If only it were that simple. A core element of the federal government’s response to the COVID-19 pandemic is the Canada Emergency Response Benefit (CERB). It provides a uniform monthly benefit of $2,000 a month to those who have lost significant employment income due to the lockdown. The popularity of the CERB has resulted in many using it as the basis for a broader income support program and advocate for it to be made permanent and available more universally.
In other words, there’s a move for making the CERB into a basic income. This is happening in part because of a growing sense of social solidarity during the pandemic as we increasingly act on behalf of others in need, whether that be wearing masks in public, shopping for those who have fallen ill, or banging pots and pans in support of our front-line health care workers.
However, in the current vigorous debate, it is our view, as a panel of appointed experts assessing the feasibility of a basic income for British Columbia, that crucial considerations are being swept aside as commentators on both sides of the debate present a complex policy issue in overly simplistic terms. The CERB itself is a case in point since it has been depicted by some proponents as a form of basic income. It is nothing of the sort: CERB is conditional on earnings and it is designed for a limited time period. When the government established CERB, it did not discuss the complex financing issues that are part and parcel of basic income.
A basic income raises many complex policy issues. Despite the basic income concept having a long history, we found over the course of our two-year study, that is still underway and to be completed by the end of 2020, that there are no definitive answers to most of the complex questions that need to be addressed.
Since many of the same considerations apply to any basic income proposal, whether implemented across Canada or in a single province, here are some considerations that should be addressed in deciding whether and how to implement a basic income or any alternative social support policy.
Designing and implementing a basic income is not simple. First and foremost, a basic income is not just another cash transfer program. A basic income has very specific guiding principles and is intended to achieve very particular objectives, which themselves need to be determined.
These need to be carefully considered throughout the design and implementation process in order to avoid recreating the elements of injustice, stigma and complexity that afflict parts of our current income support system.
Second, a basic income is also not a single, uniform policy, but rather a range of policy proposals with multiple design details that need to be selected and reconciled with its principles and objectives. Unless one is advocating elimination of all existing systems, it is also essential to consider how the basic income interacts with the existing system, what parts of the system would remain, and how people would respond to the system both in part and in its entirety.
A prime example of this is how our income and social support system treats persons with disabilities. How would a basic income provide members of this group with the additional resources they need to have a decent standard of living, which includes access to not just cash but also to publicly provided services, like health care? A basic income program is intended to be administered remotely and to minimize personal contact with beneficiaries.
Third, many basic income advocates prefer a basic income that provides a guaranteed level of income that is reduced concurrently as additional income is earned. This is the form used in the famous experiment in Manitoba in the 1970s and differs in important ways from the approach advocated by presidential candidate Andrew Yang in the US in which a cheque is sent to every household.
Another form of a basic income is a refundable tax credit that is delivered through the tax system (like the Canada Child Benefit). Unlike the Manitoba experiment, where benefits were assessed and paid monthly, this third form is based on annual tax filings and benefits are decreased retrospectively rather than concurrently. All three of these basic income forms differ in their implications for policy design as well as who they impact and when those impacts are felt.
The basic income that is the form of a refundable tax credit referred to above is the one most commonly proposed in recent debates in Canada, but such a design poses another set of logistical problems. In particular, every year upwards of 16 per cent of people do not file taxes, with a disproportionate number of them being vulnerable Canadians. How would we ensure that vulnerable persons get the basic income benefit?
Currently our tax system only collects information once a year. How would a basic income adjust for changes to income that occur at other times during the year? Our tax system is based on the individual yet many proposals for a basic income treat the household as the beneficiary unit. How would a basic income ensure everyone is treated fairly without introducing stigma into the definition of the beneficiary unit?
These are just a few of the many considerations that are confronting our panel. Some people will view the very act of citing these complexities as taking a stance against basic income. That is certainly not our intention.
Rather, taking a basic income seriously as an option means having a significant debate about how one would really implement it and the likely consequences. Straightforward claims about the simplicity of a basic income on one side and oversimplified characterizations of what basic income proponents are setting out on the other side accomplish nothing. Our goal should be to build on what has been both achieved and revealed in this crisis to create a more just society.
This article is part of the The Coronavirus Pandemic: Canada’s Response special feature.