CERB’s success is proof that a universal basic income is feasible and beneficial

It’s the season for a nationwide discussion on a Universal Basic Income (RBI).

A UBI is a government payment that supplements family income so that it is slightly above the poverty line or low income cutoff. As households are able to generate more income on their own, UBI payments are reduced and ultimately discontinued.

A UBI shows promise as our most powerful tool to eradicate poverty and solve the crisis of income inequality.

Canada is emerging from a successful experience with an ERC in the form of the Canadian Emergency Relief Benefit (CEP). By preserving the financial integrity of seven million Canadians after losing their jobs to COVID-19, CERB has prepared the country for the powerful economic recovery on the horizon.

The grassroots liberals approved a UBI program at their last political convention earlier this year. The government of Prince Edward Island has asked Ottawa to launch a UBI pilot project in the province.

And last week, for the first time in parliamentary history, there was a debate on the UBI bill. Bill C-273, the Law on the National Strategy for a Guaranteed Basic Income, was sponsored by Liberal MP Julie Dzerowicz, who represents the Toronto riding of Davenport.

UBI programs are a hot topic among economists and policymakers in other G-7 countries who have rolled out their own CERB-like programs, including the US and UK, and even in wealthy states. in Persian Gulf oil. UBI pilot projects are underway in Stockton, California, Kenya.

It should be noted that CERB has been successful although it has never been tried before in Canada on such a scale. It was hastily designed and deployed as authorities simultaneously tackled the pandemic in many other ways.

An UBI, on the other hand, would be designed with more care and with input from the public, so that its effectiveness would be even greater than the proven success of CERB.

The economic distress of the pandemic has taken the greatest toll on women, youth, Indigenous Canadians and workers in the new underclass of workers in the “concert” economy. They hold permanent, part-time low-wage jobs with no job security or benefits.

The economic disparities highlighted during the pandemic will not disappear when the pandemic ends. When the economy comes back to life, with GDP growth forecast of around 6% this year and close to that level in 2022 (more than double the usual rate), workers struggling, as well as many other disadvantaged groups in the country.

Canada experimented with UBI twice, in Manitoba in the 1970s and in Ontario in the late 2010s.

The results were encouraging. The health and professional skills of UBI beneficiaries improved, as financial anxiety was lifted, and the additional funds were used to cover the care expenses of parents who returned to school or looked for better jobs.

But these two experiments were of insufficient duration to provide conclusive evidence of the pros and cons. This is why the Canadian Chamber of Commerce asked Ottawa last year to relaunch the UBI pilot projects in Ontario.

The year before, another group of business CEOs tried unsuccessfully to dissuade Ontario from canceling the UBI program a year earlier than expected.

The business is about measuring results. But the data stream that businesses thrive on suddenly ceased with the untimely death of Ontario’s UBI program.

The North American economy currently suffers from even more acute skills shortages than those of the pre-pandemic years, slowing the pace of economic recovery. This phenomenon is obviously worrying even if it has been exaggerated, as explained above in this space.

That said, an UBI has the potential to increase both the size and quality of the workforce. UBI recipients in pilot projects in Europe and North America have used their relief from financial distress to improve their professional skills.

This explains the support of the business community to at least experiment with UBI. And polls of the Canadian public, dating back to the mid-2010s, have also consistently shown majority support for a RUB.

In opposing an UBI, Conservative MPs cite the estimate made earlier this year by the Parliamentary Budget Office (PBO) that an UBI would cost more than $ 93 billion per year by 2025. The PBO has calculated that a UBI program would increase the income of about 6.4 million Canadians by an average of $ 4,500.



That figure of 6.4 million Canadians is startling, especially when put next to the fact that even before the pandemic, nearly half of Canadians said they were only $ 200 away from cover their bills monthly.

PBO’s impressive cost estimate assumes a more widespread UBI program than the one emerging from Ottawa, and does not take into account the economic benefits of a healthier, larger, and better paid workforce.

It turns out that UBI pilots actually cost between $ 15 billion and $ 90 billion per year, depending on their size.

The PBO and the Tories also fear that a UBI will discourage work.

There is, in fact, little evidence of laziness in the many UBI experiments around the world over the past two decades. And last summer, the U.S. Federal Reserve in San Francisco released a detailed report report on how extended unemployment benefits and other U.S. income supports during the pandemic did not discourage work.

As Dzerowicz said in the parliamentary debate on June 14, “Basic income recipients do not see it as a handout but as a resource that they use to retrain, go back to school or look for a job. full time, and when they work better, earn more and stay employed longer.

The NDP and the Bloc Québécois would prefer to see the multitude of existing social assistance programs even more abundant and generous. But this is precisely what we have been doing for generations, and the gap between rich and poor has steadily widened.

And properly designed, a UBI does not move these extra media.

CERB recipients used their monthly $ 2,000 checks to pay off credit card balances, increase the national double-digit savings rate for the first time in decades, start or grow small businesses, and buy and renovating houses, a boost for a struggling economy and an investment in themselves and in the country.

Lost in criticism of Dzerowicz’s UBI bill, this is exactly what she is proposing, a concise description which you can read here.

It is not a starry vision. Bill C-273 would simply commit Ottawa to lead a national discussion on UBI, in town halls and other venues, leading to a handful of pilot projects to determine the effectiveness of an UBI.

UBI is worth reading and discussing over the backyard fence. And write to your MP about.

Be well. Stay safe.

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