How Will GLBI Affect the Economy?

There is a growing affordability crisis in Canada and the existing supports are inadequate, unlivable, and keep people trapped in poverty. Instead of throwing away tax dollars reacting to crisis after crisis, GLBI gives Canada the opportunity to build an economy that works for everyone.

Despite Canada’s steady economic growth and near total recovery from the pandemic-era GDP slump, 53% of Canadians live paycheque-to-paycheque while 48% are $200 or less away from insolvency. The wealth gap continues to widen unsustainably, with wages stagnating even while market productivity increases. Canada’s income equality ranks low among other developed nations and continues to worsen, despite our massive GDP.

The direct financial support provided through GLBI will help individuals and families meet their basic needs and improve their purchasing power. The Canada Child Benefit, a basic income for families, grows the economy $2 for every $1 invested, keeps 250,000 families out of poverty, and contributes 450,000 jobs to the economy. A GLBI would lead to increased consumer spending on goods and services, which would in turn provide a boost to local businesses and helps to stimulate local economies. In South Korea, a UBI pilot project resulted in a 45% increase in local business revenues.

The link between cash transfers like the GLBI and local economic growth was further evidenced by pandemic relief programs such as CERB. When people received financial support, they were more likely to spend that money on local goods and services, creating a ripple effect throughout their local economy. 

With most small businesses being self-funded, a dwindling middle-class means less innovation and entrepreneurship. Since the early 2000s, Canada has seen a consistent decrease in new business start-ups. However, new research shows that 10% of people who received CERB started a business and 50% learned a new marketable skill, such as a new language. CERB, a basic income cash transfer, increased innovation and entrepreneurship.

According to the Canadian Centre for Economic Analysis (CANCEA), a Guaranteed Livable Basic Income could grow Canada’s economy $80 billion a year and create nearly 600,000 jobs in 5 years.

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