Basic Income For Canadians Would Cost Ottawa $98 Billion: PBO Report


Providing almost all Canadians with a basic income for six months beginning this fall would cost the federal government an additional $98 billion, according to a new report by the Parliamentary Budget Officer (PBO).

Ottawa’s planned federal spending to date on pandemic-related aid now tops $174 billion.

The idea of giving a government-guaranteed basic income to Canadians has gained steam as policymakers consider how to shape emergency supports set to expire in the fall.

Finance Minister Bill Morneau and other senior cabinet ministers have repeatedly been asked by senators and Members of Parliament about a basic income. Advocates argue that it would be an expansion of the $80-billion Canada Emergency Response Benefit (CERB) for workers who saw their incomes evaporate.

The CERB and a $45-billion wage subsidy program are set to expire this October. Replacing CERB with six months of a basic income could cost between $47.5 billion and $98 billion, depending on how much of the benefit is clawed back from people whose other incomes increase.

Budget officer Yves Giroux's report says the average benefit to Canadians aged 18 to 64 would range between $4,500 and $4,800. A basic income would be a no-strings-attached benefit that governments provide to citizens instead of various social benefits. Also known as a guaranteed minimum income, it can be delivered as a universal payment, or as a means-tested benefit that declines as a recipient's other income rises.

The overall cost of the program might be higher than the budget office estimates. The Parliamentary Budget Officer's estimates rely on some Statistics Canada data that doesn't include people living in the northern territories or military members.

Finance Minister Bill Morneau will provide an economic update on Wednesday that includes an accounting of spending to date and projections for the remainder of the fiscal year, including a forecast on the federal deficit. The Parliamentary Budget Officer estimates the federal deficit to be at least $250 billion.