Last year, as millions of Canadians were told they may have to stay home, close businesses, and physically and socially isolate from the outside world, Prime Minister Justin Trudeau announced the Canada Emergency Response Benefit (CERB) — a federal government initiative to pay $2,000 per month to Canadians in financial crisis due to the COVID-19 pandemic.
It’s been a controversial move, but not completely unprecedented in North America. The CERB has a lot in common with the concept of Universal Basic Income , UBI as it is commonly known.
Though they’re different from each other, the main idea is the same: a government puts a set amount of money into the pockets of citizens, monthly or annually. The goal is to eliminate poverty, grow the middle class, and boost the economy, according to UBI Works, a group that advocates for the policy.
It’s an idea that sounds logical but too good to be true. Does it make sense for the government to put money directly into the pockets of the people? Could it work at the provincial level here in Alberta? Franco Terrazzano, Alberta director of the Canadian Taxpayers Federation, has his doubts.
“Certainly those objectives sound nice, but I think that’s [like] selling magical beans,” he says.
Terrazzano argues implementing a UBI would inevitably lead to higher taxes for Albertans.
“I’m hearing from Albertan families who are worried about their life savings, I’m hearing from businesses who are hanging on by a thread right now, and a key thing I’m hearing from Albertans is they can’t afford higher taxes.”
However, according to Green Party of Alberta Leader, Jordan Wilkie, the province “can’t afford not to [implement a UBI].”
According to a 2015 research study by Alexa Briggs and Celia Lee, poverty costs Alberta’s government and taxpayers approximately $7.1 billion to $9.5 billion per year. The bulk of this number comes from opportunity cost, which is the loss of potential earnings, and health care costs.
With the pandemic that steadily reduced Canada’s employment rate in 2020 still raging on, that price tag could be on the rise.
“[A $2,000 per month UBI] would be getting every Albertan above the poverty line. It’s saving us money. It’s pushing our society forward in an evolved way,” Wilkie says.
In this light, UBI looks like a no-brainer, but according to Terrazzano, there’s reason for skepticism.
The thought of the government of Alberta spending nearly $1 billion more per year than it already is, while “already steamrolling towards being $100 billion in debt,” according to Terrazzano, may not appeal to everyone.
While Wilkie says a UBI would ease the burden on taxpayers, Terrazzano disagrees.
“Trudeau just said a few months ago that he wasn’t going to increase costs or increase taxes, and what [did] we find out on [Dec. 11, 2020]? The carbon tax is more than doubling. I think Albertans have every right to be very skeptical of that claim,” he says.
Andrew Yang, an American entrepreneur and 2020 presidential candidate, was one of the biggest recent popularizers of UBI on the world stage. He calls it the Freedom Dividend.
According to Yang’s website, the Freedom Dividend would be a universal basic income of $1,000 per month, $12,000 per year, for every American adult over the age of 18. This is independent of one’s work status or any other factor.
This independence is important to note. Wilkie says it’s what separates a program like the CERB from a true UBI.
“It’s called the Canada Emergency Response Benefit. So highlight ‘emergency.’ The difference is that it’s conditional,” he says.
Wilkie says that since Canadians knew the CERB was temporary, they were more likely to save the payments than put them towards stimulating the economy.
The CERB, which ran from March 15 to Sept. 26, may have started to pave the way for UBI in Canada. British Columbia Sen. Yuen Pau Woo called for the federal government to transition from the CERB to a six-month UBI pilot.
According to a 2020 survey by Leger, the people of Alberta may have already warmed up to moving in a similar direction. About 70 per cent of Albertans are familiar with basic income, and about 60 per cent support the idea.
The survey suggests that UBI is simple and popular, but there are substantial roadblocks preventing it from becoming policy.
“People don’t know what it costs for us to keep people in poverty and that it would be cheaper to give out a UBI,” says Wilkie. “It sounds insane because when you hear it for the first time, your brain says you can’t give out money and have it be cheaper, but it just is.”
The 2020 Leger survey also found that only three in 10 Albertans describe themselves as knowledgeable about UBI.
The current government of Alberta, the United Conservative Party, has not only made no move to put one in place, but one of its members, Shane Getson, has gone out of his way to mock CERB recipients, suggesting they collect the payments while “eating Cheezies and watching cartoons.”
According to Wilkie, this way of thinking within the UCP is not limited to the CERB. He says they’ve pushed the rhetoric that UBI recipients would have much lower motivation to work and that Albertans need to push back.
“When people have their head above water, it allows them to actually be more motivated to work jobs that they care about,” he says.
Terrazzano says the pandemic makes now the “worst possible time” to risk raising taxes with a UBI “when workers are taking pay cuts, and when businesses aren’t sure whether they’ll be able to fully recover from this.”
On the other hand, proponents like Wilkie argue Alberta may be in as good of a position as ever to overcome these roadblocks because of the pandemic.
“Politicians now, because of the vulnerability [caused by] the COVID-19 situation, they’re in uncharted territory, and they’re looking around for a life raft. UBI is something that they found. And it’s something that’s not going away from the general consciousness.”