2017 basic income pilot project and uses as its foundation the nuclear family -- any unit consisting of an individual and a possible spouse or common-law partner, plus their children under 18 years old. The PBO says this definition has flaws, since one dwelling can house multiple nuclear families if older generations or adult children are living there.

Wednesday's report updates a similar study from 2021 and includes analysis for an "economic family" - a unit that encompasses all relations by blood, marriage or adoption living in the same dwelling. Under that definition, the cost of administering the program would be cut by more than half to $53 billion in 2025, before taking into account any changes to the tax system or to social supports.

The impact on poverty rates also would be greater, with a 40% reduction for the economic family definition, compared to 34% under the nuclear family model.

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