Canadian Politics Today

How exactly do you think that translates into money for people to sit around loafing?

Exactly the way it did in the 20th century.  I don't mind debating you but you're asking some elementary questions here.  Do you not know how EI and Welfare came about ?  I'm not saying this to call you out or insult you but you honestly seem to be asking questions about well-known points of economic history.

Let's say I own a business, and I borrow money to buy some machines which then let me use fewer employees. This increases my profits somewhat, but probably not hugely. Certainly the cost savings would not translate into enough money to pay those now unworking employees a GBI.

Your example is incorrect.  Look on a macro level.  If unemployment soars 10% due to automation then there is definitely a savings of more than those salaries.  The idea is that on a macro level, efficiency savings are spread around the economy.