Canada Revenue Agency has earned everyone’s respect by successfully enrolling millions of suddenly unemployed workers in the Canada emergency response benefit in a matter of days. But what if CERB itself is a mistake?
As the Trudeau government scrambles to include one forgotten group after another in the wage-support program, the argument for shifting to a universal basic income grows more compelling.
Ken Boessenkool was an adviser to former Reform leader Preston Manning, former Canadian Alliance leader Stockwell Day and former federal Conservative leader Stephen Harper. He is pretty darn conservative.
But Mr. Boessenkool has been advocating for what he calls a “crisis basic income” to fight the economic downturn created by the COVID-19 pandemic. Under CBI, Ottawa would send a direct deposit or cheque to everyone who filed a tax return, clawing the money back from those who don’t need it through next year’s taxes.
“For two or three months, blanketing the country with money makes sense,” he said in an interview.
For most Canadians, COVID-19 is an economic crisis as well as a health crisis. Only a small percentage of Canadians have become ill or know someone who has. But the brutal unemployment numbers remind us that the country faces its worst recession since the Great Depression.
CERB was designed to provide income support for people who lost their job because of the national quasi-quarantine. But as Prime Minister Justin Trudeau acknowledged during his briefing Wednesday, many contract workers, part-time workers, students and seniors in need don’t qualify for the program.
“We are currently looking for solutions and we will help you,” he assured them, as he announced new supports to create summer (or maybe fall) jobs for students.
But he sidestepped repeated questions from Althia Raj of Huffington Post as to why the government hadn’t opted for a guaranteed basic income instead of a program that is constantly in need of fixes.
Mr. Boessenkool believes that the government’s preference for CERB over CBI stems from the mindset of bureaucrats in the Finance Department, who prefer to meet an economic challenge with a targeted solution, and to then tinker with that solution as problems crop up, rather than to adopt universal measures.
Mr. Boessenkool has an unlikely ally in the NDP (or maybe it’s the other way around), which is also calling for a guaranteed basic income to fight the recession.
“Everybody is hit by the COVID-19 crisis,” NDP finance critic Peter Julian said. “Let’s just get money out to people like other countries are doing, to make sure everyone is taken care of.”
CBI has its critics. University of British Columbia economist Kevin Milligan (whom I quoted in my last column) thinks that while blanket income guarantees are easy to roll out, it wouldn’t be easy to retrieve the money from people who didn’t need it in the first place.
“The ‘send cheques to everyone and we’ll claw it back later’ folks are very skimpy on the details,” he said in a series of tweets Tuesday.
Mr. Boessenkool agrees his proposal would probably overshoot by sending money to those who don’t need it. But better to overshoot than undershoot, he believes. And if this crisis does drag on, CBI would provide breathing room while Ottawa works on a more targeted substitute.
Another concern is the possibility that a temporary universal basic income could become a permanent universal basic income.
“If the real agenda is to create a permanent new entitlement, how would we pay for it?” Conservative finance critic Pierre Poilievre asked me Wednesday in an exchange on Twitter.
As a result of this crisis, the debate over a guaranteed basic income could become a major issue in the next election, with Conservatives opposed, the NDP in support and Liberals firmly committed to further study.
In any case, as more and more of the unemployed, partly unemployed and hard-to-say-if-they’re-unemployed qualify for CERB, even as Ottawa offers more generous wage supports in the private sector, leaving the public sector as the last place where people have steady work, government may end up paying just about everybody, one way or another.
What would that mean for the economy and society? Who knows? We’re all making this up as we go.
Sign up for the Coronavirus Update newsletter to read the day’s essential coronavirus news, features and explainers written by Globe reporters.