News

Would a universal basic income help Canada’s lowest earners? It depends who you ask

Would a universal basic income help Canada’s lowest earners? It depends who you ask
Top Stories
The prospect of a universal basic income in Canada is moving onto the front burner for the governing Liberal party and many policy-makers, but some experts are concerned that such a program won’t help the most vulnerable.

The latest report on a universal basic income (UBI) from the independent Parliamentary Budget Officer on Wednesday says such a program would boost the average disposable income of Canada’s lowest earners by just over $4,500, reducing poverty across the country.

Higher earners, by comparison, would see a drop of between one and two per cent in disposable income, due to an increase in taxes and the elimination of many tax credits.

The report used parameters set for Ontario’s 2017 basic income pilot project, pegging a UBI at $16,989 for a single person and $24,027 for a couple, with the amount decreasing by $0.50 for every dollar earned through employment. It estimated the program would cost $87 billion in 2022, rising to $93 billion in 2025.

There’s a push from within the Liberal party, as well as from MPs of other parties, to see a UBI put in place for Canada. In November, an Environics Institute survey found 64 per cent of respondents supported replacing current emergency assistance programs for people impacted by the COVID-19 pandemic with a UBI.

But some experts say a UBI may not be the best way to reduce poverty, because it could mean less targeted supports for historically marginalized groups. They say the country should look at bolstering existing programs instead.

“I’m really wanting to support it,” said Rebekah Young, director of fiscal and provincial economics at Scotiabank.

However, Young said, “a basic income that tries to level the playing field for everybody isn’t helping those that are likely struggling the most.”

People have various needs, she said, and putting a basic income in place that is one-size-fits-all likely won’t help people with very specific needs, such as racialized single mothers or those living with disabilities.

The PBO report also found that a UBI could provide a disincentive to work, which Young said may have an impact on economic growth.

The analysis also assumed that a swath of government programs sending out targeted support would be discontinued under a UBI system.

Mike Moffatt, senior director at the Smart Prosperity Institute, a policy think tank, said one “really problematic” part of the model in the PBO report was that it removed targeted programs for people living with disabilities.

Instead, it added an additional $6,000 for them, to be tacked onto the UBI.

The problem with, Moffat said, is that is not all people living with disabilities have the same challenges. “The people who are of the highest needs are absolutely going to lose out.”

Moffatt pointed to a UBI study by the British Columbia Basic Income Panel, which concluded that a basic income wouldn’t be the best way to reduce poverty because people’s needs are too diverse.

Instead, it said, existing targeted programs should be tuned up and strengthened.

Moffatt also noted that housing is a major issue when it comes to poverty reduction, and “UBI is not going to get a single house built.”

Loading...Loading...Loading...Loading...Loading...

Loading...

“I would like to see from Liberals and everyone else, thinking through … ‘What are you trying to accomplish as a government?’ And then let’s look at our options,” he said.

“Instead, the debate seems to be somewhat backwards where we’ve decided the tool that we want to use first and then we’re deciding what problems to apply it to.”

More than 6.4 million people would see a boost to their disposable income with a UBI in place, the PBO report found.

Manitoba and Saskatchewan would see the biggest gains in average household disposable income at $6,094 and $5,554 respectively, while the greatest poverty rate reduction would happen in Manitoba and Quebec, with both seeing reductions of just over 60 per cent.
Read more on Toronto Star
News Topics :
RELATED STORIES :
Technology
The Canadian government revealed details about a UBI pilot program that will run in three areas of Ontario. This UBI experiment will help the government decide whether to adapt a...
Canada
A panel appointed by the provincial government in 2018 to examine the idea of a basic income reported today that it would not be the most effective way to improve...
Business
Imagine that upon entering the COVID 19 crisis we had a universal basic income UBI program in place. If UBI were to be implemented, every adult would receive a fixed monthly...
Sports
A Canada wide basic income could increase the size of the economy by tens of billions of dollars a year and create hundreds of thousands of new jobs, a new research...
Sports
MONTREAL A basic income of $22, 000 a year to all adult Canadians is financially doable, and would nearly eliminate poverty in the country, a new economic analysis argues...