Trudeau Says He Sees No Path For Basic Income Right Now

Zi-Ann Lum
·Politics Reporter, HuffPost Canada
·5 min read
Prime Minister Justin Trudeau holds a press conference at Rideau Cottage during the COVID pandemic in Ottawa on Dec. 1, 2020. (Photo: CP/Sean Kilpatrick)
Prime Minister Justin Trudeau holds a press conference at Rideau Cottage during the COVID pandemic in Ottawa on Dec. 1, 2020. (Photo: CP/Sean Kilpatrick)

OTTAWA — Prime Minister Justin Trudeau shared his thoughts about a universal basic income during a virtual town hall Wednesday, saying it’s an idea worth discussing but one the government isn’t itching to move ahead on.

The NDP have advocated the idea of basic income in the House of Commons during the pandemic, calling it a tool that could help eliminate poverty by ensuring Canadians have enough money to meet the basic necessities of life in food, clothing, and shelter.

“I think it’s a very important conversation to have. But as Chrystia [Freeland] might point out,” Trudeau said, referring to the country’s finance minister appearing alongside him, “it’s not something that we see a path to moving forward with right now.”

Watch: UN says temporary basic income for the poorest could slow pandemic. Story continues below video.

The terms universal basic income and guaranteed basic income are often used interchangeably, despite having different meanings.

Universal basic income is a concept where everyone, regardless of being high- or low-income earners, would be eligible for payments. The Trump administration gave Americans a taste of a universal basic income with its one-time $1,200 cheque as part of the government’s pandemic stimulus plan.

The criterion for a guaranteed basic/livable/annual income is needs based. Payments are adjusted to allow low-income earners to receive enough money to live above the poverty line.

The prime minister said the government has other priorities and pointed to the fall economic statement and other income support measures.

Those measures include a temporary top-up to the Canada Child Benefit (CCB) of up to $1,200 for every child under the age of six. Trudeau said that program, as he often repeated on the campaign trail last year, has already lifted hundreds of thousands of children from poverty.

“It’s been around now for almost five years and a lot of people take [it] for granted,” he said. Taking a dig at his political rivals, he added: “Other parties voted against it.”

Freeland relayed Trudeau’s CCB praise during the town hall. It “turned out to be one heck of a program” that has addressed child poverty, she said.

“It has done something that governments for years and years, not just in Canada but around the world, have kind of banged their heads against the wall trying to do, you know, get rid of child poverty,” she said.

UNICEF projected in May that child poverty is expected to rise by 15 per cent this year due to the pandemic, impacting an additional 86 million children around the world.

“You’d have to be a hard-hearted ogre to not agree that in principle that it’s a good thing to do,” Freeland said before adding an animated, “Yay Canada.”

The questions asked during the Liberals’ town hall were pre-vetted and submitted in advance.

The CCB top-up is among the tens of billions in new promised spending in the fall economic statement — increasing the deficit for the current fiscal year to $381.6 billion.

Basic income advocates, including former Conservative senator Hugh Segal, promoted the idea before the pandemic as a way to make the cash delivery of dozens of existing government social programs and tax credits for low-income earners easier.

The idea found renewed momentum during the pandemic with the creation of the Canada Emergency Response Benefit (CERB) which helped avoid the employment insurance system from being overwhelmed by a crush of new pandemic-related claims.

A person looks at the Government of Canada's website for Canada Emergency Response Benefit (CERB) in Kingston, Ontario on Sept. 27, 2020.  (Photo: CP/Lars Hagberg)
A person looks at the Government of Canada's website for Canada Emergency Response Benefit (CERB) in Kingston, Ontario on Sept. 27, 2020. (Photo: CP/Lars Hagberg)

Between March and September, the federal emergency income support program provided $500 weekly, for up to 28 weeks, to eligible Canadians. Claimants still receiving benefits at the end of the program were transferred to the employment insurance system.

More than 50 senators signed their names on a letter in May asking for the CERB to be evolved into a guaranteed basic income to overcome eligibility issues that left some Canadians, including those receiving disability benefits unable to receive pandemic-related relief.

Rolling out a temporary basic income could have been a cheaper way to deliver financial support directly to Canadians during a pandemic-induced economic emergency, according to the parliamentary budget officer.

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A July analysis calculated a six-month guaranteed basic income could range anywhere from $47.5 billion to $98.1 billion, depending on how high the phase-out limit would be for every dollar of employment income earned.

The lower the reduction rate, the rate at which a benefit is reduced for every dollar of income earned, the more people would be eligible for basic income support — which would drive up the cost of the overall program.

As of Oct. 4, the federal government had paid out $81.6 billion to 8.9 million CERB recipients. The program wrapped at the end of September, replaced with new benefits and an enhanced employment insurance system.

Momentum behind the idea of a guaranteed basic income is not expected to cool down completely, at least in the Liberal party. Caucus members consider the idea a top resolution, which means it will be up for debate at the party’s next policy convention in April.

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This article originally appeared on HuffPost Canada and has been updated.