As the fall approaches, federal COVID-19 relief measures are slowly wound down and the economic recovery plods along at a glacial pace with a potential pandemic second wave looming large, Ottawa understood that Canadians would need additional financial assistance in the months ahead. It delivered a costly new aid package last week that includes significant changes to the Employment Insurance program, with the long-term fiscal consequences shoved to the backburner—at least for now.
The federal government is extending the Canada Emergency Response Benefit (CERB) by four weeks through the end of September, 2020, for a total of 28 weeks. At that point, eligible recipients will be transitioned to an expanded Employment Insurance program designed to provide relief to those unable to find work, or who can’t work due to COVID-19-related illness or caregiver obligations.
The $37 billion CERB transition plan will see Employment Insurance benefits enhanced—and extended to gig and contract workers who otherwise may not qualify—along with the creation of three new temporary Employment Insurance benefits: the Canada Recovery Benefit, the Canada Recovery Sickness Benefit and the Canada Recovery Caregiving Benefit.
Under the enhanced EI measures, beginning September 27, 2020, eligible Canadians will receive up to $400 per week, or $240 per week for extended parental benefits. EI claimants who work while receiving the benefit will have their benefits reduced by $0.50 for every dollar earned.
Individuals with at least 120 hours of insurable work will qualify with a temporary credit of either:
- 300 insurable hours for those claiming EI regular benefits
- 480 insurable hours for those claiming EI special benefits (maternity, parental, sickness, compassionate care, and family)
In addition, the EI premium rate for employees will be frozen for two years at the 2020 rate of $1.58 per $100 of insurable earnings. The rate for employers will remain at $2.21 per $100 of insurable earnings over the same period.
Those ineligible for EI benefits may qualify for the new programs. Here’s how they’ll work:
Canada Recovery Benefit (CRB)—Workers who are self-employed or ineligible for EI (such as gig or contract workers) that are looking for work, but in need of income support due to COVID-19, would receive $400 per week for up to 26 weeks. The benefit would be available to Canadian residents aged 15 years and older, who have stopped working or have seen their income reduced due to the pandemic, earned at least $5,000 in 2019 or in 2020 and have not quit their job voluntarily. The benefit would be in effect for one year from September 27, 2020.
Canada Recovery Sickness Benefit—Those eligible—including Canadian residents aged 15 or older, employed or self-employed workers and individuals who earned at least $5,000 in 2019 or 2020—would receive $500 per week for up to two weeks. The benefit would be available for up to one year from Sept. 27, 2020, to workers who are ill or required to self-isolate due to COVID-19.
Workers with paid sick leave through their employer would not be eligible for the benefit.
Canada Recovery Caregiving Benefit—The new program would be available for up to one year starting on September 27, 2020, and would provide $500 per week for up to 26 weeks per household. The measure is available to employed or self-employed Canadian residents aged 15 and older who earned at least $5,000 in 2019 or in 2020.
According to the criteria, qualifying applicants will be individuals who “have been unable to work for at least 60 per cent of their normally scheduled work within a given week because of one of the following conditions:
They must take care of a child who is under 12 years of age on the first day of the period for which the benefit is claimed:
- because their school or daycare is closed or operates under an alternative schedule for reasons related to the COVID-19 pandemic;
- who cannot attend school or daycare under the advice of a medical professional due to being at high risk if they contract COVID-19; or
- because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic; or
They must provide care to a family member with a disability or a dependent:
- because their day program or care facility is closed or operates under an alternative schedule for reasons related to COVID-19;
- who cannot attend their day program or care facility under the advice of a medical professional due to being at high risk if they contract COVID-19; or
- because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic;
They must also not be in receipt of paid leave from an employer in respect of the same week; and must not be in receipt of the CERB, the EI Emergency Response Benefit (ERB), the Canada Recovery Benefit, the Canada Recovery Sickness Benefit, short-term disability benefits, workers’ compensation benefits, or any EI benefits or Quebec Parental Insurance Plan (QPIP) benefits in respect of the same week.”
While the EI changes can be implemented by the federal government immediately, the new benefit programs will require parliamentary approval. Parliament is set to resume September 23rd, leaving the Trudeau government only a tiny window to pass the legislation before the CERB program is scheduled to end.
If your organization requires assistance with the CERB or any other COVID-19 relief measure, please contact a member of our team.
Armando Iannuzzi, Co-Managing Partner