Universal Basic Income (UBI) inches closer to becoming reality as the Senate continues its examination of a controversial piece of legislation that would exacerbate Canada’s spending problem.
Independent Senators Group Senator Kim Pate first sponsored Bill S-233, An Act to develop a national framework for a guaranteed livable basic income, on December 16, 2021, to establish a national UBI framework, she told reporters.
The bill completed its Second Reading this April and is currently under consideration by the Standing Senate Committee on National Finance.
“Now is the fact we are struggling throughout this country with homelessness, food insecurity, poverty, health, mental health issues,” Pate said October 17.
Senate and private members’ bills are rarely successfully passed.
At the conclusion of the Canada Emergency Response Benefit (CERB) during the COVID pandemic, the Commons and Senate engaged in debate to ascertain the feasibility of guaranteed income.
An April 2021 Parliamentary Budget Officer (PBO) report, Distributional and Fiscal Analysis of a National Guaranteed Basic Income, estimated that a guaranteed income program would cost taxpayers $87.6 billion for fiscal year 2022/23.
The federal agency based its analysis on Ontario’s 2017 UBI pilot, where the province processed 4,000 applicants to receive monthly payments for up to three years.
“In 2018, the project ensured that participants received up to 75% of the low-income measure, estimated at $16,989 for a single person and $24,027 for a couple,” said the report.
“Individuals with a disability would receive a universal additional amount of $6,000 per year.”
It claims UBI would “significantly reduce poverty rates in Canada […] by almost half in 2022.”
However, the Tory government axed the program after defeating their Liberal rivals in 2017, claiming it was “not going to be sustainable.”
PBO Yves Giroux told the standing committee that annual costs to set up a national UBI framework would be an estimated $44 billion.
A February 2021 report from Statistics Canada found one in ten Canadians (3.7 million) lived below the poverty line, according to 2019 income tax returns.
At committee, Giroux said the gross total cost of a federal program would cost between $47.5 billion and $98.1 billion.
According to the Fraser Institute, a UBI program that provided working-age Canadians $2,000 a month, would cost $464.5 billion annually.
“For perspective, consider that the entire federal budget in 2019-20 including interest on the national debt was $362.9 billion,” said the report, adding that federal program spending would rise by more than 132% then.
They urged Canadians to “be aware” of the immense costs of any UBI program, which would facilitate “more debt or a host of tax increases.”