9 ways to pay for Recovery Universal Basic Income

Basic Income isn’t left or right, if we choose the right away to pay for it.

Last Updated: August 11, 2020

UBI Works has put together 9 different options to pay for RecoveryUBI: a $500 monthly payment to all adults, which increases to guarantee each individual an income of $2,000/month ($3,000 per couple, and $1,500 per additional adult in the family). It is the basis of a fairer and faster economic recovery in Canada. 

These 9 funding plans are drawn from a list of $874B in funding proposals collected from ideas right across the political spectrum. These options demonstrate that it is fully possible to pay for a basic income without raising personal income taxes, without eliminating existing needs-based social programs, and without adding to the national debt. Adopting and financing a Recovery UBI for Canada is merely a matter of political will

Recovery UBI - Revenue Treemap + RecoveryUBI
Infogram

9 ways to pay for Recovery UBI

Revenue Raised
Collections of tax reforms that can pay for a Recovery UBI

$130B

Land Value Tax

Understanding it

Introduce a land value levy of 2.91% - $130,135,200,000.

Joining Singapore, Denmark, Taiwan, Hong Kong -  a levy on the value of land (not property) shares in the unearned appreciation of land value.  76% of our nation’s wealth is in real estate.  A land value tax would slow the rise of property values and encourage more productive use of land,  such as development of multi-family housing in valuable areas of our cities.   

A 2.78% levy is less than the estimated 5.5% average annual growth of land value worldwide, and could be structured to be paid by equity (lien) rather than cash.   A higher LVT could also be used to lower income taxes, replace property tax, and fund our cities.  

LVT is called “the least bad tax” by economist Milton Friedman.

$129B

Corporations and Economic Activity Pay More

Understanding it

  • European-level GST/HST (10% GST increase from current) - $73,382,400,000
  • Increase Corporate Income Tax Rate by 5% - $9,300,000,000
  • Reduce Federal Business Subsidies (Corporate Welfare) - $8,500,000,000
  • Limit the Dividend Tax Credit to the actual tax rate paid by the corporation - $4,870,000,000
  • Eliminate tax advantages for foreign digital service companies - $2,000,000,000
  • Increase Carbon Price to $75 - $7,933,500,000
  • Eliminate 50% Capital Gains tax exemption (corporate) - $8,965,000,000
  • Offshore tax changes - $5,000,000,000
  • Financial Activities Tax at 5% on the financial sector - $7,000,000,000
  • Apply corporate tax on multinationals - $2,000,000,000

$135B

High Income Earners Pay More

Understanding it

  • Introduce a 2% Wealth Tax above $20M in net worth - $11,194,000,000
  • Luxury Tax - $585,000,000
  • Halve federal tax expenditures on RRSP/RPP tax breaks - $23,000,000,000
  • Halve provincial tax expenditures on RRSP/RPP tax breaks - $17,000,000,000
  • Lower threshold and increase rates on highest tax brackets - $8,188,000,000
  • Capital Gains at 70% (provincially) - $4,543,600,000
  • Capital Gains at 70% (federally) - $8,262,000,000
  • Deduction of interest and carrying chareges on investment income (PIT) - $1,925,000,000
  • Eliminate the federal portion of the Basic Personal Amount - $41,395,000,000
  • Eliminate the provincial portion of the Basic Personal Amount - $16,558,000,000
  • Re-introduce estate / inheritance taxes of 45% on Estates worth more than $5M - $2,000,000,000

$147B

Reduce Current Government Expenditures

Understanding it

  • Reduce Federal Business Subsidies (Corporate Welfare) - $8,500,000,000
  • Eliminate current Federal tax expenditures on Tax Shelters such as RRSPs, TFSAs, and Pension Plans - $46,265,000,000
  • Eliminate current provincial tax expenditures on Tax Shelters such as RRSPs, TFSAs, and Pension Plans - $33,810,000,000
  • Eliminate the federal portion of the Basic Personal Amount - $41,395,000,000
  • Eliminate the provincial portion of the Basic Personal Amount - $16,558,000,000

$130B

Tax Environmental Degradation / Use of Commons

Understanding it

  • Introduce a Land Value Levy of 1.82% on the value of land - $81,390,400,000
  • Eliminate fossil fuel subsidies - $2,092,000,000
  • EM Spectrum Levy - $10,000,000,000
  • Increase Carbon Price to $75 - $7,933,500,000
  • Economic rent on forestry activities in publicly owned forests - $5,000,000,000
  • Economic rent on publicly owned fisheries - $5,000,000,000
  • Economic rent on mining rights on publicly owned non-renewable resources - $10,000,000,000
  • A Pigouvian tax on Landfills - $2,000,000,000
  • A Pigouvian tax on water use - $5,000,000,000
  • Levy a 20% tax on sugary drinks - $1,744,000,000

$160B

Micro Tax

Understanding it

Financial Transaction (payment) Tax of 0.2% - $160,000,000,000

A payment tax (or micro tax) applies a tax on all financial transactions undertaken within Canada. Payments Canada has estimated that there are $50 trillion in annual electronic financial transactions in Canada annually. This would reduce financial speculation and give all Canadians a share of our economy. 

$129B

A Federal Compromise Plan

Understanding it

  • 5% federal GST increase - $36,691,200,000
  • Limit the Dividend Tax Credit to the actual tax rate paid by the corporation - $4,870,000,000
  • Capital Gains at 70% (federally) - $8,262,000,000
  • Eliminate tax advantages for foreign digital service companies - $2,000,000,000
  • Offshore tax changes - $5,000,000,000
  • Eliminate the federal portion of the Basic Personal Amount - $41,395,000,000
  • Increase EI premiums - $6,443,000,000
  • Limit the Dividend Tax Credit to the actual tax rate paid by the corporation - $4,870,000,000
  • Levy a 20% tax on sugary drinks - $1,744,000,000
  • Reduce Federal Business Subsidies (Corporate Welfare) - $8,500,000,000
  • Eliminate tax advantages for foreign digital service companies - $2,000,000,000
  • Offshore tax changes - $5,000,000,000
  • Apply corporate tax on multinationals - $2,000,000,000

$248B

Bonus 1: Gross cost financing with no debt and no cuts using a single tax

Understanding it

Land Value Tax on 5.55% the total value of land - $248,196,000,000

$201B

Bonus 2: Gross cost financing with no debt, no program cuts, using collection of taxes

Understanding it

  • 5% federal GST increase - $36,691,200,000
  • Apply corporate tax on multinationals - $2,000,000,000
  • Deduction of interest and carrying charges on investment income (PIT) - $1,925,000,000
  • Eliminate 50% Capital Gains tax exemption (corporate) - $8,965,000,000
  • Eliminate fossil fuel subsidies -$2,092,000,000
  • Eliminate tax advantages for foreign digital service companies - $2,000,000,000
  • Eliminate the federal portion of the Basic Personal Amount - $41,395,000,000
  • Eliminate the principal residence exemption (Federal) - $5,915,000,000
  • Capital Gains at 70% (provincially) - $4,543,600,000
  • Capital Gains at 70% (federally) - $8,262,000,000
  • Financial Activities Tax at 5% on the financial sector - $7,000,000,000
  • Halve federal tax expenditures on RRSP/RPP tax breaks - $23,000,000,000
  • Increase Carbon Price to $75 - $7,933,500,000
  • Increase Corporate Income Tax Rate by 5% - $9,300,000,000
  • Introduce a 2% Wealth Tax above $20M in net worth - $11,194,000,000
  • Levy a 20% tax on sugary drinks - $1,744,000,000
  • Lower threshold and increase rates on highest tax brackets - $8,188,000,000
  • Non-taxation of private health and dental benefits - $3,030,000,000
  • Offshore tax changes - $5,000,000,000
  • Re-introduce estate / inheritance taxes of 45% on Estates worth more than $5M - $2,000,000,000
  • Reduce Federal Business Subsidies (Corporate Welfare) - $8,500,000,000

Key Takeaways

Recovery UBI is affordable

  • At a cost of $199B/year, it’s just over 8% of GDP.
  • It’s only about a quarter of all government spending.
  • There are $874B dollars worth of tax reform ideas that could pay for the entire program 3 times over. Most of these options do not involve raising personal income taxes.
  • A guaranteed minimum income can be rolled out on top of other government cash support programs, like OAS/GIS or provincial programs, and other non-employment incomes, so that every Canadian makes at least $2,000/month.

It saves taxpayers' money

Recovery UBI is an investment that partially pays for itself

  • Canada’s national basic income for families with children, the Canada Child Benefit, contributes $2 to our economy for every $1 invested, while creating tax revenues that further reduce its cost.
  • Because of this effect, we don’t need to raise the entire cost of RecoveryUBI in new taxes.

9 ways to pay for Recovery UBI

  • Recovery UBI could be funded using various collections of tax reforms, reflecting different priorities on how to make our economy work better for Canadians. 
  • Which combinations of reforms are chosen to fund a basic income is a matter of electoral politics.
  • 8 of the 9 ways do not raise personal income taxes.


*This article will be updated throughout 2020 as new analyses are made. Follow this article for major ongoing updates.

Introduction

We can ensure a more fair and fast economic recovery by giving a raise to all Canadians through a national universal basic income. 

We call it Recovery UBI: a $500/month universal dividend, rising to a $2,000/month guaranteed minimum income (GMI) for individuals ($3,000 per couple and $1,500 per additional adult in the family)

This investment can be funded through tax reforms that appeal to a broad base of Canadians. In this article, we detail several such collections that have been proposed by both left- and right-leaning thinkers.

Our objective is to show that there are ample ways to fund a universal basic income—which you choose depends on what you think will have the best impact on Canada.

When the head of the World Economic Forum says “it’s time for a massive reset of capitalism” and the former Governor of the Bank of Canada, Stephen Poloz calls for an ongoing CERB-like mechanism to alleviate future economic shocks, it becomes clear that the time for band-aid solutions and incremental measures is over. 

Our current system is making enormous sums of money; Canada’s GDP sits at over $2.36 trillion, but technology is pushing an increasing share of it out of the job market. Technology is the single most powerful enabler we have to create a better life for everyone on this planet, and UBI is how we organize ourselves to take advantage of it.

Recovery UBI is affordable

The net cost of Recovery UBI is $199B/year. That provides every Canadian adult with an additional $500/month they can count on, no matter their circumstance. It further provides every individual with the security of a guaranteed minimum income of $2,000/month ($3,000/month per couple with $1,500 per additional adult in the family).

$199B is a bargain

Funding options that could pay for Recovery UBI 4 times over

Basic income proposals have support right across the political spectrum. Most people can agree that direct cash transfers are the fastest, most efficient way to address poverty and give everyone a stake in an increasingly technology-driven economy.

UBI Works has compiled $874B worth of tax reform ideas that could pay for the Recovery UBI net program cost 4 times over, and if you include temporary financing, nearly 7 times over. 

Which options you choose depends on what you think will have the best impact on Canada.   Tax reforms change the rules in a market economy: some can incentivize pro-social economic activity and disincentive unsustainable activities. Which reforms would you choose?

Recovery UBI - Revenue Treemap with PBO-OBI + RecoveryUBI
Infogram

Click here for a detailed list of these tax reform options.

A Quicker, Cheaper UBI

Many basic income proposals aim to replace the current social assistance landscape with a single, more generous and efficient program. These plans require intense, years-long coordination between all levels of government and careful, incremental implementation to ensure the many millions of people that rely on current programs are not negatively impacted. 

Recovery UBI is designed to be a quicker, cheaper solution for the context of the current pandemic, while still allowing for a transition to permanent arrangement between the governments. It would immediately provide $500/month to every adult, ensuring all Canadians get the help they need when they need it: now.

It would further create a guaranteed minimum income, or income floor, that would increase the $500/month to ensure that it, along with existing government cash supports and all other income combined, is no less than $2,000/month (or $1,500 for those residing with family members also receiving it).

This postpones the need to account and negotiate for the complex and unintended interactions when combining multiple government programs, and ensures that Canadians can continue to rely on the vital supports they already receive. This way, we can be confident no one is accidentally left worse off. 

The guarantee offsets the risk of losing income during the pandemic, such as getting laid off, as the monthly amount will rise if your income falls below $2,000. However, this mechanism can make the choice to go back to work more complicated as a larger paycheque will mean a lower Recovery UBI cheque. 

Therefore, the program has a special feature; it only counts 50% of your employment income against the $2,000 guarantee. This ensures that at every income level, the choice to work will still earn you more money. For every dollar earned through employment, the income guarantee payment will only decrease by $0.50. If you are making enough that you don’t require the income guarantee, you still get an extra $500/month. 

Because Recovery UBI is additive, and does not require consolidating dozens of provincial and federal programs, its net cost is much cheaper than a single, all-encompassing basic income, and something the federal government can roll out quickly and affordably to give all Canadians immediate relief.

It saves taxpayers’ money

Direct Savings

By reducing the number of Canadians living in or close to poverty, the demand for programs that support low-income individuals and families would shrink. This would happen automatically, as families rising incomes would mean they no longer need to access these programs. 

Importantly, this can be accomplished without eliminating any of the needs-based programs that many people rely on, so that we can guarantee that the most vulnerable will not be left worse off. With more Canadians lifted out of poverty, provinces and territories would be able to better focus their social programs on addressing non-monetary needs and improving public services.

Indirect Savings

In addition to the direct program costs above, there are indirect cost savings that will come with the reduction of poverty. Feed Ontario has provided estimates on the healthcare and criminal justice costs that are associated with people living in poverty. Using their approach, we can estimate that a basic income could reduce healthcare costs by $17.7B and criminal justice costs by $3.9B across Canada. This leads to possible savings of $21.6B in these two areas alone. 

Program Replacements

Recovery UBI provides a platform on which the different levels of governments can eventually work together to implement common-sense consolidation of social programs to improve access, reduce cost, and ensure no one is left worse off. 

Recovery UBI is an investment that partially pays for itself

“As business leaders, we see basic income as good economics and enlightened self-interest: it is a pro-growth, pro-business, pro-free-market economic stimulus that will grow the economy and create jobs. 1,000 economists in 1968 signed a letter endorsing a version of basic income.” - Letter by 120 Canadian CEOs addressed to Ontario Premier Doug Ford

Canada’s national basic income for families is growing the economy 

Canada has already demonstrated that a national-scale basic income supports economic growth. Over 1.1M families are receiving at least $600/month from the Canada Child Benefit and 400,000 families are receiving at least $1,000/month right now.

The Canadian Centre for Economic Analysis showed that the increased spending driven by this basic income contributes $85B in business revenues, $24B in corporate profits, and 453,000 full-time equivalent jobs, every year, as well as increasing taxes from this economic activity.

From the the inception of the program in 2015 through the summer of 2019, the report showed:

“[T]he CCB’s contribution to GDP amounts to 2.1% of Canada’s total GDP. Every $1 disbursed through the program to Canadian families has translated to a $1.97 contribution to GDP, meaning that the economic activity generated by the CCB is almost twice the size of the CCB payments themselves. This economic stimulus also generates tax revenue which can help offset the cost of the program. For every $1 disbursed to Canadian families through the CCB, over half ($0.55) is recuperated through taxes, $0.30 to the federal government and $0.25 to provincial governments.”

It turns out that giving money to people with less is good for the economy: 

“Families who receive CCB income contribute economic activity by spending this additional income according to their needs. In so doing, they increase the demand for certain goods and services, which creates ripples throughout the economy through indirect and induced effects. To fulfill the larger demand generated by the CCB, some businesses require more staff and workers, for example, additional store clerks, truck drivers, and supply chain managers.”

One limitation of this analysis is that it looks only at the gross contribution without considering where the money came from. Depending on the source of the money, the overall impact can vary widely.   This all depends on how you pay for it, which we explore later in this article. 

Not all the money needs to be raised up front

Given the return on investment from increased consumer spending on the economy and tax revenues, we do not actually need to raise $199B up front in new taxes to fund a $199B basic income. The goal should be to find the minimal upfront increase in taxes needed to achieve a payback period within a reasonable amount of time, when initially coupled with deficit-financing or direct funding via quantitative easing from the Bank of Canada. 

For example, if you buy a house you plan to rent out for a profit, you pay some of the cost upfront and borrow the rest as a mortgage.This works because you know the rental income will help pay down your mortgage. The same principle can be applied to funding Recovery UBI, since UBI will grow the economy and generate a payback over time through greater tax revenues.

If you are wary of the option of direct financing from the Bank of Canada (BoC) instead of government debt financing, consider that BoC money creation is already being used right now to buy private corporate bonds and securities, propping up the stock market. 

In fact, in 3 months the Bank of Canada created more money for asset purchases than the annual cost of RecoveryUBI. Using the central bank as a supplement for government financing is already used in economies such as the UK and is only a temporary measure. The BoC itself said in February, "[a] money-financed fiscal expansion can be more stimulative than a debt-financed fiscal expansion of equal magnitude.” 

Maybe it is time to use this type of financing to directly support Canadians through our economic recovery rather than the stock market.


Recovery UBI is an investment in our people and our economy, and will create a return on investment that will partially pay for itself.  UBI Works will commission an economic impact analysis from a leading economics analysis firm to find this upfront investment and payback period. Follow this article to be updated when that is made available.

Calculating 9 ways to pay for Recovery UBI

Recovery UBI is an investment that can be funded in ways that appeal to a broad base of Canadians. Below, we explore various collections of tax reforms that could pay for Recovery UBI that reflect different priorities for where the money should come from, priorities that would require electoral politics to resolve.  

The 9 collections of tax reforms presented below are by no means the only ways to fund Recovery UBI. In fact, we have identified over $874B in tax reform proposals suggested by both left- and right-leaning organizations over the years, and still more proposals may be feasible.  If you feel we’ve missed any funding options, let us know. Explore these options yourself in our Recovery UBI funding options.

Recall from the previous section that a basic income partially funds itself through economic growth and reduced costs of government programs aimed at poverty reduction. Like any major investment in public infrastructure, a government would typically use temporary financing in anticipation of a return on investment from economic growth. 

Therefore, for the options below, we take the $199B cost of Recovery UBI and further reduce it to $130B, after accounting for temporary financing of 35% ($69.9B/year) of the program through borrowing money or creating it from the Bank of Canada. This amount will be reduced every year as increased government revenues from economic activity offset the cost of the program.

The following collections all add up to close to $130B/year.  If you don’t agree that temporary borrowing or money creation should be used to reduce initial tax burden, there are many combinations of tax reforms you can select that add up to $199B.

9 ways to pay for Recovery UBI

Revenue Raised
Collections of tax reforms that can pay for a Recovery UBI

$130B

Land Value Tax

Understanding it

Introduce a land value levy of 2.91% - $130,135,200,000.

Joining Singapore, Denmark, Taiwan, Hong Kong -  a levy on the value of land (not property) shares in the unearned appreciation of land value.  76% of our nation’s wealth is in real estate.  A land value tax would slow the rise of property values and encourage more productive use of land,  such as development of multi-family housing in valuable areas of our cities.   

A 2.78% levy is less than the estimated 5.5% average annual growth of land value worldwide, and could be structured to be paid by equity (lien) rather than cash.   A higher LVT could also be used to lower income taxes, replace property tax, and fund our cities.  

LVT is called “the least bad tax” by economist Milton Friedman.

$129B

Corporations and Economic Activity Pay More

Understanding it

  • European-level GST/HST (10% GST increase from current) - $73,382,400,000
  • Increase Corporate Income Tax Rate by 5% - $9,300,000,000
  • Reduce Federal Business Subsidies (Corporate Welfare) - $8,500,000,000
  • Limit the Dividend Tax Credit to the actual tax rate paid by the corporation - $4,870,000,000
  • Eliminate tax advantages for foreign digital service companies - $2,000,000,000
  • Increase Carbon Price to $75 - $7,933,500,000
  • Eliminate 50% Capital Gains tax exemption (corporate) - $8,965,000,000
  • Offshore tax changes - $5,000,000,000
  • Financial Activities Tax at 5% on the financial sector - $7,000,000,000
  • Apply corporate tax on multinationals - $2,000,000,000

$135B

High Income Earners Pay More

Understanding it

  • Introduce a 2% Wealth Tax above $20M in net worth - $11,194,000,000
  • Luxury Tax - $585,000,000
  • Halve federal tax expenditures on RRSP/RPP tax breaks - $23,000,000,000
  • Halve provincial tax expenditures on RRSP/RPP tax breaks - $17,000,000,000
  • Lower threshold and increase rates on highest tax brackets - $8,188,000,000
  • Capital Gains at 70% (provincially) - $4,543,600,000
  • Capital Gains at 70% (federally) - $8,262,000,000
  • Deduction of interest and carrying chareges on investment income (PIT) - $1,925,000,000
  • Eliminate the federal portion of the Basic Personal Amount - $41,395,000,000
  • Eliminate the provincial portion of the Basic Personal Amount - $16,558,000,000
  • Re-introduce estate / inheritance taxes of 45% on Estates worth more than $5M - $2,000,000,000

$147B

Reduce Government Expenditures

Understanding it

  • Reduce Federal Business Subsidies (Corporate Welfare) - $8,500,000,000
  • Eliminate current Federal tax expenditures on Tax Shelters such as RRSPs, TFSAs, and Pension Plans - $46,265,000,000
  • Eliminate current provincial tax expenditures on Tax Shelters such as RRSPs, TFSAs, and Pension Plans - $33,810,000,000
  • Eliminate the federal portion of the Basic Personal Amount - $41,395,000,000
  • Eliminate the provincial portion of the Basic Personal Amount - $16,558,000,000

$130B

Tax Environmental Degradation / Use of Commons

Understanding it

  • Introduce a Land Value Levy of 1.82% on the value of land - $81,390,400,000
  • Eliminate fossil fuel subsidies - $2,092,000,000
  • EM Spectrum Levy - $10,000,000,000
  • Increase Carbon Price to $75 - $7,933,500,000
  • Economic rent on forestry activities in publicly owned forests - $5,000,000,000
  • Economic rent on publicly owned fisheries - $5,000,000,000
  • Economic rent on mining rights on publicly owned non-renewable resources - $10,000,000,000
  • A Pigouvian tax on Landfills - $2,000,000,000
  • A Pigouvian tax on water use - $5,000,000,000
  • Levy a 20% tax on sugary drinks - $1,744,000,000

$160B

Micro Tax

Understanding it

Financial Transaction (payment) Tax of 0.2% - $160,000,000,000

A payment tax (or micro tax) applies a tax on all financial transactions undertaken within Canada. Payments Canada has estimated that there are $50 trillion in annual electronic financial transactions in Canada annually. This would reduce financial speculation and give all Canadians a share of our economy. 

$129B

A Federal Compromise Plan

Understanding it

  • 5% federal GST increase - $36,691,200,000
  • Limit the Dividend Tax Credit to the actual tax rate paid by the corporation - $4,870,000,000
  • Capital Gains at 70% (federally) - $8,262,000,000
  • Eliminate tax advantages for foreign digital service companies - $2,000,000,000
  • Offshore tax changes - $5,000,000,000
  • Eliminate the federal portion of the Basic Personal Amount - $41,395,000,000
  • Increase EI premiums - $6,443,000,000
  • Limit the Dividend Tax Credit to the actual tax rate paid by the corporation - $4,870,000,000
  • Levy a 20% tax on sugary drinks - $1,744,000,000
  • Reduce Federal Business Subsidies (Corporate Welfare) - $8,500,000,000
  • Eliminate tax advantages for foreign digital service companies - $2,000,000,000
  • Offshore tax changes - $5,000,000,000
  • Apply corporate tax on multinationals - $2,000,000,000

$248B

Bonus 1: Gross cost financing with no debt and no cuts using a single tax

Understanding it

Land Value Tax on 5.55% the total value of land - $248,196,000,000

$201B

Bonus 2: Gross cost financing with no debt, no program cuts, using collection of taxes

Understanding it

  • 5% federal GST increase - $36,691,200,000
  • Apply corporate tax on multinationals - $2,000,000,000
  • Deduction of interest and carrying charges on investment income (PIT) - $1,925,000,000
  • Eliminate 50% Capital Gains tax exemption (corporate) - $8,965,000,000
  • Eliminate fossil fuel subsidies -$2,092,000,000
  • Eliminate tax advantages for foreign digital service companies - $2,000,000,000
  • Eliminate the federal portion of the Basic Personal Amount - $41,395,000,000
  • Eliminate the principal residence exemption (Federal) - $5,915,000,000
  • Capital Gains at 70% (provincially) - $4,543,600,000
  • Capital Gains at 70% (federally) - $8,262,000,000
  • Financial Activities Tax at 5% on the financial sector - $7,000,000,000
  • Halve federal tax expenditures on RRSP/RPP tax breaks - $23,000,000,000
  • Increase Carbon Price to $75 - $7,933,500,000
  • Increase Corporate Income Tax Rate by 5% - $9,300,000,000
  • Introduce a 2% Wealth Tax above $20M in net worth - $11,194,000,000
  • Levy a 20% tax on sugary drinks - $1,744,000,000
  • Lower threshold and increase rates on highest tax brackets - $8,188,000,000
  • Non-taxation of private health and dental benefits - $3,030,000,000
  • Offshore tax changes - $5,000,000,000
  • Re-introduce estate / inheritance taxes of 45% on Estates worth more than $5M - $2,000,000,000
  • Reduce Federal Business Subsidies (Corporate Welfare) - $8,500,000,000

Collections of tax reforms that can pay for a Recovery UBI

Revenue Raised

1
Land Value Tax of 2.78%
$124B
Joining Singapore, Denmark, Taiwan, Hong Kong -  a levy on the value of land (not property) shares in the unearned appreciation of land value.  76% of our nation’s wealth is in real estate.  A land value tax would slow the rise of property values and encourage more productive use of land,  such as development of multi-family housing in valuable areas of our cities.   
A 2.78% levy is half of the estimated 5.5% average annual growth of land value worldwide, and could be structured to be paid by equity (lien) rather than cash.   A higher LVT could also be used to lower income taxes, replace property tax, and fund our cities.  
LVT is called “the least bad tax” by economist Milton Friedman.
2
European-level GST/HST - $72B
Increase Corporate Income Tax Rate by 5% - $9.3B
Increase the Small Business Tax Rate by 1.5% - $2.7B
Limit the Dividend Tax Credit to the actual tax rate paid by the corporation - $4.9B
Capital Gains included at 70% of income tax rate - $6.3B
Increase Carbon Price to $75 - $7.9B
Eliminate tax advantages for foreign digital service companies - $1B
Offshore tax changes - $5B
Eliminate the employee stock option deduction - $0.7B
$113B
This collection of taxes will fall hardest on corporations and shareholders.

Joining Denmark, Sweden, Norway and Hungary, which have a 25% value-added tax (VAT) on goods and services: a 10% federal GST increase would result in an average total tax rate of 21% across the provinces and territories, lower than the average VAT in Europe of 21.5%. This is a tax on businesses that multinational corporations such as Amazon, Uber, and Walmart would not be able avoid.

Raising the federal GST by 10% to 15% is slightly higher than Andrew Yang’s 10% VAT UBI funding plan.
3
2% Wealth Tax on fortunes over $20M  - $11B
Luxury Sales Tax - $0.5B
Capital Gains Taxed at 70% of income tax rate - $6.3B
3% Federal GST increase - $25B
Eliminate current tax expenditures on RRSPs, TFSAs, and Pension Plans - $51B
Limit on Dividend Tax Credits - $4.8B
Increase Income Tax on Highest Earners - $8B
End employee stock option deduction - $0.7B
$108B
This collection of taxes primarily raises revenues from the wealthiest Canadians and highest income earners, as well as those who consume the most.

High income earners can save for retirement without tax shelters from the government that primarily benefit wealthiest Canadians which most Canadians cannot access.
4
Eliminate current tax expenditures on RRSPs, TFSAs, and Pension Plans - $51B
Eliminate the Federal & Provincial Credit for the Basic Personal Amount  - $57B
Capital Gains included at 70% of income tax rate - $6.3B
$114B
This collection of tax changes is more egalitarian in having all Canadians making tax contributions.Low income earners will become taxpayers because their basic income payments would replace the basic personal amount tax credit.

High income earners can save for retirement without tax shelters from the government that most Canadians cannot access.

Canadians with capital gains pay closer to income tax rates (marginal rate of 35%), as promoted by Warren Buffet.
5
Tax the use of our “commons” - our natural resources and public goods

Land Value Levy of 1.375% - $72B
Increase Carbon Price to $75 - $8B
Economic rent on forestry activities in publicly owned forests  - $5B
Economic rent on publicly owned fisheries - $5B
Royalty on mining rights on publicly owned non-renewable resources - $10BA Pigouvian tax on Roads - $10BA Pigouvian tax on Landfills - $2B
A Pigouvian tax on water use - $5B
$107B
This collection recognizes that a tax on the use of our scarce resources could be used to compensate all Canadians, since nature is not owned by anyone.   The resources are the commons, owned by all, so rental value belongs to all.

A land value levy of 1.375% is one-fourth of the estimated average annual growth in land value worldwide, and could be structured to be paid by equity (lien) rather than cash. 

Resource royalties and Pigouvian taxes compensate us for the use and abuse of our natural resources.
6
Micro-payments tax
$100B+
A payment tax (or micro tax) applies a tax on all financial transactions undertaken within Canada. Payments Canada has estimated that there are $50 trillion in annual electronic financial transactions in Canada annually. Therefore, a micro tax of 0.2% in Canada would generate at least $100B annually. This would reduce financial speculation and give all Canadians a share of our economy. 

Understanding it

Can you suggest better combinations of funding options? Background information and sources of all funding options are being maintained by UBI Works through volunteer contributions. Please join the effort and help improve this list of over $874B of funding options for a basic income in Canada.

Conclusion - UBI is affordable

Given what a Recovery UBI will do for you - eradicate poverty, grow the middle class, support communities’ businesses, use taxpayers’ money more efficiently, and grow the economy - its cost is a bargain. It is barely more than what we are already spending to support the economy during COVID-19 and, as the recession takes hold, that number will only grow. 

Over the long term this program has the potential to pay for itself and free up much-needed funds for healthcare and education. How we pay for it in the short term is merely a matter of our national priorities. There are more than enough ways we can raise the money that will satisfy the values of all Canadians. We need only to tell our government and political parties that a Recovery UBI is a top priority - and if they act on it, they will earn our vote.