Canada has a rich history of innovation, but in the next few decades, powerful technological forces will transform the global economy. Large multinational companies have jumped out to a headstart in the race to succeed, and Canada runs the risk of falling behind. At stake is nothing less than our prosperity and economic well-being. The Financial Post set out explore what is needed for businesses to flourish and grow. You can find all of our coverage here.
When I was in my mid-20s, I was fortunate enough to be able to invest my life savings in an income property. The rental income provided a sense of economic security that later enabled me to quit my job and start my own business. I now run an eight-figure global company.
Several other successful entrepreneurs I know were also able to take risks on their business because of the financial and emotional security provided by a guaranteed passive income stream — whether social assistance payments or spousal support.
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The power of basic income to fuel innovation is part of what motivated over 120 Canadian CEOs — representing $2.3 billion in combined annual revenues — to issue a letter criticizing the provincial government’s decision to cancel the Ontario Basic Income Pilot last year. It could also address the critical shift that an ideas economy is bringing to the nature of work.
Over the past 30 years, the offshoring of some jobs and the downsizing of others due to automation has led to a widening income gap. While Canada’s “one per cent” have increased their share of national income by 53 per cent since 1982, those on the bottom half of the wage scale are now earning 28 per cent less.
In Ontario, the percentage of low-income jobs has already doubled since 2001. As automation and artificial intelligence (AI) continue to restructure the way we work, this will accelerate exponentially. Projections suggest robotics could reduce the cost of some types of work to zero. In other words: we will need work more than work needs us.
Many of the CEOs for Basic Income are concerned our governments are unprepared for the dislocation this will create for working Canadians. Poverty may be one result. The toll of low-wage labour on both physical and mental health is another. This could not only add to social welfare costs but also slow economic growth.
Capitalism works best when growth is inclusive. When we all earn more, we all have more to spend, enabling innovation and entrepreneurship in a virtuous cycle. A public-utility-style income support could keep that cycle going even as technology disrupts work as we know it.
Two-thirds of recipients in the Ontario Basic Income Pilot, for example, were already working at low-income jobs. For them, the basic income was a wage supplement — not a substitution — that enabled them to invest in their futures. Some were able to afford the childcare necessary to securing better, full-time work. Others pursued further education and job training.
Last week, the Ontario Superior Court ruled it did not have the authority to consider the application by the participants of the Ontario pilot for judicial review of the experiment’s cancellation. The participants’ court action had argued that the pre-emptive dissolution of the pilot unfairly harmed those it recruited. Now, all Ontarians will lose out on any findings from an investment we had already made.
Basic income is an economic need. That is why I and many other CEOs continue to call for Canada to explore it.
Floyd Marinescu is the CEO of C4Media, which operates a software development news site and organizes conferences around the world. Read the letter signed by 120 Canadian CEO’s at ceosforbasicincome.ca.