New $37B COVID-19 aid package extends CERB, expands EI and adds 'recovery' benefits

New benefits will help self-employed and gig workers and pay for 10-day sick leave

CBC.ca
August 21, 2020
Kathleen Harris

The federal government is extending the Canada emergency response benefit (CERB) by one more month and revamping the employment insurance program to allow more people to receive financial assistance during COVID-19.

The suite of benefit reforms, aimed at helping Canadians through the transition as the economy gradually reopens, is expected to cost $37 billion.

Measures include greater flexibility on the work hours required for EI, making it easier for people to qualify for a one-year period.

Deputy Prime Minister and Finance Minister Chrystia Freeland and Employment Minister Carla Qualtrough announced the new measures during a news conference in Ottawa Thursday afternoon.

"We're doing our very best to support all Canadian workers and leave no one behind," Qualtrough said.

CERB, which has already paid out more than $69 billion to more than 8.6 million recipients, will now be in place until Sept. 27, extending the program from six months to 28 weeks.

CERB pays people $2,000 a month.

Canadians who were already eligible for EI will transition to that program when CERB winds down, while those who don't qualify can apply for new "recovery" benefits.

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Self-employed or gig workers, for example, can apply for a benefit of up to $400 a week for up to 26 weeks if they have stopped working or had reduced incomes due to COVID-19.

Under the new regime, they can continue to earn money, but will be required to repay 50 cents of every dollar earned above $38,000.

Sick leave benefit

A second new benefit will provide 10 days of paid sick leave to any worker in Canada who falls ill or has to self-isolate due to COVID-19. That will provide $500 a week, and a claimant can't claim this benefit and another sick leave payment at the same time.

That program was negotiated with the provinces and territories under an agreement to restart the national economy safely.

A third benefit will support Canadians who must stay home to care for a child under 12 or another dependent because their school, daycare or other day program facility is shut down due to COVID. People who choose to keep their kids home even though the facility is open will not qualify, unless they provide proof there is a medical reason to do so such as an immunodeficiency disorder.

The three new recovery benefits, which will be taxed at payment, are expected to cost $22 billion. The extension of CERB another $8 billion and added EI costs are pegged at $7 billion, for a total of $37 billion.

Applications for the new recovery benefits are scheduled to open in October, with payments flowing in three to five days.

But the recovery benefits require parliamentary approval, and Parliament is currently prorogued until Sept. 23, when the House of Commons will begin a new session with a speech from the throne crafted by the Liberal government.

Package 'the right thing to do': Freeland
Prime Minister Justin Trudeau has said the suspension of Parliament will allow the government to focus on its post-pandemic economic recovery plan. Because the mandate has changed significantly since last fall's election, Trudeau said it was also important to get a vote of confidence on the government's agenda from the House of Commons.

Asked by a reporter if the government was showing contempt for Parliament by forcing a confidence vote before the benefits could flow, Freeland said the package is the "right thing to do for Canadians" and the other parties will have an opportunity to debate the plan.

"That is a really democratic approach and that's where we're taking it," she said.

Liberals letting Canadians down: Conservatives

Conservative employment critic Dan Albas and Conservative finance critic Pierre Poilievre issued a joint statement calling it "unacceptable" that the Liberal government announced the changes just days after shutting down Parliament.

"Canadians have serious questions about this transition and how it will affect them. They deserve transparency and clear answers," it reads.

"Millions of Canadians are still unemployed and eager to return to work. Businesses want to reopen and welcome back staff and customers. But instead of fixing their programs and outlining a plan to restart our economy, the Trudeau Liberals continue to let Canadians down."

The NDP's employment critic Daniel Blaikie also criticized the timing, noting the government waited until CERB had almost run out before making today's announcement. Now with Parliament suspended, Canadians will have to wait another month to see if what the Liberals are promising will actually be delivered, he said.

"We are glad that the government listened to us on paid sick leave and extending CERB until the end of September, but we're concerned that, instead of making desperately needed long-term changes to EI to help all Canadian workers, these changes are temporary," Blaikie said.

In a statement, Bloc Québécois Leader Yves-François Blanchet said the content of the plan seems to meet the party's demands, but "this legislation should have been passed before the prorogation of Parliament."

"I warn the prime minister against the temptation to take workers and businesses hostage to force the adoption of the speech from the throne," Blanchet said.

EI changes a 'disincentive': CFIB

The Canadian Chamber of Commerce welcomed the fact the measures were only for one year, and said the focus should be to safely restart the economy.

"Making these changes permanent would have seriously strained the government's fiscal capabilities. We continue to advocate a growth-focused plan that will unlock economic capacity, fuel job creation and promote new business investment," said chief economist Trevin Stratton in a statement.

"While we support the need to assist families and individuals through the current crisis, the Canadian Chamber believes our priority must be getting Canadians safely back to work and ensuring the country's long-term prosperity."

The Canadian Federation of Independent Business (CFIB) also urged the government to make sure the EI expansion measures are temporary, warning that any permanent step could have "massive unintended consequences" during ordinary times.

CFIB president Dan Kelly said the the biggest concern for small business owners is that some workers will now be able to collect EI benefits for up to 26 weeks after showing only 120 hours of work over the past year. 

"This is just too low a bar and will serve as a disincentive for many part-time workers to return to their pre-COVID employment," he said. "I expect that retail, hospitality, arts and recreation and service sector businesses --the very sectors hardest hit by the economic effects of COVID-19 --will struggle to bring back their part-time workforce. This will slow Canada's economic recovery."