CERB is NOTHING like Basic Income and here’s why…

magnifying glass on top of tax documents

So roughly 8 million Canadians received CERB during the pandemic. The official statistic as of October 3, 2020 was 8,899,170 but that included EI recipients.

However, a Basic Income in it’s lowest form based off 75% of the poverty line at a 50% means testing, would have been the equal monetary cost. Yet, it would have encompassed nearly the same amount of people. So why didn’t they do it?

Because CERB was taxable income. There is a very dark and insidious tone to it, and it’s meant to be there. Not only were they hitting up the extra 11 million working Canadians with higher taxes, taxing those who were working while on CERB, taxing CERB itself, but also those who took Wage Subsidies. It was all calculated.

With it being taxable, it was setting up other benefits and provincial programs which means test their own against taxable income to become the next poverty wave across Canada. While sending large tax bills to the employed in the spring.

First it was the Students who felt it at tax time in April, then it was the Mothers and Fathers come July when CCB was adjusted, however the hardest hit was the seniors. Most of which were already on low income subsidy programs to begin with.

The next wave of hurt will come from the housing industry and i’m not talking about developers or jobs, but that of the rents being increased based off their income. All the geared-to-income housing that is being “finances updated” to adjust their rate will include the CERB checks. These greater than intended sums given up front, were well known to financial experts to come with strings attached later.

So how does Basic Income become nothing like CERB? Because itself is non-taxable. Even though the amount is lower than CERB it isn’t penalized as much against existing programs. In fact it compliments very programs like Employment Insurance in many ways such as extra benefits on top of EI which is vastly limited in scope compared to maximum earnings don’t outweigh the 55% of average high earning individuals. So if Basic Income is deducted even Dollar for Dollar from Employment Insurance but your in a Household where the other spouse or dependent isn’t on Employment Insurance they are still counting towards the Basic Income giving an extra $100+ month still.

Basic Income as per the PBO also has 3 options available… naturally we always advocate for Scenario 3. It makes sense. Not only is it more beneficial to add in those who earn between $70,000 and $120,000 per year, they are the ones who also pay into it the most, but also the lowered 15% rate from 50% makes it much more BI funding for those the lower they earn. Finally the Student who does the same job as a 35 year old, 15 years experience person is getting a little more help for having a lower wage.

Mothers who chose to work part time but still spend the same amount to go to work as you or I, still must encur those costs to make sure there is enough money coming in to buy those diapers and formula, even if her newborn isn’t registered and the CCB isn’t flowing yet.

There is ALWAYS registration and waiting periods for any kind of assistance, and this stops people dead in their tracks against keeping a consistent rent/mortgage payment, utility bills, and food. Basic Income isn’t an apply and see kind of thing. It would be paid by CRA to you directly, or to whom represents your household. Unlike CERB which saw some large households see a very large injection of cash into a single home, but little to others in the same neighbourhood.

It’s disheartening to think that we can have a national program to help low income children (CCB) up to 18, then a patch work of mismatched and differentiated terms through countless organizations and government entities ( I lost count at 2700 ) whom all want you to succeed to get you off their radar. It’s plain down right degrading.

How is it that those who seem to feel like you have to Work to Earn it or Starve mentality, all seem to agree that a Basic Income is a bad thing, that it will make Canadians lazy, when in fact it’s actually quite rewarding to work and still get some monthly help without strings attached. It kind of is like that nest egg you need for exactly the emergency we went through with COVID19.

A Family earning $95k/yr ~ $891/mth
A Single earning $51k/yr ~ $889/mth
A Student earning $15k/yr ~ $1339/mth
A #PwD earning $0k/yr ~ $2029/mth

How we pay for it? Well that’s simple. How do we pay for a road? We use the collective funds available from our government and put it to good use. The Return on Investment is far greater when you consider the economic gains, investment opportunities, new business startups, greater wage offerings, innovation and creation, greater education, and drain on our health care systems.

Basic Income is only about $192 Billion. We already spend just about $160 Billion per year on Social Services already. Then you factor in all the other cost savings and redistribution of government resources. But isn’t that why we pay them anyway?

Not to mention the sheer amount of savings from reduced crime. Not only small petty things, but those huge scandals that happen from people who live a life of crime because they grew up in poverty. The jail and social system costs are huge because we made them live that way when it is preventable.

The housing industry would actually flourish. As those who have housing now begin to have stability and make on time rent payments for longer terms, people will tend to stay put longer creating more reliable models from everything like your local grocery store not throwing out as much product, to your local tire shop having your size in stock because you’ve bought them for years there. As people live longer in homes, it creates less opportunity for rental price hikes, giving landlords more responsibility towards living conditions and amenities.

So we had CERB, and it pointed out some flaws, which are all related to the way it was distributed. It was equal to all, it was taxable, and it wasn’t fair. CERB, just made many people fear a Basic Income that is nothing like it.

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