During the COVID-19 pandemic, the federal government introduced the Canada Emergency Response Benefit (CERB) to help people who had their work hours reduced or forced to stop working. There’s no denying that CERB helped some people pay their bills when the government wouldn’t let them work for fear of spreading a bad flu..But, there’s been talk of making some sort of permanent CERB, normally referred to as a Universal Basic Income (UBI). UBI provides a minimum income to all citizens with the purpose of providing people money to keep a roof over their heads and food in the refrigerator. .While a great idea with supporters on both the left and the right. It just isn’t feasible. Supporters across the political spectrum can’t agree with how a UBI could work..On the left, UBI supporters want the current social programs to stay in place and add UBI into the mix, which is financially impossible without a massive increase in income taxes..On the right, UBI supporters want most or all social programs gone and replaced by just a UBI. Prominent conservative politicians and pundits such as David Frum, Paul Ryan, Marco Rubio, and Mike Lee all support a UBI by replacing all existing social programs..Utah Senator Lee told the Heritage Foundation in a speech that “there’s no reason the federal government should maintain 79 different means-tested programs.”.We have to talk about the financial result of CERB, Canada’s debt more than doubled during the pandemic. Most of the new debt came from CERB and several programs to help businesses pay their employees, which was a sort of CERB for employers..Even supporters on the left admit that a UBI cannot be added to the existing social services without bankrupting the country..“No existing economy can pay for a generous basic income without defunding everything else. We would either have to settle for the minimalist version whose effects would be highly suspect or we’d have to eliminate all other social expenditures, in effect creating Milton Friedman’s paradise. Faced with these facts, we should question UBI’s rationality,” said Daniel Zamora Vargas, University Libre de Bruxelles sociology professor..Two-thirds of adult Canadians accessed one of the pandemic relief programs, either through CERB or indirectly through their employer. Many people on social assistance switched to CERB because it was a higher monthly amount..In the pandemic, low-income earners decreased because CERB was above the poverty line. Statistics Canada credits CERB for the low-income earners dropping from 14.4% in 2015 to 11.1% in 2020..The purpose of CERB was not to lift people out of poverty but to be an income support program for people when the government forced them to stay home instead of working..Some people abused CERB as the government didn’t do thorough checks before sending out the money. Now, it is trying to collect the money back from people who shouldn’t have received it..How would a UBI work? There are three main options that supporters advocate for with drastically different costs and two different starting ages, either 18 or 21..The most expensive version is sending everyone the same amount of money. This version pays everyone regardless of income, so Jeff Bezos would receive money. Though I doubt he would notice..The middle-of-the-road version uses a 50% clawback. Once a person hits a certain income amount, they would have a 50% reduction in their UBI. For example, let’s say that the UBI is $20,000 per year and someone makes $30,000. Since they made $10,000 more than the UBI amount, a 50% clawback would be $5,000. They would make a combined income of $45,000 ($30,000 + $15,000)..The cheapest version uses a 100% clawback. Once a person hits a certain income amount, they would have a dollar-for-dollar reduction in their UBI. For example, let’s say that the UBI is $20,000 per year and someone makes $30,000. Since they made $10,000 more than the UBI amount, the clawback would be $10,000. They would make a combined income of $40,000 ($30,000 + $10,000)..For the middle-of-the-road and cheapest UBI versions, top-income earners would receive no money..There’s also the question of when it would start. Some 18-year-olds are still in high school and others have graduated or dropped out. If an 18-year-old is still in high school and sees his friend who dropped out getting UBI, would more kids take the easy route and drop out of school?.What about college and university students? Do you have to finish school before receiving the UBI or can it be used to help fund students? If the UBI is high enough, do student grant and loan programs disappear? .What about seniors? Do we eliminate existing programs such as CPP that they paid into and switch to UBI? .To institute a UBI, a major overhaul of the financial system would be required, with no guarantee things could change for the better. A UBI is almost a capitalist version of communism. Some of the biggest UBI supporters admit to being socialists and communists. Bernie Sanders, a self-described democratic socialist, campaigned on a UBI if he became the American president. .Right now, UBI is purely theoretical and what CERB taught us is a permanent UBI wouldn’t work without bankrupting the country..“An affordable UBI is inadequate, and an adequate UBI is unaffordable,” said Luke Martinelli, University of Bath economics professor.
