Hearings have kicked off for a Senate bill that would set up a system for guaranteeing Canadians a minimum “livable” income.

The Senate’s finance committee started hearing testimony on Bill S-233 Tuesday.

The bill, which was introduced in the Senate and would still have to be adopted by the House of Commons if the Senate passes it, would set up a framework for the government to offer a “livable basic income…to ensure that individuals can lead a dignified and healthy life.”

One of the witnesses, University of British Columbia professor Jiaying Zhao, said a guaranteed basic income would be cheaper for Canadian taxpayers.

“Basic income actually reduces our taxpayers money. It’s cost effective. Overall, it’s less than what we currently spend on poverty,” she said.

Senators engaged in a spirited debate about the bill, which included questions about sustainably financing the scheme without jeopardizing other essential services.

Throughout the debate, Senators expressed concerns regarding who stands to benefit most from this program and at what cost. They grappled with the idea of striking a balance, particularly for individuals on the socioeconomic fringes.

Still, taxation was a recurring topic in the discussion. 

“Basic income does not need to be delivered through the tax system,” said economist Evelyn Forget.

She said that there are other ways to deliver it. Assuming cooperation between federal and provincial governments, she explained that a lot of machinery at the provincial level can be drawn on to deliver a basic income.  

The Canadian Taxpayers Federation is unconvinced, however.

“A guaranteed livable basic income would balloon the debt, increase the cost of living, and make it harder for businesses to hire the workers they need,” CTF federal director Franco Terrazzano told True North. 

Terrazzano also pointed to the government’s mishandling of Covid benefits, notably the Canadian Emergency Response Benefit (CERB), to raise doubts about Ottawa’s ability to handle a basic income.

“We saw the government give hundreds of dead people the CERB, how many dead people would get the GLBI?” said Terrazzano.

Numerous senators frequently referred to the Canadian Emergency Response Benefit (CERB) and its shortcomings, worried that Bill S-233 might face similar issues. 

“CERB is not the best comparator because there was a sense of urgency to send the money as quickly as possible. For a GBI (Guaranteed Basic Income), I don’t think there would be the same sense of urgency, and I think the government could introduce guardrails and verification measures that would be a bit more rigorous than the virtual non-existence of these guardrails for CERB,” said Yves Giroux, Parliamentary Budget Officer.

The role of provinces versus the federal government in implementing the program sparked discussion. Senators debated how to achieve collaboration and consensus among different regions.

“I believe that a design for a program across the country would be palatable to provinces, depending on the parameters, because every province is dealing with issues of poverty,” said Kathleen Wynne, former premier of Ontario.

Financing the guaranteed income, including concerns about debt and inflation, was a significant contention. Senators questioned the long-term economic stability of these funding mechanisms.

Multiple senators raised concerns about whether such a guaranteed income might deter Canadians from seeking employment. Senators underscored the importance of balancing between incentivizing work and ensuring security. Zhao argues that empirical evidence shows that basic income increases employment in certain demographics.

“You don’t need a PhD in economics to understand that if you pay people not to work, fewer people will work,” Terrazzano cautioned, however. 

“This would mean massive tax hikes, more money printing or more debt for Canadians’ kids and grandkids to pay back. If the government really wanted to help all Canadians, it would stop taking so much money from our pockets” 

Nobody on the committee said they opposed the bill altogether, merely questioning certain specific aspects of it.

Following the committee stage, Bill S-233 will enter the report stage for further discussions. If successful there, it will advance to the third reading in the Senate and, if passed, will then move to the House of Commons.