Honourable senators, I rise to contribute to the debate at second reading of Bill S-206, the national framework for a guaranteed livable basic income act, sponsored by our colleague Senator Pate. This bill directs the Minister of Finance to develop a national framework to implement a guaranteed basic income program throughout Canada for any person over the age of 17.

Before I proceed, I again want to commend Senator Pate for her long-standing advocacy on behalf of those struggling in poverty. Her dedication to these difficult issues enriches the discourse in this chamber. I may not always agree with Senator Pate’s prescriptions, but her persistent work on these issues is valuable, and I wish to acknowledge it.

I spoke at length as the critic for the previous incarnation of this bill, Bill S-233, and although I will not repeat every point I made during the last Parliament — even though I do have 45 minutes to do so — the legislation before us is of significant consequence, and if you’ll indulge me, I believe many of the points bear repeating.

The idea of a guaranteed income is not new. Nobel Prize laureate Milton Friedman once championed it as a simpler and less paternalistic alternative to sprawling welfare bureaucracies, essentially providing support directly through a negative income tax. Robert Stanfield studied it when he led the Progressive Conservative Party in Ottawa, and our former colleague Hugh Segal was one of its most articulate advocates.

At its best, the concept promised efficiency, fairness and a reduction in bureaucracy, but, crucially, those earlier models always assumed that in return for establishing a basic income, redundant welfare programs would be eliminated. That is not, however, what some modern advocates propose. Instead, they want to add a new entitlement on top of the existing system, undermining the very simplicity and efficiency that made the idea attractive in the first place.

A guaranteed basic income, or GBI, cannot just be layered onto our welfare state; it must replace it. Moreover, although temporary workers, permanent residents and refugee claimants have been removed from this edition of the bill, the suggestion that income payments should begin at age 17 is, to me, a non-starter. Such a policy risks discouraging ambition and personal drive precisely when young people should be working to build their futures.

Guaranteed income models vary widely in both their administration and expense, but the costs are staggering. Without a full-scale replacement of our current tax system and welfare programs, the costs of GBI are, in my view, far beyond attainable. Estimates from the Basic Income Canada Network range from $187 billion to $637 billion annually.

For perspective, in 2024, the federal government collected $217 billion in personal income tax revenue, and the total federal budget was $450 billion. That is to say, without the overhaul and replacement of our current welfare programs, even the most modest of estimates for basic income programs would consume a significant portion of our federal budget, if not all of it.

The Fraser Institute examined several models, including one based on the Canada Emergency Response Benefit, or CERB, payments of $2,000 per month. Providing every working-age Canadian with $24,000 annually would cost $464 billion. Unsurprisingly, the report concluded this was unsustainable. Even with clawback models, the trade-off remains the same: Lower costs mean higher marginal tax rates and weaker work incentives — the so-called welfare wall — with recipients potentially discouraged from moving off social assistance.

The report illustrates the competing interests in the design of guaranteed income models. Understand that there are three key features of any guaranteed basic income model: the cash transfer, the reduction rate and the income threshold. Three competing variables are seeking three competing interests: large enough transfers to alleviate poverty, while minimizing cost and avoiding disincentives to work. As the report rightly observed, no design can achieve all three goals of generosity, affordability and strong work incentives simultaneously.

The Macdonald-Laurier Institute likewise concluded that unconditional cash transfers, however well intentioned, often do more harm than good. Such schemes require higher taxes, higher spending, and still end up providing less to those who need help most. As their report put it, spending less on Canadians with severe disabilities so we can spend more on able-bodied working-age people is “. . . an indefensible use of scarce public resources.” And I agree.

Common sense dictates that giving people large unconditional cash payments is bound to make work less attractive and rewarding, not least because now recipients are only working for the difference between their basic income entitlement and wages. This is not only an issue of cost but also an issue of sustainability. Our former colleague Senator Bellemare, with her expertise in economics, warned that funding a guaranteed income program would require a wholesale overhaul of the tax system. The tax changes it would take to fund such a program would have a negative effect on labour market participation not because people are lazy but because they are rational.

In essence, the number of people supported by the program would exceed the number of people the government set out to help initially. Fewer hours worked mean fewer hours taxed, and that means less revenue for the government. In short, paying for guaranteed basic income appears to be unsustainable.

Providing money to Canadians without requiring work, and with little incentive to seek it, creates serious problems. It undermines labour participation, leading to fewer hours worked, less income earned, lower tax revenues and, ultimately, less funding available to sustain what was intended to be an anti-poverty initiative.

Evidence from provinces echoes this. British Columbia commissioned one of the most comprehensive reviews of guaranteed income worldwide. Its expert panel concluded that basic income was not the most just or effective way to reduce poverty, finding the claims of its proponents unsubstantiated and warning against disincentives to work. The panel rejected even pursuing a pilot project.

The needs of people in this society are too diverse to be effectively answered simply with a cheque from the government. A basic income is a very costly approach to addressing any specific goal, such as poverty reduction. Proponents will argue otherwise, but countless reports and economists have raised red flags about the likely effectiveness of guaranteed basic income as a solution to fighting poverty.

It would seem to me that one of the essential requirements for the creation of a guaranteed income would be a stronger, responsible financial management by the federal government, regardless of its political stripe. Well, the national debt in this country has doubled from $650 billion in 2015 to over $1.2 trillion today. In less than 10 years, this administration has added more to our national debt than all administrations combined since Confederation, and we are a country that spent the better part of the first half of the 20th century engaged in international wars.

Because of this debt, the federal government is now spending a staggering $53 billion on debt service charges alone — $53 billion just to service our debt. For perspective, that is more than the entirety of the 2024-25 Canada Health Transfer of $52 billion and significantly more than the $35 billion being spent on child care benefits in Canada. In short, the most expensive government program in Canada today is now debt servicing.

I want to appeal for caution in highlighting the fragility of our economy and the danger of introducing sweeping new entitlements without a solid fiscal foundation. Liberal taxes, inflation and ever-expanding red tape continue to drive investment and opportunity south of the border while steadily weakening the value of the Canadian paycheque. The government’s own data shows that the federal tax take is now at a 22-year high. At the same time, in terms of real gross domestic product, or GDP, per capita growth from 2015 to 2024, Canada ranks at the bottom of all 40 countries of the Organisation for Economic Co-operation and Development, or OECD — excuse me, thirty-ninth out of 40, ahead of only Luxembourg. That is an appalling record for a country as resource-rich and industrious as ours.

Almost every major economic indicator since 2015 paints the same picture. Productivity growth is stagnant; private sector investment has fallen sharply; capital flight continues to send Canadian wealth abroad; housing affordability has collapsed. The cost of living has soared, while the Canadian dollar hovers near 20-year lows. Interest payments on our national debt now exceed federal health transfers. Budget deficits are widening, and our real GDP per capita lags behind every other G7 nation. Industrial production is stalling. Colleagues, this is not the profile of a healthy, competitive economy. It is the record of decline under this government.

Worse still, Canadians are losing faith in the future. Seventy-eight per cent of Canadians now believe their children will be worse off than they are. It shouldn’t be this way in Canada. Canadians deserve a government that makes life affordable again, restores opportunity and secures a better future for our children, not one that piles on taxes and debt while pretending that bureaucratic experiments like a guaranteed basic income will solve the very problems that government policies have produced.

We should be one of the richest countries on earth, harnessing our abundant resources, our talent and our enterprise to generate the prosperity that funds sustainable social programs and real poverty reduction. That is the kind of lasting foundation this bill claims to pursue, but it cannot be achieved through yet another costly, untested federal scheme.

From the evidence I have read and the precarious position of Canada’s finances, I cannot conscientiously support a bill that seeks to mandate this government to create a framework for a program with such a potentially monumental price tag.

Senator Pate, in her speech last spring, rightfully referenced the update of the Parliamentary Budget Officer, or PBO, on expenditures associated with a guaranteed basic income, which provided some modest estimates.

While the PBO’s projections may appear modest, they rest on the assumption of nothing less than a wholesale overhaul of Canada’s tax and benefit system, sustained through the elimination of existing supports, the restructuring of our federal tax system and the imposition of heavier burdens on taxpayers. That is not fine-tuning. It is a fundamental re-engineering of our fiscal framework, and it carries risks to work incentives, fairness and provincial jurisdiction that far exceed the tidy models presented in the report.

Let me be clear: This is not a minor policy adjustment. We are not discussing minor technocratic tweaks.

A guaranteed basic income would represent a fundamental transformation of our social and economic framework. It would redefine how Canadians pay taxes, how government provides support and how we conceive the role of the state in our life. The framework for such a sweeping change cannot, and should not, be decided through a private member’s bill in the Senate. It requires the clear consent of Canadians expressed through an electoral mandate.

In my view, major changes of this magnitude belong on the campaign trail, not in the backrooms of Parliament. If the government wishes to implement a program that could cost tens to hundreds of billions of dollars annually and replace existing pillars of our social safety net, then it must put that proposal squarely in front of the Canadian people. Let Canadians see the numbers. Let Canadians debate the trade-offs. And above all, let Canadians decide at the ballot box whether this is the direction they want for their country. Anything less risks undermining the trust and legitimacy that are the foundations of this country.

The Senate has an important role: to review, scrutinize and improve legislation, and to provide sober second thought. However, it is not our role, in my opinion, to launch sweeping social experiments without the consent of the governed. We are an unelected chamber, and our legitimacy depends on respecting the boundaries of that role.

If this government believes in the merits of a framework for a guaranteed basic income, let them make their case in an election campaign and seek the mandate to govern accordingly. That is the proper, democratic path forward.

However, as I’ve said in the past, I believe most bills deserve a chance to go to committee. Although I may not agree with the appropriateness of this bill, I do find it to be an important and interesting topic. I’ll leave it to the chamber to determine whether or not this bill should be referred to committee.