Making a case for basic income

Guaranteed monthly sum could provide economic stability during times of crisis

Nearly half of working Canadians are now unemployed or underemployed due to COVID-19.

For the self-employed in Canada’s gig economy, government relief programs with rigid barriers are forcing some tough choices.

A childcare provider in Arnprior, Ont., agonized over reopening her shuttered home business to take in the children of emergency workers on the front line, at the risk of exposing her family to the virus. In just three days, a Toronto makeup artist saw clients cancel appointments for the rest of the year. Both face a gut-wrenching choice. If the daycare provider takes in one or two children, or if the makeup artist books a few new jobs, the resulting income still won’t be enough to live on.

It will, however, put them at risk of disqualification from the Canadian Emergency Relief Benefit (CERB), the federal aid package intended to shore up lost income during the pandemic.

Working in international development, I have always believed that a hand up is better than a handout.

I was skeptical of politicians like former U.S. Democratic candidate Andrew Yang and his plan to deliver monthly cheques to Americans.

Then the COVID-19 pandemic changed everything.

After revelations that CERB would exclude more than 800,000 struggling workers, as I write this, the government is promising a third attempt to get income support to even more Canadians financially affected by COVID-19.

I am increasingly swayed by arguments that, instead of multiple emergency initiatives, the best solution would be one universal basic income program that gives every affected Canadian a direct payment.

In addition to helping people now, it would act as a live experiment. We can test the potential to keep basic income in the long term to address issues in our evolving workplace.

Before this crisis, an estimated 1.7 million Canadians were working in the gig economy — freelancers, Uber drivers and others on short-term contracts.

Many more are self-employed entrepreneurs.

Trend watchers like Deloitte believe this haphazard work is the future of our post-industrial economy. Yet our social safety nets are still geared for the industrial age.

Even before the pandemic, gig workers lived in economic uncertainty, often just one cancelled contract or lost client away from financial disaster.

Employment insurance was designed for 9-to-5 workers who are laid off, not for those with frequent gaps between jobs. Universal basic income is a guaranteed monthly sum, enough to cover costs of living, ease stress and improve mental health.

It provides economic stability to smooth out the bumps inherent in a gig economy and allows low-wage earners to stop living hand-to-mouth.

It may seem like a utopian ideal, but it’s not new to Canada in practice. An Ontario trial launched in 2017 was cancelled after just one year due to a change in government.

However, 40 years ago, a fiveyear experiment was conducted in Manitoba. The results from the Mincome Project were never fully analyzed, but small-scale reviews found that, with financial stresses reduced, health in participating communities increased significantly compared to other towns. And contrary to a common criticism, there wasn’t a significant upswing in people refusing to work.

Universal basic income could be the hand up that helps Canadians through this crisis and supports vulnerable workers during the next economic evolution.