Bill S-233 Will not Fix Poverty

This Spring session of Parliament will likely see Bill S-233 pass the Senate and be tabled for debate in the House of Commons.

Senate Bill S-233 calls for the “development of a national framework for a guaranteed livable basic income” (GBI).

There are two approaches to basic income.

Guaranteed livable basic income (GBI) is the system most people refer to when discussing “basic income.” This benefit would be bracketed to income, with monthly payments only going to families and individuals with lower incomes. This is different from Universal Basic Income (UBI) where everyone in a society—rich or poor—gets a monthly cheque for the same amount—It should be noted under this model, the government uses the tax system to “balance out the scales” and recoup UBI money from higher income earners.  Both schemes are forms of wealth re-distribution. Wealth distribution is a key component of socialism, and history has shown that socialism always fails.

I have already heard from many constituents on this issue. Some (those in favour) believe this legislation is essential to help folks climb out of poverty and the financial straits caused by the past few years. Others (those opposed) believe it is another step closer to tyranny and total government control over folks’ wallets and lives.

To those who are proponents of this bill, please be assured I recognize how much folks are struggling with the cost of living. I agree we need to help folks deal with the effects of the disastrous government policies. Conservatives believe that Canadian families should be able to earn a livable wage and to do that, we need to get spending under control and tackle the record inflation that is creating a cost-of-living crisis in our middle and lower-class families.  We need to foster an environment where jobs are supported and created that provide that livable wage.  However, I do not believe that Bill S-233 would have the desired effect—quite the opposite, in fact.

First, this bill would not establish a national guaranteed livable income. It simply says the government should explore it. In short, this Bill is similar to a motion, providing guidance for the government. It’s the legislative equivalent of saying, “Hey, we should consider doing this,” or, more accurately, “if we were to do this, we should figure out what it would look like”. 

Second, it’s redundant as multiple studies similar to what is being proposed in the legislation have already been undertaken.

Third, the widely varying results of those studies prove that nobody actually knows what such a program would cost. What we do know is it would be astronomical. In short, GBI would cost so much to implement that it would likely only serve to drive inflation and costs even higher.

The Parliamentary Budget Officer produced an analysis in 2021 that concluded a national guaranteed basic income (using parameters of Ontario’s 2017 pilot project) would be at a hefty cost of $91 billion in 2024–25 and $93 billion in 2025–26—likely with similar annual costs moving forward. That’s nearly double what Ottawa spends on health transfers to the provinces.

If we were to use the Canada Emergency Response Benefit (CERB) at $2,000 per month as our model (which some have proposed), the Fraser Institute study reveals that the annual cost would be even higher in the neighbourhood of $465 billion. To put that in perspective, the entire 2019/20 federal budget was $362.9 billion. This single program would exceed the entire budget of Canada by nearly $100 billion–every year. Moreover, as we saw from CERB, this kind of program hurts the economy by providing a clear disincentive to work. 

It’s just not realistic.

Kevin Milligan, an economics professor at the University of British Columbia specializing in government social spending, says the chances of a guaranteed income becoming actual policy are “very close to zero.”  “No government could afford it. Any wise government would see that this is not a good way to work on the important issues of poverty.”

Politically, while the NDP and Greens are very much in favour of this policy, the Liberals and Bloc are split on this issue. Conservatives are opposed. Wherever the other parties come down on this issue, if it comes to a vote, I will be voting against it.

Conservatives will continue to be the voice of Canadians looking for relief from the cost-of-living crisis and remain committed to reducing inflation and leaving more money in Canadians’ pockets.

Bill S-233 will do the opposite.