Ottawa unveils $37B CERB extension and transition to EI, new benefits

Ottawa has unveiled details of how out-of-work Canadians can expect to access the employment insurance program come the fall. 

Federal officials announced Thursday that the Canada Emergency Response Benefit (CERB) will be extended another four weeks into late September, bringing the maximum payment period to 28 weeks. 

Afterward, on Sept. 27, recipients still out of work will transition to the employment insurance (EI) program, or three new benefits for: self-employed workers not eligible for EI; those who are ill or self-isolating due to COVID-19; and those caring for a child, dependent or family member because schools, daycares or care facilities are closed.

Under the revised EI program, which will be in place for one year, the unemployed can expect generally more generous rates and less stringent requirements compared to the pre-pandemic program.

Recipients are eligible for a minimum regular benefit of $400 per week for between 26 and 45 weeks, or $240 per week for extended parental benefits. EI eligibility Canada-wide will also be effectively set at 120 insurable hours worked in the past year, equal to 3.5 hours of full-time work a week. 

Normally, eligibility requirements are determined by the number of insurable hours one has worked based on the unemployment rate in different regions across Canada, ranging from 420 to 700 hours. Benefit amounts normally equal 55 per cent of one’s income, to a maximum of $573 per week, and are taxable. 

On paper, the insurable-hours requirement is set at 420 hours for regular benefits or 600 hours for special benefits based on an unemployment rate of 13.1 per cent for all EI economic regions. However, EI claimants will receive a one-time credit of 300 insurable hours for claims for regular or work-sharing benefits or a credit of 480 insurable hours for claims for special benefits. The credits will be available for one year and will be retroactive to March 15, 2020. 

Claimants may also earn income and have benefits adjusted through rules that reduce their benefit amount by $0.50 for each dollar of earnings.

EI premium rates, meanwhile, will be frozen for two years.

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

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

New benefits for self-employed, caregivers, the ill

The federal government has also unveiled the Canada Recovery Benefit for those who are self-employed and not EI-eligible, including workers employed in the “gig” economy. The benefit provides $400 per week for up to 26 weeks, and applicants will be required to attest on their form that they’ve lost income and are available and actively looking for work.

Workers can still earn income while receiving the benefits, but workers will need to repay $0.50 for every dollar earned above an annual net income of $38,000 at tax time.

The Canada Recovery Sickness Benefit will provide workers who are ill or self-isolating due to COVID-19 $500 per week for up to two weeks.

Similarly, the Canada Recovery Caregiving Benefit is for workers who must miss work to stay home to care for: a child under the age of 12, a family member, or a dependant. They can access $500 per week for up to 26 weeks per household. 

A school or child-care facility must be closed, but if a medical professional recommends a child stay home, the caregiver would be able to access the benefit. 

Payments under the three benefits are made in arrears, meaning after the claim period. Like the CERB, they will all require attestation that they qualify.

Apply again or automatic?

Most Canadians who received CERB specifically through Service Canada, and still need it, will be automatically transitioned to EI regular benefits once the emergency benefit expires. In some instances, Canadians receiving CERB through Service Canada will need to apply for EI benefits. 

Canadians who were EI-eligible before the pandemic hit and received CERB through the Canada Revenue Agency, meanwhile, will need to apply for EI benefits from Service Canada. 

Applicants will apply through the usual EI online application and be required to submit bi-weekly reports to show eligibility. 

In mid-September, a web page for the three recovery benefits will be established. Online applications will open in October.

Four million still on CERB

Roughly four million Canadians are still accessing the CERB, with three million to be transitioned to EI, and the remaining one million expected to move to the recovery benefit, senior federal officials briefing journalists on the changes said Thursday.

The officials described EI as a “simplified” version that will make it easier for Canadians who need it to access it.

The total cost of changes will be $37 billion: $8 billion for the extension of the CERB, $22 billion for the recovery benefit over its one-year duration, and $7 billion in incremental costs for the EI program.

The CERB provides recipients who have lost income due to the COVID-19 pandemic $2,000 every four weeks. Those moving to EI regular benefits will receive $400 less over the same period.

More than eight million Canadians have accessed the CERB to date. It’s the most expensive pandemic emergency program, having paid out nearly $70 billion since March. 

Legislation will be needed to enact the three new benefits. Qualtrough said the Liberal government will introduce legislation to enact the benefits the first week of when Parliament resumes Sept. 23.

She said the EI system, which faultered in March when it received a wave of claims from millions of Canadians suddenly out of work, will be resilient this tine.

“We have spent the last three and a half, four months preparing the system for this very moment,” she said.

“I am absolutely confident now, after having automated a bunch of our processes, simplified others and streamlined others, that the EI system is more than ready to take in the approximately three million people we believe will go into the system at the end of September.”

This story was last updated on Aug. 20 at 4:30 p.m.