(The Canadian Press)

(The Canadian Press)

Budget officer pegs cost of basic income as calls for it grow due to COVID-19

Planned federal spending to date on pandemic-related aid now tops about $174 billion

Providing almost all Canadians with a basic income for six months beginning this fall could cost about $98 billion, the parliamentary budget officer said in a report on the eve of a preview of how COVID-19 will shape government spending until next spring.

The figure is the upper range of the scenarios the budget watchdog was asked to research as part of a report released Tuesday morning as policy-makers consider how to shape emergency supports set to expire in the fall.

Planned federal spending to date on pandemic-related aid now tops about $174 billion, in a range of programs meant to provide a financial floor for individuals and businesses.

ALSO READ: Should CERB be transformed into a universal income program?

The idea of giving a government-guaranteed basic income to Canadians has gained steam as millions have watched their jobs or earnings evaporate in the COVID-19 pandemic.

Finance Minister Bill Morneau and other senior cabinet ministers have repeatedly been asked by senators and MPs about the concept. Advocates argue that it would be an expansion of the $80-billion Canada Emergency Response Benefit for workers who saw their incomes crash.

The CERB and a $45-billion wage-subsidy program are set to expire in October.

Providing six months of a basic income starting that month could cost between $47.5 billion and $98.1 billion, depending on how much of the benefit is clawed back from people whose other incomes increase.

Budget officer Yves Giroux’s report says the average benefit to Canadians aged 18 to 64 would range between $4,500 and $4,800, with the number of recipients depending on the phase-out rate.

Sen. Yuen Pau Woo, who asked for the costing, said a basic-income program could fill in the gaps in Canada’s social safety nets, a patchwork largely run by provinces, that have been exposed by the pandemic.

“It’s a huge undertaking to launch a basic income for the whole country on a permanent basis. The costs are extremely high and the political resistance is likely to be fierce, but we are in a period where it is likely we will have to spend large sums of money on income support going into the balance of 2020 and into 2021,” Woo said in a telephone interview.

“The question to my mind is how we spend it, and in what form.”

A basic income means different things to different people, but it is usually viewed as a no-strings-attached benefit that governments provide to citizens instead of various targeted social benefits.

Also known as a guaranteed minimum income, it can be delivered as a universal payment, or as a means-tested benefit that declines as a recipient’s other income rises.

Giroux’s report says the government could repeal $15 billion in tax measures to offset the overall cost of a basic-income program, which Woo added would likely have to wrap in existing measures to avoid duplication.

The overall cost of the program might be higher than the budget office estimates. The PBO’s estimates rely on some Statistics Canada income data that doesn’t include people living in the northern territories or in First Nations, or some military members.

Nor can the figures simply be doubled to determine a full year’s cost because that might overstate the financial impact. The economy appears to be bouncing back slowly from a bottoming-out in April, and the cost of the program would depend on how many employees are rehired or find new jobs.

The Canadian Federation of Independent Business, which represents small businesses nationwide, said Tuesday that about one-third of members responding to a survey reported being back at full staffing levels, but suggested many believe it will take six months to get back to normal profitability.

Statistics Canada is to release June’s jobs report on Friday.

Projections released Tuesday by the Organisation for Economic Co-operation and Development estimate Canada’s unemployment rate at 11 per cent for the second quarter of the year.

The 37-member international body predicted the national unemployment rate would decline to 7.7 per cent by the end of the year, or to 8.4 per cent should a second wave of the novel coronavirus force renewed lockdowns.

NDP finance critic Peter Julian said Tuesday that the uncertain economic path ahead requires the Liberals to say how the government plans to reshape emergency aid in Wednesday’s fiscal update.

He said a more universal benefit, which the NDP has pushed, would have helped more people and cost less had the Liberals used it from the start.

“It makes more sense to make sure that everybody who needs the benefit can actually get it than the government’s approach,” Julian said.

The Liberals have said the update on Wednesday will provide an economic outlook, an accounting of spending to date and projections for the remainder of the fiscal year, including the expected deficit. The PBO and others estimate that to be at least $250 billion.

Jordan Press, The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic January 7, 2021. THE CANADIAN PRESS/Nathan Denette
Employers might be able to require COVID-19 vaccination from employees: B.C. lawyer

‘An employer must make the case’ using expert science, explains lawyer David Mardiros

On Aug. 26, 1947, a fire sparked in the lumber piles between Alberni Pacific Division sawmill and Alberni Plywood (located where Canal Waterfront Park is now). What resulted was a huge fire on Assembly Wharf One, where several buildings were gutted and stacks of lumber were burned. This photo is one of 24,000 contained in the Alberni Valley Museum’s digital archives, at https://portalberni.pastperfectonline.com. (PHOTO PN07386 COURTESY ALBERNI VALLEY MUSEUM)
LOOK BACK: 1947 fire destroys Port Alberni wharf

Take a peek into the Alberni Valley’s history with the Alberni Valley Museum

Artist Jim Holyoak’s installation “Quagmire.” Holyoak will be the first speaker for the Artist Talk Online Winter 2021 series. (SUBMITTED PHOTO)
North Island College Artist Talk goes online for winter 2021

The series invites contemporary Canadian artists to speak about their professional practice

(NEWS FILE PHOTO)
City of Port Alberni, ACRD prepare for compost collection in 2021

Roadside pickup is expected to begin in the City of Port Alberni in June 2021

U.S. Senator Bernie Sanders sits in on a COVID-19 briefing with Dr. Bonnie Henry, provincial health officer, and Adrian Dix, B.C. minister of health. (Birinder Narang/Twitter)
PHOTOS: Bernie Sanders visits B.C. landmarks through the magic of photo editing

Residents jump on viral trend of photoshopping U.S. senator into images

A woman injects herself with crack cocaine at a supervised consumption site Friday, Jan. 22, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Drug users at greater risk of dying as services scale back in second wave of COVID-19

It pins the blame largely on a lack of supports, a corrupted drug supply

Wet’suwet’en supporters and Coastal GasLink opponents continue to protest outside the B.C. Legislature in Victoria, B.C., on Thursday, February 27, 2020. THE CANADIAN PRESS/Chad Hipolito
‘We’re still in it’: Wet’suwet’en push forward on rights recognition

The 670-km Coastal GasLink pipeline was approved by B.C. and 20 elected First Nations councils on its path

The sky above Mt. Benson in Nanaimo is illuminated by flares as search and rescuers help an injured hiker down the mountain to a waiting ambulance. (Photo courtesy Nanaimo Search and Rescue)
Search plane lights up Nanaimo mountain with flares during icy rope rescue

Rescuers got injured hiker down Mt. Benson to a waiting ambulance Saturday night

Jennifer Cochrane, a Public Health Nurse with Prairie Mountain Health in Virden, administers the COVID-19 vaccine to Robert Farquhar with Westman Regional Laboratory, during the first day of immunizations at the Brandon COVID-19 vaccination supersite in Brandon, Man., on Monday, January 18, 2021. THE CANADIAN PRESS/Tim Smith - POOL
Top doctor urges Canadians to keep up with COVID measures, even as vaccines roll out

More than 776,606 vaccines have been administered so far

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

From the left: Midway RCMP Csts. Jonathan Stermscheg and Chris Hansen, Public Servant Leanne Mclaren and Cpl. Phil Peters. Pictured in the front are Mclaren’s dog, Lincoln and Peters’ dog, Angel. Photo courtesy of BC RCMP
B.C. Mounties commended for bringing firewood to elderly woman

Cpl. Phil Peters said he and detachment members acted after the woman’s husband went to hospital

Dr. Jerome Leis and Dr. Lynfa Stroud are pictured at Sunnybrook Hospital in Toronto on Thursday, January 21, 2021.THE CANADIAN PRESS/Frank Gunn
‘It wasn’t called COVID at the time:’ One year since Canada’s first COVID-19 case

The 56-year-old man was admitted to Toronto’s Sunnybrook Health Sciences Centre

An Uber driver’s vehicle is seen after the company launched service, in Vancouver, Friday, Jan. 24, 2020. Several taxi companies have lost a court bid to run Uber and Lyft off the road in British Columbia. THE CANADIAN PRESS/Darryl Dyck
Taxi companies lose court bid to quash Uber, Lyft approvals in British Columbia

Uber said in a statement that the ruling of the justice is clear and speaks for itself

Most Read