What is the Universal Basic Income in Canada?

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There’s no doubt about it – in Canada, we are blessed. We have an abundance of food, unlimited access to clean water, and we live in a society where multiculturalism isn’t only welcomed, but celebrated.

But despite the fact that we are one of the most thriving countries in the world, we still see great inequalities in wealth and sadly, we still see people living on the streets and doing whatever it takes to find their next meal. But what if we could change all that?

Introducing Universal Basic Income

Universal Basic Income, referred to as “UBI” for short, is an idea that has been proposed by the Canadian Government to ensure that all households have the economic needs to support a basic standard of living.

In the eyes of those who support Universal Basic Income, all individuals in Canada should have enough money to provide food, clothing, shelter, and transportation regardless of whether or not they are employed.

The idea of a Universal Basic Income has been around for decades, but it was the outbreak of the Covid-19 pandemic that really brought the idea back into light.

As the pandemic rolled out, many workers lost their regular source of income and some lost their employment altogether. In order to assist, the Candian government initiated the Canada Emergency Response Benefit (CERB), which provided eligible Canadians with $2000 per month for up to 7 months.

How does Universal Basic Income Work?

The Canadian Government is currently considering two different models of Universal Basic Income.

  1. The first model, referred to as the “Universal model”, would ensure that every individual in Canada received a basic income amount from the government, regardless of their employment status. In other words, whether you earned $500, 000 per year, or held no employment whatsoever, you would receive a basic income from the government. Those who had higher sources of income would then be taxed at the end of the year to make up for the payment amount.
  2. The second model, referred to as the “Guaranteed model,” would take income into account when distributing UBI. In other words, if you earned a generous income, you would not receive any UBI. If you had no incoming income, you would receive the highest amount of UBI. The Universal Basic Income amount you received from the government would largely be dependent on how much you made in a year.

Source: Basic Income Canada

Arguments for and Against Universal Basic Income

Like anything else in this world, there are those who support UBI and those who are strongly against it.

Those who support it believe that it would improve the economy by aiding in individual health, allowing for more dedication to family care in the home, decreasing violence, and empowering underprivileged community members.

Those against it fear that it may be a disincentive for employment and others fear that it will raise taxes. 

Of course, until it is actually implemented, we will never know what the exact outcomes will be. But Universal Basic Income is a real possibility in Canada’s future. Which side do you stand on?

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Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.

Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.