A study by the Fraser Institute calculates that it could add a very substantial burden on all Canadians
Imagine if the federal Goods and Services Tax (GST) wasn’t 5% but 105%.
That’s the top end of a calculation by the Fraser Institute for two reports looking into the cost to taxpayers of a guaranteed annual income (GAI) or universal basic income.
Even the lowest increase would see GST at 26%.
“Since the federal government introduced CERB there has been renewed interest in the idea of a Guaranteed Annual Income, but many Canadians are unaware of how much such a program could cost,” said Jake Fuss, an economist with the Fraser Institute and co-author of GAI: How Much Could A Guaranteed Annual Income Cost
The study considers four different GAI program scenarios including the option of reducing the amount paid to an individual as their income rises.
The analysis finds that the cost of a GAI program would be between $131.9 billion and $464.5 billion a year.
The lower figure is based on an annual income for all 18-64 year olds of $7,272, the equivalent of the Old Age Security benefit currently paid to all eligible seniors.
The upper figure is based on an annual income equivalent to the Canada Emergency Relief Benefit (CERB) of $2,000 per month. That would see overall government spending double.
There have been suggestions that the GAI could be funded by a wealth tax.
“If the federal government pursues a guaranteed annual income program, it will have to raise a staggering amount of revenue from taxpayers to pay for it,” said Tegan Hill, author of GAI: Illustrating the Tax Implications of a Guaranteed Annual Income.