Universal Basic Income: A Fitting Rebuttal to COVID-19’s Economic Consequences?


“A universal basic income seems a fitting rebuttal to the universal hardship wrought by the current pandemic.” The latter statement, which served as the concluding remark in an Macleans opinion piece discussing the legacy of the COVID-19 pandemic, once again adds fuel to the impassioned discourse surrounding the implementation of a universal basic income (UBI) in Canada.

Wholesale agreement as to what the design of a basic income ought to look like remains a divisive topic among its proponents. However, advocates for this kind of social welfare will generally agree on certain foundational elements – the administration and provision of an unconditional, periodic, and fixed payment to every adult on an individual basis – and certain policy objectives – alleviating poverty, broadening the coverage of existing income-support programs, and relieving administrative burdens.

Design methodology aside, as the government continues to tend to the growing pains associated with the execution of its emergency response programs, one question seems to have become increasingly-more popular: why not simply implement a basic income scheme? After-all, an unconditional, consistent stream of fiscal support to all adult Canadians would provide a kind of “safety net” to catch those who were knocked off their feet from the immediate shock of the pandemic, and, simultaneously, an income floor to begin rebuilding in its wake.

There is no telling how long the ripple effect from the pandemic will last, however, it is important to continue planning for life after. According to some, that planning is already well underway. Commentators, including Evelyn Forget and Hugh Segal, suggest that Canada’s Emergency Response Benefit (CERB) is an unintentional experiment in UBI, while others have gone as far as dubbing CERB “the biggest basic income experiment of all”.

Whether akin to CERB or not, there are clear benefits to a UBI scheme in the present economic climate. While it would require structural changes to the tax system, a basic income program would help offset the sudden loss of working income – an issue that seems to almost universally unite Canadians in our existing circumstances. Proponents of implementing a UBI will also be quick to point to other positive indicators linked to past and present experiments in basic income, such as improved mental health, a greater tendency among low-income children to stay in school, and more fiscally responsible decision-making.

Of course, UBI is not immune to criticism. Perhaps the greatest issue facing its implementation – whether as a crisis measure or a permanent program – is financing. According to a cost-estimate by the Parliamentary Budget Office in 2018, a Canadian basic income scheme would cost nearly $80 billion/year (with the potential to shrink to $44 billion/year if the government opts to fold existing federal supports into the new scheme). Even if the government is willing to commit, there is the oft-cited concern that guaranteed income will also create a disincentive for Canadians to work. The latter argument having also been levelled against the ongoing CERB program. Finally, as is the case with any social program, it would be remiss to suggest that a UBI would provide the remedy to all social ills faced by the economically vulnerable – this is not a blanket solution.

Ken Boessenkool, who admits to being critical of the prospect of establishing basic income in “normal times,” has lined up behind arguments in favour of the tool’s present benefits as a crisis measure. Boessenkool noted in an opinion piece for the Globe and Mail that “what makes a UBI a bad idea in the long term is precisely what makes it a great idea in the current crisis.” Boessenkool highlights the disincentivizing effect of guaranteed income schemes, noting that “[i]n a COVID-19 world, we want people to bias their decisions against going to work […] because the income will only last as long as the crisis lasts, there will be little or no lasting consequences.” The nature of the pandemic and the precautionary response it requires may therefore work to offset some of the classic concerns linked to basic income experiments.

If ever there was a time for fast and bold reform, now may be that moment. Canada has already tried its hand with small-scale basic income schemes in Dauphin, Manitoba and with the Ontario Basic Income Pilot (OBIP) in 2018. In the midst of the COVID-19 pandemic, as the Canadian landscape transforms ever-more into a laboratory for medical, political, and fiscal innovation, it may be time for a new UBI experiment. Keeping in mind that unprecedented times often call for unprecedent measures, what might that experiment look like?


- Jacob Schroeter (JD Candidate, OHLS Class of '22)