After the Ontario government scrapped its basic income pilot project this past summer, the federal government is looking to take up the mantle and experiment with offering Canadians money just for breathing. Considering that there is an election on the horizon, you cannot but wonder if Prime Minister Justin Trudeau and the governing Liberals are using this progressive proposal to cling to power, or they really believe that handing out buckets of loonies and toonies will spur economic prosperity.
Speaking in an interview with The Canadian Press news agency, the prime minister revealed that Ottawa might enhance the present crop of federal programs by introducing a minimum income to alleviate labor instability. He believes that this could be one of the tools to help lift many working Canadians out of poverty and fend off precarious employment.
…it will breed a myriad of unintended consequences.
Social Development Minister Jean-Yves Duclos said in a separate interview that such a program would be geared towards Canadians who aren’t eligible for the various federal benefits extended to families, seniors, and the poor. For now, the Liberals appear to be weighing the pros and cons. On one hand, the government argues that policies established in recent years, like the income-tested Canada Child Benefit, are similar to a guaranteed income. On the other, officials say it could slash bureaucracy and red tape for Ottawa and for recipients.
Minister Duclos told the newswire:
“Whether this is going to be enhanced eventually to a broader guaranteed minimum income for all Canadians, including those without children that are not currently covered by a guaranteed minimum income at the federal level, I believe the answer is yes. At some point, there will be a universal guaranteed minimum income in Canada for all Canadians.”
It remains unclear when Trudeau and Co. would begin flirting with the idea.
So, how much would this endeavor cost the taxpayers?
According to recent estimates from the parliamentary budget office, federal spending would need to climb $43.1 billion every year to provide low-income households with an average $9,421. The feds already spend nearly $33 billion annually on supporting low-income Canadians.
The provinces, territories, and municipalities spent $69 billion last year on welfare programs, from children’s assistance programs to aid for people with disabilities. Should the federal government move ahead with a basic income, it would require the approval from these jurisdictions first.
When the concept was first floated around in the 1970s, it was meant to completely replace the welfare state and the bureaucracy. This meant there would be no more red tape, no more welfare offices, and no more fraud and abuse. There would be one central office to distribute and process payments and nothing else.
How times have changed!
In recent years, as the idea has gained significant momentum worldwide, proponents have said they want to complement the current system with a living stipend. Rather than eliminating the need for civil servants, the basic income supplement would be another layer of the entitlement structure.
The taxpayers aren’t saving any money, government just gets bigger, and the nation creates another generation of dependents. Before you know it, more Canadians are entitled to their entitlements, and another scheme just as asinine as this one would be born. This is the swelling cradle-to-grave system that so many conservatives and libertarians warn about.
It never ends.
Rest of the World
Across the globe, there are politicians demanding free money for all and there are jurisdictions testing out the idea. Recently, Senator Kamala Harris (D-CA), who might run for president in 2020, unveiled her support for a partial guaranteed income that would offer up to $500 per month to impoverished families. Other Democrats appear to be in favor of the theory, except former Vice President and 2020 frontrunner Joe Biden, who said “a job is a lot more than just a paycheck,” noting that you “strip people of their dignity.”
A broken clock is right twice a day.
Stockton, CA, the city that filed for bankruptcy in 2013, launched a plan in February to give families $500 per month for a year. Mayor Michael Tubbs says running a test will determine if there are economic and social positives or negatives. But, if his remarks are anything to go by, he already has a preconceived conclusion: It’s a success.
Chicago, as if it didn’t have enough fiscal and social setbacks, is set to introduce the costly boondoggle.
Finland became one of the first countries to test such a program, running a three-year trial that gives tax-free money to all Finns over 18. After about a year, the government scrapped the welfare benefit without any explanation. It is scheduled to present the results later next year.
Ontario, too, threw in the towel when Premier Doug Ford and the Progressive Conservatives received the key to Queen’s Park in June. It received a lot of pushback from the recipients and the media, but Ford and the PCs thought this was the right move to save tax dollars and prevent more people on the public dime.
It’s only a matter of time before a basic income becomes the norm, not the exception.
Road to Serfdom
Legendary economist Friedrich Hayek wrote in The Road to Serfdom:
“The power which a multiple millionaire, who may be my neighbour and perhaps my employer, has over me is very much less than that which the smallest functionaire possesses who wields the coercive power of the state, and on whose discretion it depends whether and how I am to be allowed to live or to work.”
The left says we should fear the 1%, but a Jim Rogers or a Warren Buffett has little influence on our lives, unless they start advocating for certain public policies that affect our day-to-day existence.
It Is a frightening prospect to depend on the benevolence of bureaucrats and politicians. It is even more terrifying to think that there will inevitably be generations that refuse to learn a trade, attain an education, or seek out employment because they know they’re getting money from the state no matter what. The basic income may seem like a benign policy prescription for the various threats to the labor market, but, like every policy advocated by leftists, it will breed a myriad of unintended consequences.