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Liberals outline change from emergency benefit to EI, new benefits

Friday, August 21, 2020 @ 12:40 PM | By Terry Davidson

In its continued response to COVID-19, Ottawa is extending the Canada Emergency Response Benefit by an additional month before switching to a temporary $37-billion support system featuring loosened rules for employment insurance and a plan to introduce three new benefits programs.

This latest move in the Canadian government’s struggle to deal with the economic fallout of the health crisis was announced at an Aug. 20 press conference by Deputy Prime Minister and Finance Minister Chrystia Freeland and Minister of Employment, Workforce Development and Disability Inclusion Carla Qualtrough.

Starting Sept. 27, the new Employment Insurance (EI) and benefits programs, which would last for a year, will signal the end of the Canada Emergency Response Benefit (CERB), a $500-per-week program launched in early April to help those whose employment was significantly impacted by the health crisis.

To date, the CERB, which will now cease as of Sept. 26, has paid out just over $69 billion in benefits to 8.6 million people. Just over four million have returned to the workforce.

EI will now be allowed for many who would otherwise be deemed ineligible.

Government documents state that the new “simplified” EI will catch those who “have not been able to accumulate enough hours to qualify for EI benefits as workplaces remain closed or [have] scaled back operations” due to the pandemic.

To qualify, applicants now must have accumulated only 120 insurable work hours over the last year and will receive a minimum weekly benefit of $400 for at least 26 weeks. (Under regular EI, applicants need 420 to 700 insurable work hours.)

Recipients will still have to be looking for work to continue getting benefits. They will also able to accept some outside earnings during this time, but for those who do, their EI will be clawed back 50 cents for every dollar earned.

“EI is critical to our economy,” said Freeland. “Canadians rely on this program to get through difficult times when they’ve lost their jobs through no fault of their own. … Because of the COVID-19 pandemic, many workers have lost their jobs or worked greatly reduced hours which may make them ineligible for EI. We recognize that, so we’re going to make it easier for Canadians to get EI support.”

Ottawa is also freezing existing EI premium rates for both employees and employers for the next two years at $1.58 and $2.21 per $100, respectively.  

“This measure … constitutes a significant economic boost,” said Freeland. “The total savings to workers and employers, thanks to this freeze, are estimated to be greater than $2 billion over two years. This will make it easier for Canadian businesses and for Canadian workers to get back to work in this difficult time. We want to encourage … businesses to hire back their workers rather than to spend their money paying higher EI premiums.”

The Liberals are also planning to propose legislation that would create three new benefits programs for those who need help but fall further outside EI eligibility.

The Canada Recovery Benefit (CRB) would mean $400 per week for up to 26 weeks for those self-employed and those whose income has dropped and who have not returned to work due to the pandemic.

The Canada Recovery Sickness Benefit (CRSB) would give $500 per week for up to two weeks for those not working due to being sick or having to self-isolate.

The Canada Recovery Caregiving Benefit (CRCB) would provide $500 a week (per household) for those unable to work because they are caring for a child, dependent or disabled person due to the closing of schools, daycares, day programs or other such facilities. Like the CRB, this would be for up to 26 weeks.

Qualtrough said they “intend to introduce legislation in the first week of our return to Parliament to create these benefits and ensure that Canadians have the financial support they need.”

As part of what has been a turbulent week for Canada’s Liberal government, Prime Minister Justin Trudeau prorogued Parliament on Aug. 18, stating that a new throne speech was needed as a reset and to “embrace bold new solutions” to future challenges thrown up by the health crisis.

Critics, however, say Trudeau dissolved Parliament as a way of stifling House of Commons committee investigations going on in relation to the WE Charity conflict of interest scandal, which involves both Trudeau and his former finance minister, Bill Morneau.  

Parliament will resume Sept. 23.

Prorogation came the same day Freeland was named new finance minister, replacing Morneau, who resigned the day before.  

Morneau and Trudeau continue to sit at the centre of controversy after it was discovered they failed to recuse themselves from a cabinet decision to award a massive student grant program to WE, even though both men had family members who had benefited financially from the organization.

The Conservative Party of Canada was quick to jump on the new supports laid out by Freeland and Qualtrough.

“Today’s announcement makes it clear that Justin Trudeau has no plan to help Canadians get back to work or to restart our economy,” said Tory employment critic Dan Albas and finance critic Pierre Poilievre in a statement. “Shuffling Canadians between programs is not a plan. It is unacceptable that the Trudeau government announced these changes days after locking out MPs and shutting down Parliament, to block investigations into their WE scandal. Canadians have serious questions about this transition and how it will affect them. They deserve transparency and clear answers.”

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