Rob Shaw: A new report details in excruciating detail why the idea of Universal Basic Income is a non-starter for the foreseeable future.
A panel of academics hired by government to report on the feasibility of a Universal Basic Income returned its report last week with the title: “Covering All the Basics, Reforms for a More Just Society.
But given its contents, it might as well have been called: “Dead On Arrival: The Universal Basic Story.” Because there’s no way this idea is going anywhere anymore.
First, kudos to the three academics, who surprised everyone with a report that recommended against the idea they were hired to investigate. Usually, government-commissioned reports skip the part about whether an idea has merit, and move on to advocate for funding to implement it.
“A basic income would not be the panacea that some advocates believe, with many of the claims about the social issues that a basic income would address unlikely to be true in practice — or at least, it is unclear that a basic income would be the best way to address the issues, if justice is the objective,” the authors wrote.
And then the kicker: A $20,000 universal basic income for all B.C. residents aged 18 to 64 would cost the treasury $51 billion annually. Or put another way, we’d need to double the provincial budget.
What would this accomplish? For every $1 billion spent, we could lift 8,000 people out of poverty.
The amounts are so high, and implementation so preposterous, that the authors rightly move on to examine different approaches, including a refundable tax credit system based on a person’s income.
That’s slightly more economical, costing $7.8 billion, reducing the poverty rate by 68 per cent and lifting 44,000 people out of poverty for every $1 billion spent, the authors write.
But the cost remains prohibitive.
B.C. would need to raise income taxes 50 per cent to fund the cheapest model of the refundable tax credit basic income, “creating economic distortions” in its wake, according to the report.
At this point, basic income advocates often point to the savings that would be found elsewhere in the system by eliminating existing social service supports no longer needed once we lift the most vulnerable out of poverty.
Not so, say the authors.
Those social programs are “essential to a just society,” they write.
“We conclude that there is little or no scope to fund a basic income by eliminating some of these programs without doing significant harm.
“We are concerned that, even if basic services and targeted cash transfers are not eliminated to finance a basic income, the budget pressures imposed by the basic income would preclude needed reforms to these programs and result in erosion of the programs over time.”
So the authors pivot again, this time to devise a comprehensive overhaul of B.C.’s existing social safety net, including targeted income for those with disabilities, youth aging out of care and women feeling violence.
“We conclude that there is little or no scope to fund a basic income by eliminating some of these programs without doing significant harm.”
That plan would cost $3.3-$5 billion, “a substantial portion of which could be offset by eliminating the home owner grant” to save $800 million.
I admire the authors’ audaciousness in tossing the annual homeowner grant out the window – an outdated, nonsensical bit of policy that even an NDP-heavy task force reviewing tax policy in 2018 recommended scrapping because it isn’t progressive or fair.
The homeowner grant eats up an enormous amount of money each year just to give people in Greater Vancouver and Greater Victoria a $570 cut to their property taxes ($770 elsewhere in the province).
It does nothing to help housing affordability. But clawing it back from the public would be a knock-down-drag-em-out fight that no government has wanted to tackle since the 1950s.
If the NDP government ever developed the courage to eliminate the homeowner grant, it would undoubtedly use that money for another populist housing affordability program, if only to dampen the outrage.
With that off the table, the basic income report devolves into 65 recommendations that outline very specific changes to B.C.’s social assistance, labour regulations, financial policy and disability programs.
The government may cherry-pick a few of these and use the report as cover to justify the costs. But, the likelihood the entire suite is adopted in the complexity and interconnectivity the authors are advocating for is almost nil.
The NDP was never particularly enthused with the idea of universal basic income. Previous Social Development minister Shane Simpson dumped cold water on it more than once when I interviewed him over the NDP’s first term.
But, the B.C. Greens wanted the study, and held the balance of power at the time, so the NDP agreed.
The NDP was never particularly enthused with the idea of universal basic income.
October’s provincial election gave the NDP a majority government, without the need to cater to the Greens anymore. That’s another nail in the coffin of universal basic income.
“We are now reviewing the recommendations closely as we build an economic recovery that supports all British Columbians,” Social Development Minister Nicholas Simons said in a tepid response to the report.
Translation: We’re going to stuff this report into a drawer (a big drawer; it’s 500-pages) and rarely speak of it again.
All of which is a shame, in a sense.
The public has never been more primed to support the idea of a basic income, with many middle-class British Columbians having drawn upon the federal government’s $2,000 monthly Canada Emergency Response Benefit.
Advocates of a universal basic income view the report as a betrayal of the cause.
The CERB provided ordinary folks with a real-life example of how government backstops income when people are in trouble. If anything, it gave the middle-class the closest view of our social safety net it has ever experienced.
At the same time, it’s painfully clear our social development and disability rates are too low. As housing prices and rent continue to skyrocket, the gap between the haves and have-nots grows daily. The province is spending billions annually on a social safety net that, paradoxically, keeps people in poverty rather than raising them out of it.
Advocates of a universal basic income view the report as a betrayal of the cause. Online, they’ve started a petition urging the government to keep pushing the idea, and dismissing the report’s findings as flawed.
That’s a hard case to make. The authors commissioned more than 40 research projects to gather the data necessary to produce its final report. It is beyond comprehensive.
All of which leads to the inescapable conclusion: The universal basic income idea is dead.
RIP Basic Income. We hardly knew ye.
Rob Shaw has spent more than 13 years covering BC politics, now reporting for CHEK News and writing for The Orca. He is the co-author of the national best-selling book A Matter of Confidence, and a regular guest on CBC Radio.
- Rob Shaw last wondered how government could fail at giving away free money – in a crisis, no less – but here we are.
- Roslyn Kunin had a sunnier view on the war on poverty – namely, that we’re winning it.
- In July, Jody Vance wondered if it wasn’t time to adjust the CERB, to encourage more economic activity and get people back to work.