PBO Report Concludes 6 Months of UBI Would Cost Less than 4 Months of CERB

In national news, Federal Parliamentary Budget Officer(PBO) Yves Giroux released a new report comparing the current cost of the Canada Emergency Response Benefit (CERB) to the cost of Universal Basic Income. Their estimates conclude that a 6 month Universal Basic Income would have cost the government less than what has already been spent in 4 months of CERB payments.

The PBO estimates a Basic Income for the last six months of the 2020-21 fiscal year would cost $47.5 billion to $98 billion depending on the setup. The funding would provide a guaranteed annual income of $18,329 and $25,921 to individuals and couples, respectively. The PBO found approximately $15 billion could be saved in administration costs through combining similar existing social programs. The savings could theoretically be used to offset the cost of implementing Basic Income.

The range in the PBO's estimated cost of Basic Income comes from varying the reduction rates at 50 percent, 25 percent, and 15 percent. The reduction rate is the percentage of the benefit that is reduced in relation to earned income. For every dollar in wages, a recipient’s benefit is reduced by between 50 and 15 cents, depending on the setup.

At the low end, the PBO estimates the cost of Basic Income would be $47.5 billion at a 50 percent reduction rate. This means a person would have to earn $36,660 to no longer be eligible for Basic Income payments. At the highest cost, more than 20 million Canadians would be eligible for Basic Income at a 15 percent reduction rate, increasing program costs to $98 billion per year. A person would have to earn more than $122,000 before benefits are eliminated at this rate.

What do you think?
Is Basic Income more cost efficient than CERB?
What Reduction Rate is best?
Should Basic Income replace CERB?