Universal Basic Income – Busy work or A Solution to Eradicate Poverty

By: Gillian Davis

Written on: 2022-06-27

With Bill S-233 being debated in the Senate, perhaps it’s time to have a serious look at a national framework for a guaranteed livable basic income?  Conservative Senator, Hugh Segal has been a proponent of such a mechanism for decades yet it is usually panned as ‘too expensive’, an infringement on provincial jurisdiction, or a disincentive for participation in the labour force by those right of centre.  On the left are concerns about the elimination of other services, businesses using UBI as a wage subsidy, or the reduction of good paying and stable government employment.  The concept of UBIs have been studied and even trialed in various countries and jurisdictions within Canada – but does it have the desired effect of eliminating poverty and enhancing the dignity and quality of life for the individual in need?

What exactly is UBI and what are the parameters?

Universal Basic Income or UBI also known as Guaranteed Living Income (GLI) among other names, is a basic cost-of-living amount an individual would be paid by the government to sustain themselves.  The bill currently before the Senate provides that everyone over the age of 17 years, living in Canada would qualify.  Controversially, citizenship is not necessary as it states that someone with refugee status, temporary workers, and permanent residence would also qualify.. 

It calls for the Minister of Finance, currently Chrystia Freeland, to draft a framework for its implementation.  What are the parameters for this benefit?  This is proving to be a complicated matter.  First, you would have to determine the poverty level, not only of Canada but for each region within the country.  Then, you would have to determine the cost of living specific to that region and establish how much an individual would need to receive to lift them above the poverty threshold.  You would also have to decide which services they currently use and would continue to be required and which of those services would be eliminated, replaced or continued under UBI.  You would also have to consider labour laws and how you would protect both workers and businesses so as to encourage continued participation in the workforce.  You would also have to consider a host of other possible knock-on effects such as housing costs, current legislation that might be effected, the cost of the program, who would administer and who would pay for it, the constitutional implications, etc…  As you can see, it’s a very complex problem and the framework for it would be dense. 

Why does this keep coming up?

The concept of UBI has been floated since the 1800s but wasn’t truly considered until recent decades.  The pandemic and the economic fallout from it have worked as a catalyst for serious  debate on the subject. 

Worries over climate, technological advancements, and the instability of the growing gig economy have also added to the frustration.  A reduction in consumption which would  aid in preserving our planet, would require reduced productivity and yet people need meaningful work to thrive.  Technology is reducing low and even medium skilled jobs.  The gig economy leaves people without a stable and predictable income, leaving them ineligible for many financial tools such as loans and mortgages.  The current chaos in our economy is getting worse instead of better and will most likely continue on this trajectory for several years if not decades.

At what level of government would it be administered?

In Canada healthcare, education and social service supports are under provincial jurisdiction.  This causes some issues for a UBI program.  The idea is to administer it federally, but the cost of living differs from province to province.  A way around this has been proposed.  Although the government would administer the benefits, similar to Employment Insurance (EI) and Old Age Security (OAS), they wouldn’t necessarily fund it in the same way as EI and OAS are funded through employee contributions.  In essence, it would be an insurance program just like EI and OAS – cue the increases in taxes!  By some estimates, Canadian’s pay over 42% in real taxes per year.  If programs are not eliminated, the tax burden of another government package would be painful. 

When would it be implemented and the parameters for triggering receipt of UBI?

More difficult questions.  There are so many parts to implementation that it’s hard to tell what the parameters would have to be.  Each region would require a different computation by necessity.  Determining who would qualify for UBI, and how they could potentially be weaned off of it, what other services they might require…it’s not going to be a simple calculation.  Consider Indigenous affairs – would UBI be added to these payments or replace them?  Will EI and OAS be replaced by this benefit?  What about disability pensions?  This bill neither asks nor answers these questions.

Conclusion – it’s so unbelievably complicated and nuanced that it is almost impossible to tell whether a system brought about by this unfortunate government would be useful or more damaging to Canadians.  We have a government that can’t tie their own shoes, and now they want to tie someone else’s?  I can’t see how that is going to work.

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