It's time to take a 'leap of faith' and test basic income in Canada, says senator
With CERB set to expire in October, B.C.'s Yuen Pau Woo says now 'may be a better time than any' for a pilot
There's no time like a pandemic to test out universal basic income in Canada, says Sen. Yuen Pau Woo.
Woo, a B.C. senator and head of the Independent Senators' group, recently asked the Parliamentary Budget Office to analyze the potential cost of providing a basic income to all Canadians for six months.
The PBO says the project could cost anywhere from $47.5 billion to $98 billion, depending how much the government claws back payments to people who earn other income.
The analysis is based on Ontario's basic income pilot, under which individuals received $16,989 annually, and couples received $24,027. That program was launched under the previous Liberal government in the province and cancelled by Progressive Conservative Premier Doug Ford.
With the Canada Emergency Response Benefit (CERB) set to expire in October, Woo says now is the perfect time to pilot a national basic income program in Canada. Here is part of his conversation with As It Happens guest host Nil Köksal.
This idea of creating a universal basic income has been discussed and debated, as you know, for many years. Why do you feel the federal government should do this now?
The starting point is the grim economic outlook for the balance of this year and into 2021. We've just had a fiscal snapshot from the finance minister, which suggests that the recovery will be modest and possibly very erratic. That suggests to me that we will need income support of some sort into 2021.
To the extent that we need special income support, this is an opportunity to pilot basic income, perhaps at a provincial level, to see if this might be a better way to help Canadians and to reap the benefits that the proponents of basic income have been touting for many years.
Is there, do you think, now the political will and support from the public to actually make it happen this time?
Well, frankly, no, I don't think there is political will. But there is a lot of public discussion and sympathy for the idea.
I'm a realist here and I'm also mindful of the political resistance to this idea. But this may be a better time than any to put the idea to test in a way that really does fill a need.
You did ask the parliamentary budget officer to figure out how much this might all cost. The estimate for a six-month program is somewhere between $47.5 billion to $98 billion. Can the federal government actually afford to keep spending like that?
The parliamentary budget officer produced the gross costs that you cited ... but they also came up with estimates of offsets, fiscal offsets, that would defray the costs of the basic income. And they pegged the offsets as as high as $46 billion.
Of course, there are political choices to be made as to which offsets to use. But the point here is that a basic income does not and will not be as costly as the gross cost.
And to the extent that we have to spend money on income support — and, you know, we'll spend $60-$70-billion dollars on CERB — most people would say that this is money well spent. If we're going to have to provide this kind of support, why don't we look at a range of options, including basic income?
How do you go about convincing people, though, who are already concerned about the money that the government has paid out since this crisis hit? A lot of resistance for people who say it's too open to abuse, that it gives people an incentive not to work. So how do you change that thinking?
Well, this is not CERB, and that's precisely my point. The government could well decide to simply extend the CERB. I don't think they will do that. But if they were to do that, we would be left to the same problem that the critics have raised, which is that there's no incentive to work ... to earn money beyond the $1,000 threshold.
The basic income concept that the PBO has modelled includes a number of scenarios where there would be some benefit reduction, but not 100 per cent benefit reduction.
That, I think, addresses many of the concerns about disincentives to return to work.
It will take a leap of faith. And that's why I'm saying that this is an opportunity for us to, at the very least, conduct an experiment.- Sen. Yuen Pau Woo
Another criticism that some folks have is that, you know, it's too blunt an instrument.... For example, an out-of-work university student with wealthy parents doesn't have the same needs as someone, for example, who may have lost a spouse in a workplace accident. What do you say to that?
We already have a number of basic income-type measures, you know, wage supplement, guaranteed income supplement, childcare benefit and so on. So this is not, in principle, different from those, but it would have a wider coverage.
But the underlying principle here is that all Canadians are vulnerable to shocks in the economy, shocks in their personal lives that may put them in a situation where they are, all of a sudden, vulnerable. And we saw that very starkly in the COVID-19 crisis.
The basic income does not provide for a lavish lifestyle, not by any means, but it provides individuals with, fundamentally provides them with freedom. Freedoms to, obviously, house themselves, feed themselves, freedoms to pursue education, for example, to not put themselves in precarious situations. These are particularly important for disadvantaged communities. You know, whether we're talking about a lot of First Nations communities and other racialized minorities.
If there's one thing we've learned from the COVID-19 crisis is that there are many gaps in our social safety net system. And there seems to be a determination on the part of Canadians of all political stripes to patch these gaps. Basic income would be one way of doing that.
The federal government today is facing a lot of criticism about the numbers it's released [in] its fiscal snapshot out today. How hopeful are you ... that they will hear you out as you push for this plan?
You have to work with the groups that are willing to do the work and to make the investment, and that's why I suggested that the provinces that have already talked about basic income as part of their own provincial platforms and talked about pilot projects and so on may be the easiest to persuade.
I don't underestimate the political challenges, but this is an opportunity that's before us. We all know that major social policy reform happens after big crises — you know, after the war and after the Depression and so on. This may be the equivalent for Canada and other Western industrialized countries.
It will take a leap of faith. And that's why I'm saying that this is an opportunity for us to, at the very least, conduct an experiment, if you will. Maybe a time-limited experiment that can be used to demonstrate if, in fact, [there are] benefits.
And I'm talking about benefits that go beyond monetary gain. I'm talking about health benefits, education benefits, social benefits. If these come to pass, then the political consensus on the value of a basic income might come together much more quickly than we had previously thought.
Written by Sheena Goodyear. Interview produced by Kate Swoger. Edited for length and clarity.