Liberal delegates support universal basic income, reject hike in capital gains tax


Liberal delegates to the party’s policy convention overwhelmingly supported a resolution calling for the establishment of a universal basic income (UBI) in Canada, while also rejecting a call to increase the capital gains tax.

By a vote of 77 percent, Liberal MPs present at today’s plenary session supported a call for the continued implementation of an income program similar to the Canada Emergency Benefit (CEP), which helped millions of people survive on monthly checks during the first wave. of the pandemic.

With 8.7% of Canadians living below the poverty line and thousands more struggling to make ends meet, supporters of the policy say that a RUB “would ensure that at-risk communities (including peoples Aboriginals) can feel financially secure ”.

“Based on the success of the CERB program, a RUB will help seniors and low-income Canadians maintain an adequate standard of living, regardless of their working status,” the resolution said.

Speaking to delegates gathered online, Alex Spears of the Young Liberals of Canada said that a RUB would ensure that “the country’s strong and robust social safety net is fit for the 21st century,” adding that a sending program of checks to all families is “completely consistent with our values ​​as a party.”

He said the program would “put more money in the hands of working Canadians and families” and could lift millions of people out of poverty.

“UBI is not a quick fix and it should be done in conjunction with many other progressive policies, but it is a critical step,” he said.

Would an UBI work?

The resolution does not say how such an expensive program would be designed and implemented.

Few jurisdictions in the world have successfully adopted programs that provide regular payments to all citizens without means test or working conditions.

The Parliamentary Budget Officer concluded last week that a universal basic income could nearly halve Canada’s poverty rate in just one year, but at a steep cost: $ 85 billion in 2021-22, for reach $ 93 billion in 2025-2026.

While the resolutions are not binding – the government ignored a 2018 congress vote to decriminalize all illicit drug use, for example – the political approvals could help inform future government spending and the Party’s election platform. liberal.

The government has said it is preparing to spend up to $ 100 billion this year to revive the post-pandemic economy, even after reporting a record deficit of $ 381 billion in the last fiscal year.

While the idea of ​​a UBI has gained traction in progressive circles – supporters argue that the enormous price of such a program could be offset by the dismantling of existing provincial welfare schemes – academics studying the reduction of poverty are divided on its value.

A 529-page report by researchers at the University of British Columbia, Simon Fraser University and the University of Calgary concluded after a three-year investigation that a basic income for all is not is not the best way to fight poverty and other social problems.

Instead, according to the report, governments should strengthen existing social support programs for vulnerable groups through better assistance for people with disabilities, dental programs and more money to help the working poor pay their rent. A more targeted approach to helping the disadvantaged, as opposed to a universal program like UBI, would do more to lift people out of poverty, the report concludes.

Conservative MP Ed Fast, the party’s finance critic, said prosecuting an UBI would be a “risky and unknown experiment that will leave millions more Canadians behind.”

He said the Liberal Party is trying to “reimagine” the Canadian economy as the country continues to grapple with the pandemic.

“The fact that UBI was supported at the convention this weekend is comparable to that of Justin Trudeau and the Liberals. Instead of focusing on job creation, they are obsessed with implementing policies. risky, costly and untested, ”said Fast.

Delegates approve drug benefit, ‘new green deal’

Liberal delegates also supported other progressive policies, such as creating a national pharmacare program and a “new green deal” to dramatically reduce greenhouse gas emissions.

Members of British Columbia who support the new eco-friendly policies say Canada needs a “10-year national mobilization plan” to reach net zero emissions by 2050 because “a changing climate threatens human life, healthy communities and critical infrastructure ”.

While this proposal is also light on the details, its supporters are calling for an “urgent, transparent and inclusive consultation process” with workers, unions and businesses affected by the switch to cleaner fuel sources. Delegates agreed that there should be a “just transition” for energy workers who will lose their jobs due to the switch to renewables.

Inheritance tax, capital gains increase rejected

At a time when all levels of government are looking for new sources of revenue to offset the costs of the COVID-19 pandemic, Liberal delegates rejected a resolution by the party’s Ontario branch to increase taxes on capital gains.

Currently, when an investment is sold – a stock, a mutual fund, or any one of a number of other assets – 50 percent of any increase in value is taxed as income.

For example, if a person purchases a share of a publicly traded company for $ 20 and resells it for $ 40 at a later date, then $ 10 will be added to a person’s income for tax purposes; the remaining $ 10 is not taxed.

This preferential tax treatment is designed to encourage people to make investments to stimulate economic growth and provide businesses with easy access to capital. Critics argue that it unfairly benefits the wealthy.

The Ontario chapter proposed reducing the capital gains tax exemption to zero, meaning that all investment gains would be taxed as income.

As part of the same proposal, the Ontario chapter imposed an “inheritance tax” on all assets over $ 2 million. This proposal did not specify the rate at which these assets should be taxed, nor how and when such a system would come into effect. Delegates rejected the idea as well as the suggestion to increase the capital gains tax by a 62-38 margin.

“Please make me pay more taxes”

A delegate, Jake Landau, president of the Young Liberals of Don Valley West, said he considered himself an “upper middle class” and believed the current system was biased in favor of the rich.

“I ask everyone, please make me pay more taxes. I want to pay my fair share,” he said.

Another delegate named Linda – who also did not give her last name – said she was concerned that a change in the capital gains tax could open the door for the federal government to tax the sale of main residences.

In the last election, the Conservative Party warned that a Liberal government would seek to take advantage of rising home values ​​by levying a capital gains tax on home sales to raise funds – an accusation the Liberals denied.

Delegates to the Liberal Party’s virtual political convention rejected a call to increase the capital gains tax. (Graeme Roy / The Canadian Press)

Currently, principal home sales are exempt from capital gains tax, meaning homeowners do not have to pay tax on any increase in the value of a home when it is sold. The same rules do not apply to secondary, seasonal or investment properties, which are taxed like other investments.

“What concerns me is that this is a comprehensive resolution,” Linda said. “There are a lot of people who rely on capital gains in their homes to retire and not live in poverty.”

“Long-term care can be a nightmare”

Party members also overwhelmingly supported a political proposal – with 97% in favor – to reform the country’s long-term care home system, which has been hit hard by death and disease throughout. this pandemic.

“The pandemic has shown us that long-term care can be a nightmare,” said an anonymous Liberal delegate. “The seniors will do all they can to stay out.”

The policy calls on the federal government to introduce new legislation to set “applicable” national standards to prevent a repeat of COVID-19 outbreaks in long-term care facilities that have claimed the lives of thousands of people.

Kathleen Devlin of the Senior Liberal Commission said Canadians have been “horrified” by the conditions reported in long-term care homes throughout this health crisis.

Members of the Canadian Armed Forces are shown at Résidence Yvon-Brunet, a long-term care home in Montreal, on Saturday, May 16, 2020, as the COVID-19 pandemic continues in Canada and around the world. (Graham Hughes / The Canadian Press)

She said last summer’s Canadian Armed Forces report on the frontlines of the pandemic “embarrassed us all.” Soldiers reported that residents of some long-term care homes were intimidated, drugged, malnourished, and in some cases left for hours and days in soiled bedding.

“While it is a provincial responsibility to implement it, there must be federal leadership to give all Canadians fairness when they are most vulnerable,” said Devlin. “Sometimes we need a crisis to deal with what we already know.”

According to the resolution, these new standards would cover accommodation conditions, staffing levels, qualifications and remuneration. The proposed legislation would also require greater transparency in how homes are operated “and public accountability through random inspections and annual public reporting”.

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