Elisabeth May. Picture credit to: Mission City Record.
Elisabeth May, Canada’s Green Party leader has spoken about a “robot tax” which, according to the party’s Platform, focuses on large companies (exempting slam businesses) laying off employees due to investments in artificial intelligence (AI). In this scheme, these companies would pay the equivalent amount of income tax which would be due from the displaced workers. However, funds collected this way would be used not to finance a universal basic income (UBI) – also called a Guaranteed Livable Income in the Platform document – but to backup educational and retraining programs.
This is line with the Party’s professed uncertainty – as expressed in their Platform 2019 Costing – about how to finance and administer a UBI in Canada, although the Party supports UBI as an idea and has pleaded the Federal Government to restart the Ontario basic income pilot project.
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.
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.
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.
The Canadian pressure group UBI Works is continuing its mission to demonstrate the benefits of basic income. The latest piece of work it has commissioned will research the benefits of the Canada Child Benefit.
The Canada Child Benefit offers a tax-free payment to eligible families with children under 18 years old, and according to UBI Works: “Over 1.2 million families are currently receiving an average of $680 per month which has already lifted 300,000 children out of poverty.” While the benefit has no strings attached, it could be disputed whether the Child Benefit can fully be considered a basic income given that applicants are assessed according to their income tax and benefit returns.
UBI Works is a coalition of Canadian business leaders, economists, artists, and other engaged Canadian citizens. Back in 2018, spurred by the heavily disputed cancellation of the Ontario Basic Income Pilot, UBI Works assembled 120 Canadian CEOs to declare their support for the Ontario Pilot.
The latest investigation joins three current pieces research commissioned by UBI Works – on the impact of UBI on the Candian economy; an investigation of different costing models for a national basic income, and a definition of a specific basic income policy for Canada.
This new book from Richard Pereira (and contributors Albert Jörimann (BIEN Switzerland) and Gary Flomenhoft (University of Vermont)) argues that basic income at a decent level is, in fact, affordable. The contributors approach the topic from the perspectives of three different countries — Canada, Switzerland, and Australia — to overcome objections that a universal program to keep all citizens above the poverty line would be too expensive to implement. They assess the complex array of revenue sources that can make universal basic income feasible, from the underestimated value of public program redundancies to new and so far unaccounted publicly owned assets.
The book proposes two basic incomes – one traditional and one based on economic rent, along the lines of the Freedom Dividend. The tradicional approach would eliminate many oppressive bureaucratic, expensive and ineffective programs and direct the money to a higher basic income, while preserving universal healthcare, public education funding and other vital public programs. It demonstrates that this can be achieved without raising income taxes, or taxes on labour income.
The authors believe this to be the most progressive proposal in the literature. The basic income proposed would eliminate poverty (it meets the official poverty line threshold) and, above all, would be feasible and affordable, while addressing economic externalities and economic rent in ways that other proposals have not.
Gaspesie and Îles-de-la-Madeleine regional public health director Yv Bonnier Viger is convinced that basic income can have dramatic positive effects on people’s health. So much so that the local public health sector, plus other regional organizations focused on health, well-being and poverty alleviation, are pushing for a 20-year long experiment in these two localities, also including Bas-Saint-Laurent.
Viger already knows the usual results of basic income experiments: “The experiments done around the world have always given results that go along the same direction: reducing mortality, violence, urgent care visits, hospitalizations, etc.”, he says. Moreover, he is also aware that people (according to experiments) do not use unconditional cash to acquire superfluous things, or to stop working as a result of receiving it. In this context, an (basic income) experimental setup in this region would expectedly be confirming these same results tested at other locations.
This setup is being considered as a negative income tax (NIT), after knowing each recipient declared annual income. After surveying true living costs in the three municipalities abovementioned, the idea is to dispense (every two weeks) unconditional cash gradually, for all those earning less than 40000 CAN$/year. The income starting point – someone earning 0 CAN$/month – would then become 17500 CAN$/year, which approximately amounts to Quebec’s official poverty line.
Financing the experiment would be based on replacing conditional social aid already in place in the region, without touching, however, retirement income (which is based on lifetime contributions). The project’s overall annual cost has been estimated at 800 million CAN$, which is expected to diminish over time, as more savings are made available in the public health sector, social aid management and other public related expenditures.
