TORONTO (Pakistan Point News / Sputnik - 08th July, 2020) Providing a guaranteed basic income for Canadians struggling with the economic impact of the COVID-19 pandemic could cost the government up to $72 billion, the Office of the Parliamentary Budget Officer (PBO) said in a report.
"The total estimated gross cost of the defined [guaranteed basic income] would range between $47.5 billion [$34.92 billion USD] and $98.1 billion [$72.12 billion USD] based on the three scenarios for the six-month period from October 2020 to March 2021," the report said on Tuesday.
According to the estimate, working age Canadians would receive on average between $3,308 and $3,528 in benefits depending on the phase out rate. The plan takes into consideration a phasing-out rate of $0.50, $0.25 and $0.15 for each Dollar of employment income, with a lower rate resulting in increased eligibility and costs.
The report's initiator, Senator Yuen Pau Woo, said that a basic income program will be necessary once the government's wage support programs are phased out in the fall.
The senator said that the costs could be further reduced by terminating other benefits and that the overall cost would be lower than extending the Canada Emergency Response Benefit (CERB) program - a $1,400 benefit for workers who have had their income streams affected by the pandemic - for an additional six months at cost of $44.11 billion.
Critics, including Quebec Premier Francois Legault, have called the COVID-19 benefits excessive and said that they serve as a disincentive to return to work.
Should the Canadian government proceed with the idea it would add to an already mounting Federal debt that PBO forecasts will reach a record-high $188.22 billion in in fiscal year 2020-2021 and that has cost Canada its perfect credit rating after a downgrade by Fitch Ratings.