Providing a Basic Income to Canadians
Basic Income (BI), a program where a regular, predictable income is unconditionally available to recipients who need it. It is a proposed alternative to existing social assistance programs. BI provides an amount of money capable of supporting a stable, healthy life, and enables all who receive it to be full participants in the economy. While there are numerous benefits associated with BI, this paper highlights some of its most impressive parts and looks at some of the issues that might arise if Canada were to adopt this system.
Who Needs Universal Basic Income?
BI provides income to people whose income falls below the level that provides them with the necessities to maintain a stable, healthy life. In Canada today, close to 40% of current jobs are precarious – that is, low paying, usually by contract, and with little or no benefits or security. This is often refered to as the “gig”ecomony. Additionally, technological advancements, climate change land globalization have also put many jobs at risk.
BI alleviates some of these risks by providing recipients with basic income as they look for more secure employment and/or to upgrade their skills for use in the new economy.
Benefits Associated with Basic Income
The benefits associated with BI can be far-reaching and avoid many of the pitfalls found in existing social assistance programs. BI is a safety net that provides its recipients with more flexibility and less stigma than current social assistance programs.
BI is not a completely foreign concept in Canada. For example, the Child Benefit Program is a tax-free monthly payment made by the Canada Revenue Agency to eligible families to assist those families in raising their children. Research has shown that every dollar spent by the government in this program results in two dollars of economic activity. This leads to total economic activity of $139 billion. Another example is the Guaranteed Income Supplement available to seniors to top up their Old Age Security pension if their income falls below a certain level.
Canadian social assistance programs, as they currently exist, are largely ineffective. Instead of reducing the burden of poverty, these programs can have the unfortunate effect of trapping their recipients in a poverty cycle. The many rules and regulations involved in accessing these programs often stip the recipients of their dignity.
The benefits of BI are widespread and felt almost immediately. First, BI can result in decreased healthcare costs. Data show that an increase in income to those who are currently in poverty allows them to make healthier food choices, brings down their stress levels and results in fewer medical issues and visits to hospitals. This lowers costs to the healthcare system.
Questions About Implementation
As with any program, there are costs and questions associated with implementing BI.
The first question is how the program will be administered to those without a fixed address or those who do not file taxes. Recent numbers show that nearly 1 in 10 Canadians do not file taxes. This issue needs to be resolved particularly as these are the people most likely to need the program.
Second is the cost of providing BI to Canadians. Depending on eligibility, and the amount of money provided, there is a broad range of cost estimates. However, these estimates often miss three key factors: the subsequent cost savings by eliminating or reducing existing social assistance programs, the injection of money back into the economy by recipients and the reduction in healthcare costs as population health improves.
In conclusion, UBI is a potential remedy to some of the identified inequities of the existing social assistance programs. It can provide more flexibility to its recipients to spend the money how they see fit, allowing more personal freedoms and sovereignty in their decision-making. There have been demonstrated benefits in existing programs that act similarly to BI. Many of the costs associated with implementing BI will be offset by resulting decreases in costs elsewhere to the system.
Who Supports Basic Income:
Fifty Senators wrote to Prime Minister Trudeau in support of implementing basic income. The Senators letter can be viewed here.
Forty Bishops from the Anglican Church of Canada and the Evangelical Lutheran Church in Canada wrote to Prime Minister Trudeau in support of basic income. The Bishops' letter can be viewed here.
The Basic Income Network has prepared a brief 4 page policy paper outlining three possible options.
Basic Income Canada Network, “Basic Income: Some Policy Options for Canada IN BRIEF” (23 January 2020).
Ken Boessenkool, “In normal times, universal basic income is a bad idea. But it’s the wisest solution for COVID-19 economic strain”, The Globe and Mail (19 March 2020).
Tim Ford, “A universal basic income could help counter COVID-19’s economic damage”, CBC (22 March 2020).