Parliamentary budget officer: UBI could halve poverty

Parliamentary budget officer Yves Giroux claims that implementing a universal basic income (UBI) in Canada could cut the nation's poverty rate in half by 2022, CTV News reports.

UBI is a policy which would provide a monthly cheque to all Canadian households offering a certain amount of money. Unlike traditional social security programs, which prioritize the poor, UBI would be distributed to everyone regardless of income, no strings attached.

While UBI has been floated around by economists for decades, the concept gained unprecedented attention after entrepreneur Andrew Yang ran for the American Democratic Party's presidential nomination in 2015, in which he promised UBI as the centrepiece of his platform.

The effects of such a program would not be even across Canada, however. According to Giroux, Manitobans would experience the greatest benefit from such a program, with a poverty rate reduction of over 60 percent. In contrast, Newfoundland and Labrador would likely only see a poverty rate reduction of 13.5 percent with a UBI.

The report found that workers across the country would likely reduce their hours worked by 1.3 percent.

The report also noted the high potential cost of such a program, totalling over $85 billion in its first year, a number which would rise to $95 billion by 2026.

Proponents of UBI have argued that it is a preferable alternative to traditional welfare programs as it removes much of the bureaucracy involved in determining and distributing welfare payments, although replacing rather than adding to current social security programs is controversial among UBI proponents. Many have suggested that such programs will become increasingly necessary as automation threatens to displace large sectors of the workforce.

Opponents of UBI have criticized such a program as too expensive. Many have highlighted the perceived inefficiency of distributing social security payments to those who do not need it. The threat of automation causing mass unemployment has also been called into question.

Similar programs to UBI exist in some jurisdictions around the world such as Alaska, where local residents are given a yearly stipend using wealth generated by the state's vast oil resources.