Chris Selley: Universal basic income is not coming to Canada (no matter what the Liberals say)
Let’s get something straight: Despite what you may have seen in the news, the Liberal Party of Canada is not going to implement a universal basic income (UBI), or a guaranteed annual income, or a guaranteed basic income, or a “Canadian basic income,” as the backers of a resolution going before the party’s convention in November are calling it. Liberals are reportedly discussing it in this week’s cabinet retreat in Ottawa. But they’re not going to announce it in the throne speech; they’re not going to roll it out later in their second term; and they’re not going to do it even if they get re-elected to a third term on an explicit promise to do it. If you are indulging any thoughts to the contrary, you need to smarten up.
The reasons this government will not implement anything like UBI are manifold and blindingly obvious, starting with the cost. The purest form of basic income sends the same amount of money to every citizen, regardless of means. Send $1,000 a month to every adult Canadian for a year — a very basic income indeed — and you’ve just spent $364 billion. That’s more than the projected COVID-19 deficit — year after year after year. Down that road lies either financial ruin for the country or a whopping great tax hike, and thereby political ruin for the government.
And never mind the cost. The Trudeau Liberals claim to abhor cutting cheques to the rich. They won an election running against the Harper Conservatives’ universal child care benefit, and replaced it with means-tested benefits. As party policy, it simply makes no sense.
Less basic forms of basic income are means-tested, but still expensive. Send $2,000 a month to the roughly 3.5 million Canadians living below the poverty line and you’ve just spent $84 billion — 3.5 per cent of the country’s GDP; almost three times the defence budget. I’m not saying it shouldn’t happen. I’m just saying it’s not going to.
In theory, countries can recoup some of what they spend on UBI by doing away with other economic supports like welfare, child and seniors benefits and EI. This is what attracts some conservatives to UBI: People know better than the government what they need, and will spend however much money the government has to give them far more efficiently and effectively than any targeted program.
Can you imagine the Liberal Party of Canada proposing to eliminate welfare, child and seniors benefits and EI? You cannot, because it is unimaginable.Liberals are considering a universal basic income, but economists have tough questions for its proponents Colby Cosh: Why can't basic income champions see that now is the worst time? Guaranteed basic income tops policy priorities for Liberal caucus
What the Trudeau Liberals could and might propose is giving poorer people more money, and in a way that doesn’t punish them for moving up the economic ladder — a perfectly fine idea. University of Manitoba economists Wayne Simpson and Harvey Stevens have proposed converting some $80 billion in non-refundable tax credits, which are of no use to the lowest-income Canadians, to refundable ones. In 2015, they calculated that the income of the poorest families — those not even halfway to the poverty line — could be jacked up nearly 30 per cent at a cost of less than $7 billion.
That’s still a whopper by the standards of Canadian politics, but at least it’s in the realm of the conceivable. It is not universal basic income.
As ever, many Liberals seem caught between their ambitions for the country and the fundamentally unambitious nature of their party. The basic income resolution going to the Liberal convention, with the support of caucus , speaks of “a unique opportunity to rethink the Canada of tomorrow.” Finance Minister Chrystia Freeland recently opined that “all Canadians understand that the restart of our economy needs to be green.”
Some prominent Liberals are self-aware enough to see the peril in that sort of obviously false statement. Speaking Monday at an online “recovery summit,” Trudeau’s former principal secretary Gerald Butts cited polling showing Canadians currently feel they’re at “midnight” — nowhere near dawn — in the COVID-19 crisis. “It’s vitally important that when people are feeling as anxious as they are (that we) not arrive in the middle of their anxiety with a pre-existing solution that was developed and determined before the crisis,” he said.
Wise words. And Environment Minister Jonathan Wilkinson — presumably a key player in any forthcoming green recovery — seemed to echo it on Monday. “The government’s first priority has been and will continue to be supporting people through (the pandemic),” he said.
On that front, it might be observed that the Canada Emergency Response Benefit was about as close to universal basic income as Canada has ever come: Take the money! Spend it on what you need! It goes away on September 27, to be replaced by a less generous and less universal augmented version of EI. This is not the behaviour of a government that’s on track to make Canada the first country in the world to implement UBI.
One can see the political temptation of it. Much like “electoral reform,” “basic income” is a term that means many different things to many different people. Those things actually clash violently against each other, but if your candidate is just charming enough and your electorate is just besotted and gullible enough … well, we all know what happened with electoral reform. Surely they can’t get away with it twice.