The federal government’s $500-a-week COVID-19 benefit program will be extended by four weeks.
Federal Employment Minister Carla Qualtrough made the announcement at a press conference Thursday (Aug. 20).
The Canada Emergency Response Benefit (CERB) began in March. This is its second time the benefit has been extended. It is now expected to expire on Sept. 27, when changes to a new “simplified” EI system are scheduled to come into effect.
Qualtrough said she is “absolutely confident” that the new EI system will be able to handle the approximately three million people expected to qualify for the benefit once CERB expires. There are 4.5 million people currently on CERB.
“If there’s anything this pandemic has shown us, it is that our EI system hasn’t kept up with the way work has evolved and we now have a chance to fix that for the better,” Qualtrough said.
Once CERB expires, a new $400-a-week benefit is expected to come into effect for those not eligible for EI, as well as a $500-a-week benefit for caregivers or sick Canadians.
The $400-a-week recovery benefit will allow recipients to make up to $38,000 on top of the recovery benefit, either through traditional work or self-employment. For every dollar earned on top of the $38,000, recipients will have to repay 50 cents up to the total amount of benefit they received. This benefit will last for 26 weeks.
Finance Minister Chrystia Freeland said that although the caregiving benefit was for all caregivers, it would be crucial in helping women throughout the economic crisis created by the pandemic. Women have been hit hard by the pandemic, with a University of B.C. study showing pre-existing gender pay gap creating an incentive in many households for fathers to remain in the workforce. The most recent data on the pay gap shows that women earn 87 cents for every dollar earned by men in Canada.
The caregiving benefit would apply to those who must stay home with:
- a child under age 12 due to the closures of schools or daycares because of COVID-19
- a family member with a disability or a dependent because their day program or care facility is closed due to COVID-19
- a child, a family member with a disability, or a dependent who is not attending school, daycare, or other care facilities under the advice of a medical professional due to being at high-risk if they contract COVID-19.
As part of a new proposed one-year simplified EI system, anyone eligible for EI will get at a minimum of $400 each week (to match the recovery benefit) for at least 26 weeks. Recipients need to have worked 120 hours to qualify, below current EI requirements of 420 and 700 hours of insurable employment. This is expected to cover contract, self-employed and “gig” economy workers.
However, the new program can only be approved once Parliament is back in session, after it was prorogued by Prime Minister Justin Trudeau until Sept. 23. Qualtrough said she was not worried about working with opposition on the new benefits system. She said the government chose to announce details Thursday, more than a month before Parliament returns and CERB expires, to give Canadians “certainty” about the weeks and months ahead.
Altogether, the benefits will cost $37 billion; $8 billion to extend CERB (currently at $80 billion), $22 billion for a “relaxed” EI system and $7 billion in additional costs to the EI. The costs are for one year, but are dependent on the course of the pandemic and how the labour market rebounds from historic job losses.
Since mid-March, the CERB has paid almost $69.4 billion in benefits to 8.61 million people, of which 4.1 million have since returned to the labour market.
– With files from The Canadian Press
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