Basic Income in Canada: Endorsement by Liberal Party signals growing momentum

In Canada, basic income has become a central issue in the debate on a post-pandemic recovery. Recent steps taken by the governing Liberal Party to endorse the policy has begged the question whether this might represent a serious step towards a permanent national basic income.

In their annual convention in mid-April, Liberal Party grassroots, MPs and delegates voted overwhelmingly in favour of making universal basic income a top policy priority for the party going forward. The policy earned a second place out of 26 policy resolutions to come out of the convention. Although the vote is not binding and does not guarantee that the party will go further with the policy resolution, and further, does not detail what such as Canadian basic income might look like, the move adds to growing momentum surrounding basic income in the national debate.

While the idea has garnered significant national attention previously in Canada, particularly surrounding the recent pilot project in the province of Ontario that was prematurely cancelled, the pandemic has accelerated that debate. At the onset of the country’s first national lock-down in March of last year, there was a significant push for the government to implement an emergency basic income by various advocacy groups such as Basic Income Canada Network, its provincial affiliates as well as by individual long-time basic income proponents. It also garnered significant media attention, with the debate often being centered on the ways in which the current income support system in Canada was inadequate to address the situation.

Many argued that the current employment insurance scheme and the social assistance system were out-dated models not equipped to deal with a changed, and changing, workforce. The New Democratic Party to the left of the Liberal party, which has not traditionally supported basic income but rather a strengthening of the employment insurance system, came out in favor of a universal guaranteed income as a pandemic measure and joined the push for the government to adopt such a policy.

At the time, however, Liberal Prime Minister Justin Trudeau rejected the idea of implementing a universal basic income and opted instead for a more targeted approach. This gave rise to the Canada Emergency Response Benefit (CERB), which was meant for those who did not qualify for existing support programs. The benefit provided individuals who had lost all or part of their income due to the Pandemic with a direct deposit of $2000CAD per month for up to six months. Among the five eligibility criteria for the program, an individual had to have earned minimum $5000CAD in employment income in the previous year, and, as such, it still to some degree tied eligibility to formal employment status.  

There was both approval and criticism of the program from all sides of the political spectrum. The Conservative Party argued that the policy was too costly, enabled people to cheat and would prove a disincentive for people to look for and find new work, while the New Democratic Party criticised the policy for being too heavily conditional, not sufficient and not accessible to all who need it.  

The program was nonetheless seen by some as a precursor to a potential basic income and as an unintended national experiment with basic income. Amid positive stories published in media on how the CERB had helped people get by, there were further calls to turn the program into a basic income – something that was again, however, rejected by the Prime Minister. Nevertheless, acknowledging that taking away this income support from people in the midst of an ongoing pandemic and new impending lock-downs, the program was replaced by a similar one called the Canada Recovery Benefit, set to end in September 2021.

Now, with the prospect of the pandemic coming to an end, the focus is on basic income as a part of the post-pandemic recovery. Further advocacy groups such as LeadNow and UBI Works have campaigned for the governing party to endorse the policy, and in February a Liberal member of parliament introduced a bill calling for national guaranteed basic income. A vote to determine whether the bill will be brought to committee is expected in coming weeks. If indeed based on the CERB, a hypothetical permanent Canadian basic income would likely not include the pandemic-specific work requirements, but further details as to what such a policy would look like are not provided in the motion. 

Additionally, a week before the Liberal convention, the parliamentary budget office issued a report on the cost and the impact on poverty of a national guaranteed basic income, which has significant differences to the “basic income” as defined by BiEN. The report estimates the costs of a model akin to the one that was tested in the pilot project in Ontario to be $87.6 billion in 2022-23. This amount does not take into consideration the potential cost savings of repealing social assistance programs it might replace, as well as the potential savings in terms of health care costs, reduction in crime and less pressure on other social support systems that such a policy might have – something which Evelyn Forget’s groundbreaking work on the Mincome Project in the 1970s in Manitoba shows to be the case. The report concludes that this kind of basic income model could reduce poverty rates by 49% and further estimates that the effect on labour supply is a 1.3 percentage drop in hours worked per week on a national average. Both the cost of a national basic income and the effects on behaviour relating to work have been central concerns in the debate.  

There was much anticipation leading up to the convention, and the vote to endorse basic income as a top policy priority signals a shift in the party’s stance on the policy, even though it is not binding. And while basic income was not a part of the Liberal’s federal budget for 2021-22, which was unveiled following the convention, the endorsement comes in an election year, which could make it a key election issue.