Opinion

Canada’s Child Benefit is basic income ‘hiding in plain sight’

Updated on October 8, 2019 below article


In July 2016, the Liberal government of Justin Trudeau introduced Unconditional Basic Income to Canada and never mentioned it to anyone.

6.4 million Canadians can count on benefiting from about $500, tax-free, every month, no questions asked. It contributes $46 billion per year to GDP and adds $4 to GDP for every dollar it costs.

It’s called the Canada Child Benefit (CCB).

Why have we not heard that this program is, in fact, a Basic Income? When the Ontario government announced the abrupt cancellation of the Basic Income Pilot Project involving 4,000 low-income people after a few short months, it was all over the news. A permanent nationwide Basic Income involving 6.4 million Canadians and their parents (19 million people in total) runs for three years with stunning success and not one word in the press.

Indeed, I have spoken with many Liberal Members of Parliament who all express dismay and disappointment at the lack of visibility the CCB has among their constituents. Yet Canadians know how Basic Income works because one has existed for close to 70 years.

“In 1951, following an amendment to the British North America Act to permit the federal government to operate a pension plan, the Canadian Parliament passed the Old Age Security Act, which provided a universal pension, or demogrant, of $40 per month financed and administered by the federal government. All Canadians aged 70 and over who could meet the more liberal residence requirements were eligible, regardless of their other income or assets. Pension payments began in 1952 and were taxable.”[emphasis added]

Who was in power in 1951? Louis St. Laurent’s Liberals!

Why focus, in this discussion, on only one Party? Is that partisan politics? Some background:

The October 21st election is the perfect crucible in which to forge a new narrative about Basic Income in Canada. The centre-left Liberals of Justin Trudeau, whose father was prime minister from 1968 to 1984, swept into power in 2015 after a decade of Conservative rule. The progressive New Democratic Party is thinking about Basic Income on a 30-year timescale. The Green party is demanding more tests. Only the Liberals can point to action, although they refuse to admit it.

So, while Liberals can legitimately claim both a long history and recent accomplishments in implementing permanent Unconditional Basic Income programs (UBI), the public has no idea that here are two examples of highly successful implementations, hiding in plain sight! Both were introduced by Liberal governments and no one knows about it.

There is no mainstream recognition that Basic Income is a fait accompli in Canada. Sadly, many of the cognoscenti also resist this paradigm shift.

Yet a recent independent report sponsored by UBIWorks, shows that the CCB is not only an Unconditional Basic Income, but it is also a highly successful one for families and the economy. The report makes the following key points:

  • Canada has demonstrated the effectiveness of a national-scale Basic Income
  • 6.4 million Canadians benefit from about $500, tax-free, each month
  • The CCB directly touches approximately 19 million people. This not a test.
  • The CCB is an ongoing national program that has been running successfully for over 3 years
  • The CCB contributes $46B annually to the Canadian economy – exceeding the economy of Nova Scotia
  • CCB-related spending drives $85B / year in revenues and $18B in gross profits to businesses
  • 453,000 full-time equivalent jobs are contributed by the CCB, 2.5% of the Canadian labour force
  • Every dollar invested drives $2 of GDP and more than 55 cents of is recouped in taxes from economic activity
  • Therefore the CCB drives $4 of GDP for every net dollar it costs
  • The CCB has generated $27B in private capital investment and $77B in wage growth since its inception
  • The CCB has contributed to 3 years of economic growth, low inflation, and unemployment levels at record 40-year lows

Clearly, the Canada Child Benefit is a Canadian flavoured Basic Income which is as close as it gets to a UBI in the real world. It is a huge success hiding in plain sight. it is individual because strictly based on headcount and it is unconditional because you do not have to do anything special to deserve it, and you can do with it as you please, no questions asked. Furthermore, it is a regular, predictable, cash transfer paid monthly, for which you can sign up before you are even born. It is not means-tested. However, it is income-tested, which means wealthier families are phased out from the benefit. Does it deviate in some ways from the ideal, orthodox form of Basic Income? Of course! Where do we find ideal forms in the real world?

A similar demonstration can be made for Old Age Security. Since the facts show the economic impact of Basic Income for ages 0-17 and 65+, why not expand the programs to all those in between? Why not start right away with ages 18-19, who need the money to stay in school or get a good start in life, some other way?

As the incumbent Liberals struggle in the polls and are headed toward a minority government status in the October 21st elections, according to the latest projections, Basic Income advocates around the world can only look on in dismay at this missed opportunity to benefit from changing the narrative about Basic Income in Canada.

 

Updated October 8, 2019

Ten months before October 21st 2019 election, the National Post published an article with the headline: “Liberals say they are looking at ways to provide guaranteed minimum income to all Canadians.” 

Although the nomenclature of Unconditional Basic Income (UBI) is notoriously anarchic, clearly the federal Liberal Party of Canada was considering such a plan. In the article, the Canadian Press reports:

“Prime Minister Justin Trudeau and Social Development Minister Jean-Yves Duclos have argued that the Liberal-created Canada Child Benefit, among other measures, amounts to a guaranteed minimum income already.”

Yet not a word about this, 28 days into the campaign, as I have reported above.

During the first English-language debate, on October 7th, Justin Trudeau hammered home more than once that “Nine hundred thousand Canadians have been lifted out of poverty, including 300,000 children.” He made an oblique reference to the Canada Child Benefit, which is largely responsible for these numbers. 

Unconditional Basic Income was never mentioned even if there is no question that it helps reduce poverty. This is just not the best argument to support it when powerful economic data is available.

Why the Trudeau Liberals have chosen not to play the UBI card, I couldn’t say. They may come to regret the mistake.

Pierre Madden

​​WhatsApp/Cell: +1 514 238-0044

https://www.basicincomemontreal.org/

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Pierre Madden

About Guest Contributor

Guest has written 130 articles.

The views expressed in this Op-Ed piece are solely those of the author and do not necessarily represent the view of Basic Income News or BIEN. BIEN and Basic Income News do not endorse any particular policy, but Basic Income News welcomes discussion from all points of view in its Op-Ed section.

5 comments

  • Caro

    It is a form of UBI, however like social assistance and other current social programs the sliding scale used that takes away money when too much is earned is still the same program with a different name, and only parents with children get access, which does nothing for people living without housing etc. UBI needs to be a set amount that is based on cost of living and should not change according to income. Why should everyone get UBI you might ask? Well if you don’t give it to every single person that is born, no matter their income, then the people that do not get it fight against it because they don’t see the benefit of it and see it as money out of their pocket, because in essence for UBI to work the wealthy will have to pay their fair share. Just my opinion. Have a great weekend

    • While the Canada Child Benefit is calculated strictly on head-count and age, it is paid to care-givers. How else do you give $500 to a toddler? Today 6 400 000 children receive benefits. Including their parents, that’s 19 000 000 people, half the population.
      Although I agree with you that everyone should get it, you have to admit that it’s a good start.

      Most UBI advocates accept as obvious that high income earners will somehow pay back, though taxes, the cash transfers they receive. This is progressive taxation. The more you earn the greater the proportion of your revenue you contribute and this is accepted as fair.

      Just because some wealthy people complain, that doesn’t mean their objections are valid and should be acted upon. The report I refer to in my article emphasizes that UBI is a powerful stimulus for job creation, economic growth and prosperity. This is good for all Canadians, with or without kids.

  • John

    Mr. Madden, you are clearly … confused. The U in UBI stands for Unconditional (or Universal). How is the CCB anything close, when it provides no money to anyone who does not have children?

    The reason no one calls this UBI is because it isn’t.

    • This program is unconditional and universal in a very important way: everyone is a child for a very significant portion of their lives. It’s a nearly universal, unconditional child benefit. That’s extremely important. It’s a temporary UBI because it doesn’t last for your whole life, but it is unconditional in the very same sense that Andrew Yang’s Freedom Dividend is “universal” even though it is “conditional” on the recipient being an adult.

  • John,
    Would you argue that Yang’s Freedom Dividend is not a UBI because it gives nothing to children. The official BIEN definition specifies “delivered to all.” If you think that’s not ambiguous, let me offer an analogy based on US voting law. How do you make sense of “one man, one vote” in light of the three fifths compromise, the Dawes Act, the Magnusen Act, the 19th and 26th amendments and felon voting rights?
    I am not confused. I’m arguing that an uncritical acceptance of the BIEN definition stifles progress by guaranteeing that no implementation of UBI will ever be worthy of the name

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