An article that has gone viral on Chinese social media states that the Ontario government plans to roll out a basic income program that sends out a $1000 cheque to all residents, regardless of their income level. The program, which intends to attract Liberal supporters from residents, immigrants and refugees, is likely to be implemented prior to the next election.
A free handout to everyone without strings attached is extremely appealing. The story has stirred great media hype, leaving many WeChat readers thrilled. Indeed, basic income represents the perfect Liberal ideology. It offers genuine social security to everyone, and ensures that no one falls below a minimum standard of living. It gives residents more freedom, allowing them to pursue their life dreams and career choices. It protects people from rising insecurity in today’s precarious labour market, avoids the dark side of the emerging “gig” economy, and helps rebuild our crumbling welfare state.
But basic income, the idea of which goes by various labels – guaranteed annual income, basic minimum income, negative income tax, is an old idea that has been under heated discussions over the past. Finland recently announced plans to study a basic income scheme. Proposals are also under discussion in the Netherlands and Switzerland. And Ontario budget has proposed a plan for a basic income pilot project.
But despite various debates and pilot projects, there is little progress made in implementing the program. According to the analysis by the Globe and Mail, the program costs are astonishingly high in Canada. A transfer of $1200 a month would cost $500 billion a year from the public purse. By canceling existing social assistance, child benefits, employment insurance and Old Age Security would only add about $100 billion in savings, leaving $400 billion short. Given federal revenue of $300 billion a year, we need more than our current taxes to pay for it. Under the Canadian political system, a program costing in the hundreds of billions is simply a non-starter.
As for the pilot project in Ontario, the savings for the program relies on massive cut of numerous social programs and the removal of huge swaths of social safety net, which, needless to say, would lead to massive job cuts in the public sector.
Someone who makes $60K/year + benefits wouldn’t be happy to receive $20k/year + no benefits. If Tim Hudak’s campaign promise of slashing 100,000 public sector jobs led to his demise, brace for major pushbacks from the Ontario public sector unions who would fight tooth and nails to nib the program in the butt.
If not designed properly, it could undermine efforts to achieve more social justice, and this seemingly appealing program could backfire. A Toronto Star editorial argues that the program could turn out to be an alluring trap.
In fact, this basic income program is still in its infancy, and a pilot project is nowhere near the final implementation. As always, sophisticated readers won’t fall for the media hype.
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