New $37b COVID-19 Aid Package Extends CERB, Expands EI and Adds ‘Recovery’ Benefits
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. 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 on August 20.
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. 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.
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.
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.
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.
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.
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.
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.
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.”
US/Canada Border Closure Extended
The federal government will extend the Canada-U.S. land border closure for another 30 days until Sept. 21, Public Safety Minister Bill Blair said on August 14. The closure to non-essential travel has been in place for months, but with caseloads still high in many U.S. states, the two governments have mutually agreed to continue restricting movement across the world’s longest international border.
The closure has resulted in a dramatic drop in traffic between the two countries although essential workers — like truck drivers and health-care professionals — are still able to cross by land despite the restrictions. Canadians are still able to fly to U.S. destinations.
The federal government has also moved to curb the movement of Americans through Canada who are ostensibly on their way to Alaska. U.S. travellers destined for the northern state have been limited to five crossings in Western Canada and they must commit to taking a direct route.
Dr. Theresa Tam, the chief public health officer of Canada, says the government will continue to monitor epidemiological data on both sides of the border before making a decision to open the country to more U.S. travellers. Tam said she didn’t want to see a spike in cases related to the U.S. after Canada has been able to flatten the infection curve with aggressive public health measures.
Brian Higgins, a Democratic congressman for the New York district that includes Buffalo and the Niagara area, said he was disappointed but not surprised that the border closure was extended. “I have been working with Canadian officials at the federal level for several months toward the goal of getting a mutually agreed-to plan to open the border or, short of that, expanding the category of who is an essential traveller,” said Higgins, who was among nearly two dozen members of Congress to sign a letter in July calling for a plan to reopen the border.
“But I have come to realize that the Canadian federal government response to COVID-19 was early, strong and united. The American federal government response was slow, chaotic and adversarial.”
Higgins said he doesn’t think Washington wants to keep the border closed but doesn’t have much choice.
Meanwhile, he said the border closure is having an impact on his district. “We have, in Buffalo and western New York, two professional sports franchises — the NFL Buffalo Bills, the NHL Buffalo Sabres — highly dependent on the Canadian season ticket-holders for those two franchises. Forty-five percent of our business at the Buffalo-Niagara international airport is citizens from Canada — by and large from Ontario. Our retail economy is highly dependent on the Canadian shopper. Canadians spend $10 million a year on health care in western New York,” he said. “All of this has obviously come to a screaming halt.”