Free money? Canada's Senate is considering Universal Basic Income

For most, getting free cash from the government is nothing more than a utopian dream… but the idea is slowly making its way through Parliament.

Driving the news: Per VICE, yesterday, the Senate’s national finance committee studied a bill that would create a framework for universal basic income (UBI) in Canada. An identical Member of Parliament-sponsored bill is also making its way through the House of Commons.

• The bill, if passed by the Senate and House of Commons, wouldn’t implement UBI but require leaders to come together and figure out how the whole thing would work.
• While UBI provides income for all, what the government is discussing here is guaranteed basic income, where payments would only go to low-income individuals.

Catch-up: Some saw the federal government’s $82 billion Canada Emergency Response Benefit (CERB) — which paid out $2,000 a month to millions of Canadians during the pandemic — as a test for an eventual UBI scheme that could lift Canadians out of poverty.

• The most recent basic income scheme was in Hamilton, Ontario, in 2017, which was successful (though it’s pretttty obvious the response to “more money” is positive).
• Canada’s Parliamentary Budget Officer found that a program similar to Hamilton’s would cut poverty rates by almost half, but would cost about $85 billion a year.

Bottom line: If the cost of living keeps rising and the adoption of AI starts to impact jobs, you might start hearing more about UBI in the coming years. Countries worldwide are experimenting with the model, but none have yet dared to try to justify the price tag.

Get smarter about what matters. Sign up for The Peak, a free five-minute daily email on Canadian business, tech, and finance that you’ll actually enjoy reading.