Basic Income could add $80 billion an year to Canada’s economy, create up to 600,000 Jobs
DANIEL TENCER www.huffingtonpost.ca
A Canada-wide basic income could increase the size of the
“We all know that wealth is created by innovation, by taking
economy by tens of billions of dollars an year and create
risks,” Marinescu said in a call with media Wednesday. “That
hundreds of thousands of new jobs, a new research paper
cannot be forecast, but imagine the impact of people being
says.
able to take risks, of going back to school. I would expect this would have a profound impact on our economic recovery.”
In a recent issued report, the Canadian Centre for Economic Analysis (CANCEA) looked at two potential models of a basic
The two models of basic income the study looked at were a
income, and found that both of them would raise about 2.3
“guaranteed minimum income” of $2,000 a month or $2,900 a
million families above the federal poverty line.
month for a cohabiting couple, with up to $500 a month in disability benefits. For every dollar earned in the labor market,
Both models studied would result in larger economies and
50 cents would be clawed back from payments.
more jobs in the long run, though how much larger, and how many more jobs, depends on how generous the program is,
The other model was a “universal basic income” with two
and whether or not it’s funded by debt spending, the study
parts, a $500 monthly “dividend” paid to every adult with no
found.
clawbacks, plus a $1,500-a-month guaranteed minimum income, or $2,000 per two-adult nuclear family, that is clawed
Basic income advocates have long argued the policy would
back at 50 cents for every dollar earned at work.
result in a larger economy because, out of necessity, low-income earners spend all their money. So money funneled to
The first model was designed by Segal for Ontario’s basic
low-income households ends up as an immediate economic
income pilot project. The second model was designed by UBI
stimulus.
Works.
More cash for investment, more startups
The cost of disbursing the cash under the first program would
One of the key impacts is that businesses’ higher revenues
be $122 billion per year, but that would be offset by up to $80
will mean they are forecast to have as much as $32 billion
billion in new government revenue, thanks to a larger
more cash on hand, collectively, for reinvestment. This would
economy, the report projected. The cost of the second
mean more hiring.
program would be $235 billion annually, with up to $109 billion offset by higher government revenue.
And with Canadians having a cushion of financial security, more people will be willing to take risks and start new
These cost estimates are higher than the cost estimates from
businesses, something that will be especially important in the
the Parliamentary Budget Office, which estimated prior to the
wake of the devastation of the COVID-19 pandemic, said
pandemic, that a basic income would cost $43 billion annual-
Floyd Marinescu, executive director of UBI Works, which
ly. This is because the program modeled by the PBO is less
commissioned the CANCEA study.
generous than the ones modeled in the new report.
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MBE BUSINESS MAGAZINE JANUARY 2021
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