A universal basic income would not only lift more than 3.2 million Canadians out of poverty, it would also create hundreds of thousands of new jobs, grow the economy by tens of billions of dollars and eventually pay for itself with increased tax revenues.
That’s according to a new report by the Canadian Centre for Economic Analysis (CANCEA), which was commissioned by basic income advocacy group UBI Works to look at the potential economic impacts of Canada implementing two different kinds of basic income programs.
“I think the biggest message coming out of this (report) is that a basic income program can be designed in a sustainable way,” said Paul Smetanin, CANCEA president and one of the report’s authors. “It can be thought of as an investment as opposed to a cost.”
A basic income program can take many different forms, but it is essentially an unconditional cash transfer from the government to individuals. It would, theoretically, replace other social assistance payments, such as employment insurance and welfare, that critics say are insufficient and administratively onerous.
Interest in basic income programs has increased during the COVID-19 pandemic due to the unprecedented economic shock and the popularity of the Canada Emergency Response Benefit, which for roughly six months paid $500 per week to 8.9 million Canadians who had lost work due to the pandemic.
Smetanin said his company is not advocating for a basic income and the report makes no prescriptions from a policy perspective. He said they simply assessed two different basic income models through the “hard, cold lens of econometrics.”
The first, a guaranteed minimum income based on the design of Ontario’s cancelled basic income pilot project, would ensure a minimum income of $24,000 for individuals and $34,700 for couples. The second program, based on a proposal by UBI Works, would guarantee a minimum income of $24,000 for individuals and $36,000 for couples, while also paying a $6,000 “universal dividend” to all adults.
Both programs would “claw back” 50 cents for every $1 of employment income and 100 per cent of all income from other government transfers, excluding the Canada Child Benefit and the $6,000 dividend.
The report found that, depending on which program was used and how it was funded, it would create between 298,000 and 598,000 new jobs after five years, and add between $36 and $84 billion annually to Canada’s GDP.
Each program “has the potential to essentially eliminate poverty in Canada,” the report says, while also raising between $389 and $514 billion in new tax revenues over 25 years.
UBI Works founder Floyd Marinescu said the social benefits of basic income programs are well known, but “what no one’s been able to say until now is that it can also grow the economy.”
Marinescu said he hopes the report will get people to consider basic income programs as an investment with a “rate of return in real economic numbers, not just a cost.”
The report considered a wide range of possibilities for how a basic income program would be funded, from being mostly paid for by government debt, to mostly covered by taxing households and businesses. Smetanin said the analysis showed that to have the most positive economic impact, the program should be funded primarily by taxing higher income households.
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“If you do it by taxing businesses, the economic impacts start to deteriorate quite quickly,” he said. “If you use too much debt, the economic impacts won’t keep up with the accumulation of debt.”
Marinescu said the report makes a strong case for utilizing a basic income as part of Canada’s post-pandemic economic recovery.
“Our government is going into massive debt funding all kinds of things, but this report shows that a basic income could actually be a lot cheaper than what’s happening right now as recovery spending.”
CanadianBaconBrain on December 10th, 2020 at 04:30 UTC »
Pff stupid article
"Smetanin said the analysis showed that to have the most positive economic impact, the program should be funded primarily by taxing higher income households."
Save the big question for the last sentence of the whole article, every transfusion needs a fresh source of blood afterall.
"higher income" what does that even mean? In the end somehow we want to have our cake and eat it too. We want the benefits of what capitalism brings us but it seems, when i risk my ass building my business with ZERO help from the goverment. I have to support the entire canadian goverment with their mumbo jumpo economic experiment.
Nothing like a sign that says i have a job and i want UBI, sorry buddy you lousy 45k a year and doing shit ok moron.
Were a services based economy. we don't make shit. were gonna pay people to use our money to buy imported goddamn goods while we pump the economy with printed money. I think we skipped the lesson on what the effects of inflation are. People will still be poor!
people cant buy houses now! so you get 6000$ a year that burger will cost you 150$ still doesnt change anything you still will be priced out of buying shit. You
and lets not forget the biggest part of all this! We have a smart peatry dish aready in the works amd look at the fucking results
did they miss the article about the destination of all those billions of covid dollars given out??
50% went to IMPORTED goods!
the article
anyways the koolaid drinkers are in power keep that in mind people
Johnnyflame04 on December 10th, 2020 at 00:25 UTC »
This article offered no meat to their claims, they simply said we found that.... Can a UBI expert tell me how paying people simply to exist is going to create jobs? Which would most likely answer my next qiestion, how do you expect taxable income to go up by giving people tax paxers money?
DerekVanGorder on December 9th, 2020 at 20:08 UTC »
UBI is a truly great idea. But to really understand it, and what makes it possible, we have to re-examine some common, fundamental assumptions about how the economy works, held by economists, politicians, and the general public alike. You can see these assumptions at work even in a pro-UBI article like this.
"UBI will pay for itself with tax revenue." "UBI will create new jobs."These aren't the right ways to justify a UBI. They come with nested assumptions that A) a government spending more money than it taxes is some kind of problem, and B) that "more jobs" is better than fewer jobs. These ways of thinking about money and the economy are quickly becoming outdated.
UBI is an alternative form of monetary policy. It's a new way of managing the creation & distribution of money, compared to the current method of creating money in order to employ more people.
At core, UBI is about changing our goal from chasing "full employment" and job creation, to activating more consumer goods production for its own sake. It's about achieving more prosperity, with less work, simply because we can.
In other words, UBI allows us to finally automate away the unnecessary jobs which we should have been automating away all along. The status quo that we've lived through the past 100 years, is using job-creation policy tools as a mechanism to reduce poverty. This was inefficient; a waste of time and resources, that could never directly address the problem. The real solution to poverty was always a properly calibrated basic income-- we just haven't considered it seriously until recently.
This is still a deeply counter-intuitive point to most people. It's going to take time to get used to the idea that it's OK to enjoy more goods, with less work. But we have to make this transition.