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How could a Guaranteed Basic Income solve four problems in Canada, and what four problems might they be?
It’s a good question which can only be answered in the context of how these four things are being handled/not handled now.
So let’s see how a Guaranteed Basic Income could help Canada to care for people (including seniors, economic migrants to Canada, and refugees living in Canada) more efficiently than the present multilayered system.
Before we go any further, every group or individual who supports a Guaranteed Basic Income (GBI) may have a different idea of what constitutes a Guaranteed Basic Income. So to keep things simple for the purposes of this discussion, let’s agree for the rest of this post that a Canadian GBI would offer the following benefits to recipients:
- $1088. per month (a standard anti-poverty metric)
- Free provincial healthcare with no deductible
- Free provincial dental care with no deductible
- Free prescriptions with a $50 annual deductible
- Low entry bar to access: Must be a Canadian citizen or legally landed immigrant
- Over the age of majority in the province in which they reside
- A person earning less than the official poverty line amount in the province in which they reside
- Not a person serving time in prison
- Not a person serving in Canada’s military
- Not a person under 24/7/365 medical care (like a person in a long-term coma)
With that said, let’s see what a GBI can do for all Canadians — and not just the actual recipients of those benefits.
GBI Benefit Number One for Canada and its Provinces:
Saving Provinces and Taxpayers Money
Kick every welfare recipient in Canada off of provincial welfare and provincial disability programmes the moment the GBI comes into effect.
Yes, end provincial welfare and provincial disability programmes completely!
It sounds traumatic, but every province in Canada spends multi-millions (and depending on the size/population of the province) billions on the administrative support (administration buildings, office staff, other personnel, IT costs, security costs, land costs, property management costs, management training/seminars, etc) to pay provincial welfare and provincial disability recipients. This is known as the ‘overhead’ cost of running these programmes, and the gross annual totality of those administrative costs can be more than all of the welfare cheques combined.
For each welfare recipient who gets a $700 monthly welfare cheque, there is obviously a per capita cost for every person receiving a monthly welfare cheque; There is a person being paid $50,000/yr (or more) to administer a certain number of recipients, there is a building (or buildings) dedicated to that city, town, or region of the province, and there are other costs associated with running provincial social assistance programmes.
Every province has its own welfare and disability administration. That’s overlapping and duplication of services tenfold (10 provinces) and three territories, plus the federal government.
By paying poverty-stricken people via the federal CPP payments system only, the provinces would no longer be obligated to pay provincial welfare or provincial disability payments. At all. Ever.
After the transition period to a pan-Canadian GBI each province could lower the taxes it charges to its residents by a corresponding amount. Some provinces might be able to drop their provincial sales tax in half or better! Other provinces might be able to abolish provincial income tax altogether.
This is especially true if provinces decide to sell-off all the infrastructure associated with welfare and disability payments. Which (land and buildings especially) could net them many billions of dollars.
‘Yi-Haw!’ — said every Canadian premier.
In short, instead of 13 multilayered, overlapping and duplicated provincial and federal income assistance programmes (now that’s approaching communist-era levels of duplication my friend!) there would be one payer of income assistance only — Canada’s federal government — which would be 100% responsible for administrating the GBI programme.
To finance the GBI, the federal government might need to raise the GST rate by 1% (don’t forget that your provincial taxes would be dramatically lowered) or the feds might decide to raise the federal income tax rate by 1% on the richest Canadians instead.
Either way, provincial taxes would fall dramatically, while federal taxes would see a fractional increase.
GBI Benefit Number Two for Canada and its Provinces:
A GBI Would End Homelessness in Canada
Welfare rates in Canada are based on each province’s ability to pay, not on how much it actually costs to feed, clothe, and shelter a human being in that province. Which is why there is homelessness in a rich country like Canada.
The reason there is homelessness in Canada are threefold:
- A person lives in a city where rents are high and therefore can’t afford to pay rent, nor do they have enough money to be able to afford to move to a rural area where rental rates are a fraction of the lowest rents in Canada’s biggest cities.
- A person becomes depressed or violent on account of not being able to afford rent, and ends up committing offenses (like sleeping in someone’s backyard, pickup truck box, or dumpster) or commits property crimes (and gets caught and jailed) and subsequently, no one will rent him or her a place.
- A person is disabled and is unable to afford rent, nor can they move to a cheaper rental market because they need to be close to a hospital, a clinic, or other medical facility. In some cases, it’s that they have enough money for their rent, or their meds, but not both.
A federally funded GBI would pay enough to allow low-income people to pay rent, eat, receive their prescription medications, buy clothing — and yes, unlike provincial welfare schemes — allow them a little extra money so they can purchase work-related clothing, get a haircut and take the bus to work if they land a job.
Not only all that, but many welfare recipients have serious dental problems. If you’re an employer and you have 50 people apply for 1 job opening, are you likely to hire that one guy who is missing his front teeth? Not likely. With a GBI, those people can get their dental work done and appear as presentable as the rest of the job-seekers and have as good a chance to land the job as the other 49 people.
Provincial welfare systems just can’t afford to provide all that, which means that once people get on welfare, they’re often on it for life.
And they can face reductions in their monthly benefit amount if they do earn money. That just doesn’t happen with a GBI.
Indeed, provincial welfare systems can reduce monthly benefits for many reasons, such as more than one person living in a dwelling. In British Columbia for example, the rent portion of the welfare cheque is regulated to $375. per month (not too many places available for rent in BC for $375/month!) but if two people on welfare live together at the same BC address, both will have their monthly welfare cheque reduced. Now you have ‘two upset homeless people’ instead of ‘one homed couple’.
Which directly impacts crime stats. See how that doesn’t work for taxpayers?
Paying people a standardized $1088 per month (no matter how many people live in the same house or apartment as long as all zoning bylaws are met) will allow people to share accommodations — leaving them enough money every month to eat, buy work-related clothing, haircuts, bus passes, etc. and eventually get them back into the workforce.
Hey! Even if they can work part-time that is a benefit to them and to society because it means that eventually they’ll find permanent employment and they won’t need GBI.
That is the ultimate goal of GBI: Temporary assistance to get back to work — instead of welfare for life.
GBI Benefit Number Three for Canada and its Provinces:
Streamlining the Payments System for Canadian Citizens, Refugees and Economic Migrants
Some poverty-stricken refugees and economic migrants to Canada receive higher amounts of assistance from the federal government than poverty-stricken Canadians.
For instance, some Syrian refugees are receiving $2600 per month from the federal government — that’s per family member!
So, a Syrian refugee family of five receives $13,000 per month no matter where they live in Canada, while a poverty-stricken Canadian-born family of five might receive $1600 per month (or less!) depending on the province in which they reside.
Is that right? Is that how generous Canada is to refugees, but not to its own citizens?
It’s an honourable thing for Canada to accept refugees from war-torn countries and help them to establish a new life here. But isn’t that a little extravagant?
Shouldn’t refugees and economic migrants to Canada as well as Canadian-born adult citizens who earn less than the poverty line amount and Canada’s senior citizens all receive the same level of benefit?
The GBI would pay the same amount to everyone without any reductions in the monthly benefit amount for those who share accommodations, for those who earn money up to the poverty line amount, nor reductions for any other reason, except to pay fines as adjudicated by the courts like vehicle fines or alimony payments, etc.
In this way, every adult who earns less than the official poverty line amount would receive the same monthly benefit amount instead of wildly different amounts. Doesn’t that seem more fair?
Isn’t that a better way to treat citizens and immigrants than the various overlapping and duplicated payments systems? Of course it is.
GBI Benefit Number Four for Canada and its Provinces:
Treating Canada’s Senior Citizens Better
Under the existing CPP and OAS system, some of Canada’s senior citizens receive small amounts of money to live on.
Let’s look at a comparison of a Canadian-born senior citizen couple vs. a Syrian-born refugee couple, both couples reside in Canada.
a) The Canadian-born senior citizen couple may receive as little as $920 per month, and are allowed to work.
b) The Syrian-born senior citizen refugee couple will receive $2176 per month, and aren’t allowed to work.
It seems unfair in the extreme that the people who built this great country should receive far less reward than recent immigrants, doesn’t it?
Of course, it goes without saying that accepting refugees from war-torn countries is a truly noble thing to do. No true Canadian begrudges law abiding persons a better life here in Canada. The country is practically empty and our cities are just tiny dots in a 9.985 million square kilometre landscape so we’re glad to have them.
And paying them $1088 per month (each adult) along with the other GBI benefits seems reasonable, just like it seems reasonable to pay the same amount to Canadian-born seniors who live under the poverty line.
It’s wrong to pay the people who built this great country into what it is today such pitiful amounts of money (which they paid into the CPP fund their entire working lives) while we pay refugees many times more.
It’s like a scene from The Twilight Zone.
By topping-up the pension amount of Canadian citizens to the $1088/mo GBI amount + the GBI benefits, we can do away with the OAS programme completely, do away with pharmacare for senior citizens, and eliminate other overlapping federal and provincial programmes in place to support seniors.
Getting rid of all these layers of duplication will save various levels of government billions of dollars per year, and put the administration of all citizens who live under the poverty line under one roof, one payments system, and one jurisdiction. And we know that ending government waste, overlapping programmes between the federal and provincial governments, and duplication of services between the provinces will save taxpayers billions of dollars every year!
It’s time to streamline Canada’s income assistance systems, it’s time to top-up the incomes of senior citizens to $1088 per month + benefits, it’s time to pay refugees the same amount as Canadian citizens living under the poverty line would receive, and it’s time to put a stop to the costly multilayered benefit systems in Canada.
A GBI would be less costly for taxpayers, it would reduce homelessness and property crimes, it would streamline the benefits payment system and it would help poverty-stricken senior citizens live healthier lives and reward them in a small way for their contributions to our great land.
Disclaimer: I have my own renewable energy website and I contribute renewable energy blog posts to another website — so I’m obviously a proponent of renewable energy.
However, back in the day I was an entrepreneur who learned about dealing with various levels of government, about operating within regulatory frameworks, and needing to budget carefully for future large scale projects.
With the foregoing in mind, I offer the following comment about the Kinder Morgan pipeline project proposal (the TMX expansion) that is planned to run from Edmonton, Alberta through to the Westridge oil refinery (Chevron) in Burnaby, BC:
- Unfortunately, there are still places where renewable energy won’t work in a cost-effective manner. Eventually, renewable energy technology will develop and become feasible everywhere on the planet. But we still need oil & gas in the meantime.
- The past 5 Canadian Prime Ministers and probably a similar number of British Columbia and Alberta Premiers gave tacit approval to the Kinder Morgan pipeline expansion which led the company to believe the twinning of the pipeline would be approved.
For the federal government or any province to pull the rug out from under a company that has been led along for two decades to believe their project would be approved — and which provides a valuable service for people who drive cars and trucks in British Columbia and Alberta — would be unthinkable and two-faced.
The TMX Expansion should be approved based on those points alone as both Conservative and Liberal federal governments have promised the project would be a ‘Go’ and KM proceeded on that basis.
IMPORTANT TO NOTE IF KINDER MORGAN WAS OPERATING IN A TPP COUNTRY: The various levels of government in Canada could be sued for not following through on their tacit approval in recent years — and Kinder Morgan and possibly Chevron would likely win a court judgement worth billions of dollars which Canadian taxpayers would be forced to pay. Not only that, but a TPP court could still order the pipeline built!
However, there is another option which I will cover below.
About the Westridge Refinery in Burnaby, BC
At present, one tanker per week leaves the Westridge refinery (Chevron) in Burnaby BC, sometimes carrying 50,000 or 100,000 barrels of oil, gasoline, diesel, kerosene, or more exotic hydrocarbons like naptha, xylene, toulolene, and other volatile liquids. But once the 2nd pipeline is built, one tanker per day will leave the Westridge refinery.
All of these are explosive liquids and in an accident where fire occurs could easily destroy (yes, entirely destroy) the 2nd Narrows bridge or the Lions Gate bridge, which is why they run under those bridges at 4:00am to enhance their margin of safety. (Thankfully, there are no terrorists in our region)
Proposal to Enhance Shipping Safety in BC by Relocating the Westridge Refinery to Deltaport
I propose relocating the Westridge refinery in Burnaby BC to Deltaport BC, and that the federal government of Canada and the provinces of British Columbia and Alberta offer significant investment, allowing public safety to be dramatically improved.
NOTE 1: I’ve spoken to Ray Lord who is highly respected within the petrochemicals industry and remains the chief spokesman for Chevron’s Westridge refinery and he seemed interested in my idea to move the refinery to Deltaport.
Instead of a 2nd Pipeline – Move the Oil by Rail to Deltaport
It’s magic that Deltaport is the terminus for CN Rail and by using the rail option to move petroleum it means the proposed 2nd pipeline would never be needed.
Public safety would be dramatically improved, Chevron would have two crude oil transportation modes to keep it running, and in the event of a spill it’s well documented that rail spills are orders of magnitude smaller than pipeline spills.
NOTE 2: Pipeline spill incidents average 1.2 million BARRELS of oil, while rail tanker spill incidents average 220,000 US GALLONS. A huge difference!
This option would allow 3 shifts at the relocated refinery instead of 2 as is the case now, and even allow the refinery to continue operations in the event of a failure along the existing pipeline route.
NOTE 3: KM would lose the ability to build the new pipeline but allow it to neatly step out of a public relations nightmare — and it might choose to become an investor in the new Deltaport facility and not lose a cent of profit in the process.
All for less than the cost of a potential legal action brought by Kinder Morgan and possibly Chevron too.
A Fund to Remediate Pipeline Oil Spills
A 6 cents per barrel of oil tax should be applied to all liquids that move through pipelines in Canada which should be held in a trust fund to deal with future pipeline spills. The fund could be invested and the returns would increase the total value of the fund.
NOTE 4: Railways don’t need such a tax as they can’t continue rail operations along that line until the spill is cleaned up, so they’re already highly motivated to clean up rail spills ASAP.
If Canada, British Columbia and Alberta kicked in funding to relocate the refinery:
- No longer any need for the TMX Expansion
- Thousands of jobs would be created to build the new Deltaport refinery
- Public safety would increase by orders of magnitude in British Columbia
- Chevron, environmental protesters, and Kinder Morgan would be happier
And all that government investment would eventually be recovered through taxes.
Even Chevron liked my idea.
There are many things in the economic and political world that are going ‘right’ at the present time and there are many things going ‘wrong’ and depending upon where you are in the world, you see the glass as half-full or half-empty.
Where you are financially… likely determines your views on economics and politics.
In the colonial and postwar eras, if you were happy and supportive of democracy it’s because you lived in a thriving economy in the West or Japan — and if you were unhappy you lived in a colonial or post-colonial nation with a ‘frontier’ economy, which is to say, you were dirt poor and local warlords were more powerful than your own government.
However, that’s changing.
Globalization Changed the World
Especially since the advent of globalization 2.0 (FYI: globalization 2.0 began in 1974 with the creation of the Petrodollar) wealth shifted from industrialized nations to developing nations along with millions of jobs that were offshored in the pursuit of higher profits for Western corporations — profits which were then distributed among relatively small numbers of rich shareholders.
Over many years this caused wealth to ‘trickle upwards’ and is responsible for the creation of the 1 percent economic class.
Consequently, in America (which always has reliable stats) the 1 percent in that country enjoy more wealth than the bottom 80 percent combined!
Here’s a nice, short video that demonstrates this; Keep in mind, this video was made in 2009. Things are much worse now… and people wonder why political change occurs?
The total wealth of the United States was 54 Trillion dollars in 2009. Let’s see how it was distributed…
As long as we keep in mind that things are getting more dire each year, that will about cover inequality in America and explain the recent and major political changes there — with surely more change to come.
Growing Inequality Isn’t Being Addressed
Inequality is even worse globally. Although different in absolute numbers than America’s situation, the disparity between rich and poor is even greater.
Even today, 71 percent of the world’s population exist on less than $10 per day and 9 million per year die of starvation and a lack of clean drinking water.
That’s Failure by Any Standard!
All the good work by NGO’s over decades of time aside, it’s a catastrophic indictment of our entire civilization. It seems to be a case of; ‘We can do better, we just can’t be bothered’.
To illustrate the disparity that remains in the world let’s look at the present trend, lest you think world leaders are doing anything to solve the problem.
It’s pretty clear this is the Number One problem in our century and that it isn’t going to be solved at the G20 Hamburg summit. And if the 20 most powerful nations on Earth can’t solve it year-after-year (look again at the trendline) then it isn’t going to be solved.
I think it’s a pretty safe bet that it isn’t ever going to be solved.
Therefore, Let’s Be Realistic and Deal With the Symptoms
Now that we’ve ‘gone realistic’ we can settle ourselves down and figure out a way to compensate the ‘losers’ of globalization, which used to be the bottom two economic quintiles in each developed nation but are increasingly the bottom three economic quintiles. Yes, the middle class is being hollowed-out and sooner than you think there won’t be a middle class.
(You know, the middle class? The group that was mainly responsible for paying for most of the infrastructure built in the postwar era and for paying many of the entitlements enjoyed by developed nation citizens)
Fortunately, it’s an easy fix.
In the next 10 years, one-in-every-eight jobs will be lost in developed nations to technology — whether robots on assembly lines, or computers or other technologies, it’s happening now. In some ways those jobs are already gone.
With the flick of a wrist, corporations could accelerate their Automation / Mechanization / Computerization (AMC) program and do it over the next 40 months instead of the next 10 years. That’s a very sobering thought.
(Side-story on the graphic: In the European example, all the countries in red and orange are countries where technology is replacing traditional labour jobs. But those newly-unemployed workers simply travel to London or Paris and take jobs from the workers there because they are willing to work for lower wages. Which increases unemployment and welfare rates in London and Paris. You see? Nothing happens in a vacuum. It’s all connected)
If AMC adoption were to suddenly increase
Of course, GDP would leap forward, corporations would make astonishing profits, relatively small numbers of Western shareholders would reap even more dividends further enriching the 1 percent, and developed nation corporations would have the ability to better compete with developing economies.
It won’t solve the problem of the 1 percent sucking up all the wealth because as U.S. and European corporations make larger profits, the 1 percent will receive higher dividends.
But the ‘losers’ of globalization — ‘the shrinking middle class’ that are rapidly becoming members of the fourth and fifth economic quintiles — can be compensated.
Compensating the Hollowed-out Middle Class
Why should they be compensated? Because developed nation governments allowed millions of jobs to be given to developing nations (via legislative inaction) when corporations began to offshore jobs in significant numbers in the 1970’s.
But we can solve it now, exactly as President Nixon predicted (and tried to do while in office) by instituting a 5 percent tax on every robot and job-stealing mechanized device based solely on the value of the work performed (just like an income tax on individuals) to fund a Guaranteed Basic Income (GBI) for unemployed adults.
What do Smart People like Bill Gates say?
Smart people like Bill Gates are also calling for this plan, and one of the best reasons for it is to maintain social cohesion so that we don’t lose our country (via revolution) in the mad dash by small numbers of corporate shareholders for larger dividends.
The GBI would replace ALL social welfare programs, many of which are duplicated at the federal and state levels, some cities have additional income schemes that exist concomitant with other levels of government. In many cases there is duplication and even benefit fraud via intimidation of the people who run those small-scale city programs.
Every adult citizen in America (to use the U.S. for an example) that is unemployed would receive $1088 per month — but only once they exhausted their unemployment insurance benefits. As America is a nation of workers it’s safe to assume that they would still be working if their jobs weren’t already offshored by greedy U.S. corporations and their shareholders.
Also, every retired person who is trying to live on less than $1088 per month would have their monthly income topped-up to $1088 per month via the GBI program. (Just put low income pensioners on the GBI and be done with it)
It isn’t enough to get rich on! But it is enough to live on at a very basic level and allow unemployed adults to stay ready for any job opportunity that may appear.
The bonus here is that local shopkeepers would love it as every cent would be spent on groceries and medicine, on clothing and haircuts for job interviews, and to pay for phone/rent/internet access. The GBI’s secret is that it would be a real boon to local economies!
In the UK, the amount could be set at £1088 per month, while EU countries could set their GBI at €1088 per month.
Tax the Robots!
It’s so simple to fix the vast inequalities that are getting worse with each passing year. TAX THE ROBOTS!
And cancel the many overlapping, inefficient, and abuse-prone welfare programs by turning them into one automated program that pays every unemployed adult $1088 per month (after they have exhausted their unemployment insurance benefits) and to top-up the monthly income of pensioners to $1088 per month.
It’s so simple, even a politician could do it!
Keep Workers Viable Until Needed for the U.S. $1 Trillion National Infrastructure Program
All G20 countries could enact a similar policy. Keep your former workers alive and viable (who after all, are only ‘former’ workers since millions of their jobs were offshored by corporations with their government’s approval) by using a GBI and they will be ready and willing to return to work — a different kind of work than manufacturing, but still, paid work — where they can be part of a great national infrastructure renewal program lasting at least one decade.
Most developed nations are at the stage where Generation I and Generation II infrastructure needs replacement and upgrade. It isn’t glamorous, but it is ultra-important. By the time that’s accomplished, Gen III infrastructure will be needing upgrades or outright replacement. See how that works? See all the people working on national and state/city infrastructure projects? Yes, working people are not unemployed people. It’s so simple.
Tax the robots, pay the GBI to unemployed adults, and rebuild and upgrade the national infrastructure — all paid for by a nominal tax on robots and other job-stealing devices. Now that’s a plan that benefits everyone!
- Automation will affect women twice as much as men. This is why (World Economic Forum)
- Can a universal basic income meet universal basic needs? (The Brookings Institution)
- The UN must lead way to cut the 24,000 deaths each day from hunger (OXFAM)