Universal basic income: a potential solution to financial inequality and poverty in Canada
LE3 .A278 2022
Bachelor of Business Administration
Universal Basic Income (UBI) is a form of social welfare through which the Government pays its citizens a predetermined amount regardless of their employment status. The purpose of UBI is to reduce financial inequality and poverty by providing recipients with the financial means necessary to support themselves. This report explores the potential of implementing a national UBI program in Canada, the subsequent economic and social impacts, and offers recommendations concerning the framework, funding, and subsequent reporting. First, it provides an overview of Canadian UBI experiments including the Ontario Basic Income Pilot Project and the Manitoba Basic Annual Income Experiment. Next, it reviews economic analysis including two reports published by the Parliamentary Budget Officer on potential national UBI models, as well as proposed legislation for a national UBI framework. The report also looks at experiments performed in other high-income countries, the results of which are largely consistent with those of the Canadian experiments. The results of these experiments and analysis suggest that the economic impacts of UBI include an insignificant reduction in labour effort, an increase in GDP, job creation and government revenue as well as a reduction in the effects of poverty. Meanwhile, the potential social impacts of UBI include a decrease in crime and violence, improvement in mental and physical health, an increase in quality of education as well as the mitigation of various gender-based issues. Overall, this evidence makes a compelling argument in support of UBI regarding its ability to alleviate financial inequality and poverty. However, if a national UBI program were to come to fruition, it must be accompanied by progressive tax reform to ensure successful wealth redistribution. Additionally, the existing literature lacks insight on the impact of UBI on subgroups based on race and gender. Data collection and reporting requirements outlined by the proposed legislation should incorporate intersectionality in its framework.
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