(Image Credit: Wikipedia Commons, ‘Biblical Illustration of The Book of Exodus, Chapter 1’ by Jim Padgett; the image is at this link. Used without modification under Creative Commons Licence).
Various legislative proposals are afoot that, if or when implemented, would make Canada a greatly less desirable place to live for many, while making it vastly more alluring to others. Our society is likely entering a stage of metamorphosis.
After I wrote my previous article (‘Our Money Tree’), I started thinking about how the existence of such a generous ‘welfare’ program might affect the perceptions, and thence the decisions of different people. As a brief recap, that article is about the two Bills (C-223 and S-233) currently before the parliament that would, if passed, require the finance minister of Canada to formulate a national framework for paying a ‘guaranteed basic livable income’ to every person in Canada over the age of 17 (which I read to mean that the person doesn’t have to be a Canadian, i.e., a citizen, permanent resident or refugee).
To be amply clear, these Bills, if passed into law, would not result in such a policy to come into being; they are merely asking the finance minister to formulate the framework for doing so. Any Bill that involves a matter requiring the appropriation of public revenue needs to receive something called the Royal Recommendation which is available only to Bills introduced in the parliament by a minister (see this link).
Bills C-223 and S-233 were sponsored by, respectively, NDP MP Leah Gazan and ‘Independent’ Senator Kim Pate. As such, they cannot receive the Royal recommendation, nor do they require it because there is no ‘appropriation of public revenue’ at play. If the Bills succeed in their intention and the finance minister does formulate this framework, it will need to be presented to the parliament in the form of a Bill in order for a policy of ‘guaranteed basic livable income’ to come into effect. Again, for the sake of brevity, I will be using the term ‘basic income’ in its lieu.
As I wrote, the implications of such a policy would be far-reaching, affecting both public finance and immigration. Before we dive into those for the purpose of understanding how they might affect our future as a society, and the society that we are likely to have in the future as a result of such a policy, let me list some other policies that are in the works that would also have a similar effect in terms of people’s perception of Canada as a desirable country to live in.
Briefly, I see a picture emerging where that perception will be sharply divided and at 180-degree divergence between the two camps.
The following policies are in the works in different jurisdictions within Canada:
- Bills S-233 & C-223 whereby ‘every person in Canada’ who is above the age of 17 gets paid a ‘basic income’ without any expectation in return (at least officially).
- Bill C-11 (formerly Bill C-10 in the previous parliament) would vastly expand the reach of the government (via CRTC) to dictate what internet content Canadians are able to create and/or consume. There is a large constituency in Canada that finds this proposal to be completely wrong. I have detailed my own objections to Bill C-10 in my article ‘Bill C-10: A Fatwa on Knowledge’.
- Another Bill from the previous parliament that ‘died on the floor’, the so-called ‘anti-hate’ Bill C-36, would be reintroduced in the parliament, according to a recent statement by Diversity Minister Ahmed Hussen in this story by Global News on February 04, 2022. Bill C-36 was widely criticized for its overreach and the new Bill is unlikely to be any different (we can assume this safely because Bill C-11 is also the same as Bill C-10). For my exploration of Bill C-36, please see my earlier article ‘Bill C-36 Sets Us On a Journey to Baghdad of 2007’.
- Although the invocation of the Emergency Measures Act has been revoked, the part relating to the government granting itself extraordinary powers in relation to people’s financial lives has not been revoked and remain in effect sine die (without a fixed date for reverting to the status quo ante). Anyone falling afoul of the new version of Bill C-36 (or anything at all for that matter) can have their lives shattered via the use of these extraordinary powers, without recourse to any appeal of legal measure.
- Ontario is set to introduce a digital ID in the Fall of 2022. This would be an all-purpose ID. According to this official link, it can be used not only to open bank accounts and obtain insurance coverage as well as serve in lieu of a health card but also to make ‘an age-sensitive purchase’ such as a lottery ticket or alcohol. Presumably, people won’t be able to lie to their doctor about their excessive drinking because the same piece of ID would be used at both locations. Jokes aside, however, it is disconcerting that when a person picks up a package at Canada Post or a courier company, this data (including the details of the sender) can potentially be captured.
- In British Columbia, ‘all regulated health professionals’ will be ‘required to be vaccinated by March 24, 2022, to work in their occupation in British Columbia’.
The above list is not meant to be exclusive but suffices to help us understand the societal impact of these and other similar legislative / policy proposals that are afoot right now.
MUNCH & CRUNCH
Let’s now dive into the numbers involved in the ‘basic income’ proposal. As I explained in the previous article, in the absence of anything else to go by, we will take the minimum wage ($ 15 per hour or thereabouts in all provinces) as a substitute for ‘basic income’. Taking 2,000 hours a year for full time work, that gives us a yearly ‘basic income’ of $30,000 for each individual.
Let me reiterate that according to Bills C-223 & S-233, ‘participating in education, training or the labour market is not required to qualify’ for this income. This means it would be available to various demographics, including seniors. Let us assume that ‘basic income’ will supplant the old age supplement that they receive currently. (Important Note: I am taking the case of seniors merely to illustrate the financial implications of ‘basic income’. Please do not construe this illustration as an attack against / bashing of seniors).
According to this link of StatsCan, on July 01, 2021, there were 7,081,792 people over the age of 65 years in Canada. And according to this link of the Government of Canada website, the maximum amount of Old Age Supplement for which an individual is eligible is $ 959.26 (if single, widowed or divorced, with annual income less than $ 19,464) or $ 577.43 (if their spouse / common law partner gets the full OAS amount- also $ 577.43; their combined annual income should be less than $ 25,728). Let us split the difference and say that OAS is $ 768.35 per person per month, or 9,220.14 per year. Let us bear in mind that this is halfway between the maximum amounts; many people would be getting less, depending on their income. Let us now round this annual number up to $ 9,500.
Given the number of seniors, the grand total of OAS that the government pays out comes to $ 67.28 Billion. Paying them $ 30,000 each for the year would bring us to $212.45 Billion.
In other words, ‘basic income’ increases the payment to seniors by nearly $ 145 Billion every year compared to OAS. And that is assuming that OAS gets removed once ‘basic income’ is introduced
Now, to be clear, I don’t begrudge anyone getting more money, especially seniors. And I have taken their numbers as a test case only because I could find those numbers easily. But the issue here is the total additional demands (for all the demographics of the recipients of ‘basic income’ including students and many more demographics) on our public funds.
If we are going to include ‘every person’ over the age of 17 in this ‘basic income’, I am prepared to believe that the tab would likely be in the range of $ 1 Trillion a year, and perhaps higher.
The question, as always, is where this mountain-load of extra money is going to come from.
The answer that would be obvious to most people (I hope) is: Nowhere.
But my focus in this article is on people who aren’t sufficiently appraised of the facts (including the one that I narrated above).
THE VIEW FROM AFAR
There is an old Gujarati saying which translates as ‘Mountains are pretty from a distance’. When it comes to actually climbing them, few people would focus on their pretty appearance – the arduous journey would concentrate their minds on the other features of the mountain that are far from pleasant.
It is possible to argue, with the current state of technology, that would-be immigrants to Canada ought to know a lot about our country – and certainly a lot more than used to be the case in the pre-internet days. But there are a couple of factors that impede their ability to know as much about Canada as we would consider adequate.
Firstly, as the military adage goes, ‘The map is not the terrain’. There are things that can only be realized after firsthand experience (this is true in my case as well). Secondly, people who have a dream of coming to Canada will tend to ignore / filter out any message that they don’t want to hear about Canada. The people assisting them in the process (the consultants etc.) will of course cherry pick and/or spin facts to convince their client to part with their money. A sum of $ 30,000 sounds like a ton of money in Third World countries (which is where almost all of our immigration is from, nowadays). It is difficult for someone from there to understand that (for example) a princely amount of 1.5 million Indian Rupees a year is barely sufficient to get by in Canada. For them, the pull of a promise of that kind of money being given to them unconditionally would be irresistible.
The marketers of immigration to Canada would, of course, build entire campaigns on this feature. The rush to get to Canada is already so strong that many people are using questionable means to get here. With a ‘basic income’ policy in place, that rush could very well reach manic levels.
UP CLOSE & PERSONAL
For a lot of people who have been living here for a while, the effect of a policy of ‘basic income’ would be the opposite – albeit it would affect different people over different periods of the policy being in effect. The debt taken by the federal government is already north of $ 1 Trillion as of now. As we saw above, the additional outlays due to ‘basic income’ could very well be in the range of $ 1 Trillion every year. There is no additional ‘revenue stream’ (if I may use that noxious term) on the horizon that can come even remotely close to funding that additional outlay.
This is the point at which one must consider the possibility that the introduction of ‘basic income’ could be accompanied by the cessation of the existing support programs – or at least some of them. At the same time, search will be on for a piggy bank that can be raided. Perhaps you can see where I am going with this – yes, it’s the Canada Pension Plan.
Before we get to that, however, we must consider the possibility that in view of the humongous financial commitment involved, and the political ramifications of that, the policy on ‘basic income’ may very well be structured to exclude some potential recipients, such as by using means-testing. This would certainly bring down the outlays, but on the political side, a narrative would be constructed whereby it is still universally payable ‘to those in need’ (kind of like how the rebate on carbon tax is supposed to be higher than its annual cost to ‘the average family’). This would bring the financial commitment to less unmanageable levels.
Side by side, another component of the narrative could / would be to make it a matter of compassion and ‘the humanity within us’. Therefore, being unreservedly in favour of ‘basic income’ would automatically make one a good-hearted person, and conversely, having any opposition to it on any grounds whatsoever would automatically make the person ‘evil’, or at least un-Canadian.
Turning to the CPP, its latest financial statement shows that it has net assets in excess of $ 497 Billion as of March 31, 2021 (see this link on the website of the Canada Pension Plan Investment Board (CPPIB), this detail is on page 145). Moreover, according to this link on the same website, the annualized rate of return for the same report was 11.6% (over a ten-year period) and 11.7% (over a five-year period). All of this return doesn’t add to the net assets however, owing to the payments to pensioners. If the ‘basic income’ policy – and the subsequent takeover of the funds of CPP, if that happens – takes, say, five years, then the net assets could still have grown to be in the range of $ 600 Billion.
The combined result of limiting the eligibility for ‘basic income’ to some recipients and raiding assorted piggy banks such as the CPP fund would be that the in the initial years, it would all be peaches & cream in Canada – until ‘other people’s money’ runs out. By the time the adverse consequences of the policy surface, the people who brought in that policy will have comfortably gone into retirement (picture ‘riding off into the sunset’), and those who happen to be in the (hot) seat will probably take the blame for the chaos that could have been foreseen from the get-go.
As I narrated in an earlier article (‘Taking Flight’), many people are already leaving Canada (or thinking actively about it) due to their dissatisfaction with the Covid measures & policies attached to them. A policy of ‘basic income’ (and the other legislative initiatives that I mentioned earlier) could very likely intensify their desire to leave and swell the numbers of those having that desire. On the other hand, the policy of ‘basic income’ would, as I explained earlier, likely intensify the desire of potential immigrants to make Canada their destination. This would be especially true in the early ‘peaches & cream’ phase.
Two major events happened in the Indian subcontinent in the mid-1960’s. One was a severe drought caused by three successive failed monsoons, leading to widespread famine; at the time it was the ‘worst drought in a century’. The other was a war between India and Pakistan in 1965, which only made matters worse. Since Pakistan was an ally of the US, it was the first country to receive food aid from there. The crisis of insufficiency of food eased considerably there. At the time, Pakistan was under the military dictatorship of General Ayub Khan, so personal freedoms were significantly curtailed. In that period, a cartoon appeared in one of the newspapers in India, showing two dogs crossing the border between India and Pakistan from either side. As they were crossing, they stopped to greet each other and explained why they were crossing over to the other country. The dog from the Indian side said, “Because I need to eat”, and the dog from the Pakistan side said, “Because I need to bark”.
The cartoon fairly depicted human thinking. I believe that it would apply to Canada as well, once all these legislative measures come into effect. Furthermore, as I mentioned in my earlier article ‘Windward Islands’, many (and perhaps most) new immigrants come from places where the relationship of the individual with the State is one of antagonism, if not outright hostility. Therefore, their expectations of more freedom in Canada aside, they may be more used to an overbearing government. It is open to question how they would react to an overbearing Canadian government. But to the degree that they comply with these policies (or may force themselves to comply, as an unsavoury bargain for the improvement in their lives), its effect would be to change the overall structure of the Canadian society. There would be fewer (and fewer) dissidents over time. It remains to be seen if this results in Canada becoming a country characterized by an openly authoritarian government.