What do you mean by a guaranteed basic income?

To measure poverty rates, Canada uses the Market Basket Measure (MBM), which is the cost for a family of two adults and two children face to pay for basic necessities (food, clothing, shelter, transportation, and other essential goods and services).

To get an MBM for an individual adult, you can divide the family MBM by 3 (2 children = 1 adult). In Waterloo Region, this becomes $17,156 per year using the latest available data.

I propose to pay a supplemental income to every adult making less than the individual MBM per year, equal to the individual MBM amount. For Waterloo, this means any adult making less than $17,156 per year would receive an additional $17,156 per year in basic income.

For those making between 1 and 3 times the MBM amount, there would also be a basic income payment, decreasing as income increases. In Waterloo, anyone making less than $51,468 per year would get some basic income.

How much would my basic income payment be?

How much would this cost to implement?

Approximately 16% of adult Canadians earn less than the individual MBM, all of whom would receive approximately $17,000 per year. There are approximately 30 million adult Canadians in total, so approximately 4.8 million Canadians would receive the full basic income amount.

The cost of giving all 4.8 million of these people $17,000 per year would be $81.6 billion.

For those Canadians earning between 1 and 3 times the MBM, the math behind the costing is a bit more complicated, but can be estimated at an additional $82 billion. Approximately 32% of adult Canadians make this much per year, which amounts to about 9.6 million people. Due to the tapering nature of the payments, the average payment for people in this group is half the MBM, or $9,500 per year. This leads to the estimated $82 billion cost.

Overall, this program would cost the Canadian government about $164 billion per year to implement.

How would we pay for the guaranteed basic income?

I propose to cover the $164 billion cost of the program in three ways:

• Discontinuing the EI and CPP programs, and using existing EI and CPP contributions to fund this program. The government collected $26.9 billion in EI contributions in 2023, and $74.8 billion in CPP contributions in 2023, which already covers $100.7 billion of the costs of the program.

• Implementing a wealth tax, with a 1% tax on net wealth over $10 million, a 2% tax on any net wealth over $50 million, and a 3% tax on net wealth over $100 million. Alex Hemingway writes in PolicyNote that this would generate $32 billion in the first year.

• Changing policies on our financial sector would generate an additional $15 billion, and reducing tax breaks for large companies would generate an additional $19 billion, for a total of $34 billion in revenue.

Altogether, this would raise almost $167 billion in revenue per year, which is more than enough to fund this guaranteed income proposal.