Is a Universal Basic Income an unintended consequence of COVID-19?

Rivers 100x100By Ray Rivers

March 27th, 2020



Cofins in Italy

This is what it has come to in Italy – and what we are probably going to see in New York city where the infection numbers are now higher than Italy.

There is no cure and there is no vaccine to prevent COVID-19. The best we can do is prevent human-to-human contact. It is a respiratory system disease much like the SARS epidemic we faced only a few years ago – but more contagious. And the only way we know to prevent its spread is to shut down the workplaces, shops and entertainment facilities and send everybody home.

No work, no income and that, for many of us, means no way to pay for food and rent. In fact a million Canadians have so far applied for employment insurance. So the federal government has responded with an emergency rescue package, the centre piece of which is a basic income of $2000 a month for those who apply.

That emergency package only runs for the next four months. The government had wanted to be given emergency taxation and spending power to extend the package, until the end of 2021. But the opposition called that a bridge too far. So Parliament will need to be recalled by this summer if an extension is required.

It is uncertain how long this epidemic will last but it’ll likely be beyond the summer and maybe up to a year. Chinese authorities are confidently sending Wuhan, where the virus started, back to business in early April. That will be about four months after the outbreak was first made public.

Street emplty - barren

Streets in Chinese city were emptied. No one was allowed out.

That sounds ambitious but then Wuhan’s lockdown was more complete and earlier than what is going on in the rest of the world. And the economic damage is substantial – estimates of 20% declines in retail. But even if all is well with the recovery, the export orders will be absent from the rest of the globe in its own lockdown.

It remains to be seen if the Wuhan virus will return, and with a vengeance. Even if Canada’s social distancing helps flatten the curve we are unlikely to be safe until those folks on the other side of the longest undefended border get their act together. For example, the recent alarming jump in Quebec’s virus numbers has been partly been attributed to travel – likely snowbirds returning from Florida.

Canada’s border is only partially shut down now and this virus is a persistent bug, so we will never be virus free as long as the US isn’t. The US is a basket case. Delayed and inadequate testing; a fractured health care system, short on public health; and an incompetent president in denial and determined to reopen the economy regardless how bad this gets, all work against an early recovery.

So given this scenario, the question is why the Trudeau government didn’t annualize the $2000 basic income provision, extending it to at least the end of the 2020. In fact why not just announce a permanent universal basic income.

UBI support

Public sentiment favours the idea of a Universal Basic Income – have we taken that first step in Canada?

The idea of universal basic income (UBI), also called a guaranteed annual income, has been around for ages and has been supported by economists and politicians on both sides of the political right/left divide. It is a natural cousin to our system of single payer health care and other social programs. Only corporate and political leaders, ignorant of facts, yet fretting that wages might have to increase, have kept UBI from becoming policy.

UBI involves a lot of cash outflow, but it can replace the costs of many lesser programs and it could, of course, be made taxable income. Employment insurance, welfare, and a host of other supplementary social income programs could be eliminated. Indeed, the efficiency of sending everyone one cheque a month instead of a couple must appeal to anyone who dislikes the breadth of our bureaucracy.

That partly explains why right-wing economist Milton Friedman was an early advocate. Progressive Conservative strategist Hugh Segal who designed Ontario’s now cancelled UBI pilot project was another. Former democratic presidential candidate Andrew Yang had been offering Americans $1000 a month as his main campaign plank. And UBI also is nested the various versions of a Green New Deal.

UBI poster lady

The province had a UBI program – it was a pilot in three city’s – Hamilton was one. Doug Ford cancelled it.

Mr. Ford axed Ontario’s pilot UBI before it could demonstrate results, though early indications were positive on all fronts – consistent with other pilot experiments elsewhere. But then this is the premier whose first reaction to the COVID-19 pandemic was to front up $100 million dollars in emergency funding- roughly seven dollars per person.

The main thing about UBI is that, like a security blanket, it reduces uncertainty among families, and individuals, and small business owners – about keeping food on the table and a roof overhead. That is an essential piece of solace in times of crisis, and we are in the worst crisis in our lifetimes.

It is said that we should never let a good crisis go to waste. And that is exactly what will happen if we don’t act on this opportunity for a national and permanent UBI.

Rivers hand to faceRay Rivers writes regularly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was once a candidate for provincial office in Burlington.  He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject.   Ray has a post graduate degree in economics that he earned at the University of Ottawa.  Tweet @rayzrivers



Background links:


Yang’s UBI –     70’s GAI –   Romney $1000

Canada’s GAi –    Ontario UBI –    Federal Power

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4 comments to Is a Universal Basic Income an unintended consequence of COVID-19?

  • Steve

    As a prominent left wing progressive once said: never let a serious crisis go to waste.

  • Stephen White

    A guaranteed annual income makes a lot of sense. The late Senator David Croll, and former Senator Hugh Segal, have long championed the notion of a guaranteed annual income. So too did former Manitoba NDP Premier Ed Schreyer who actually piloted a program called “Mincome” in Dauphin in 1974. Brian Jones has also noted recent pilot projects here in Ontario that were stupidly cut by Doug Ford for no justifiable reason.

    The dizzying and confusing array of supplements, credits, allowances, etc. requires a legion of public servants to administer and is hopelessly confusing and archaic. Simplicity should be the goal, and if a guaranteed income can provide direct financial benefit and alleviate red tape then it is deserving of more than lip service by politicians.

  • James Thomson

    Wuhan Virus?
    Don’t do you mean SARS-Cov2?
    Our PM said we weren’t to blame this on China.

  • Brian Jones

    There was a provincial trial during Liberal power. Part in Hamilton and Peterborough I believe. Cancelled by Ford but the organization is much alive and this just might push the need