Federal Government Announces $37B COVID-19 Aid Package Extends CERB, Expands EI and Adds “Recovery” Benefits

On Thursday afternoon, the federal government announced it is extending the Canada Emergency Response Benefit (CERB) by one more month and revamping the employment to allow more people to receive the financial assistance program during the COVID-19 pandemic. 

The new plan released Thursday details on how most people will be transitioned onto EI, though three new temporary benefits are also being established, including a form of paid sick leave. In total, these new financial assistance plans are budgeted to cost at least $37 billion over the next year.

Among the new benefits is a $500-a-week sickness benefit and caregiving benefit for anyone who has to stay home because they’re ill, or because school or daycare is closed.

Changes are also coming in to allow workers to keep more of their benefits even while they’re working, eliminating the earnings cliff created under CERB that acted as a disincentive to work.

Deputy Prime Minister and Canada’s latest Finance Minister, Chrystia Freeland made the announcements today alongside the Minister of Employment, Workforce Development and Disability Inclusion, Carla Qualtrough, as they spoke about Canada’s plans for the next phase of economic recovery. 

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

While the economic reopening has seen millions back on the job, there are still millions of unemployed Canadians, particularly in harder-hit industries that are set to take longer to bounce back from COVID-19’s impact.

Although the CERB was set to run out at the start of the month, as of today, the CERB program will be extended by an additional four weeks running into September. 

After the extension, as of September 27, almost all CERB claimants who qualify for Employment Insurance will be transitioned onto that program as their avenue for financial support once their 28 weeks of CERB runs out.

“With an overall objective to support economic recovery, the announcement follows an approach that provides support to workers while strengthening work incentives, facilitates access to the EI program and enhances equity,” said one senior official speaking with reporters, outlining the new plan.

According to the government, for most individuals, the transitions will be automatic but there will be a “few instances” where applications will need to be filed and those people will be contacted. 

New Changes to the Employment Insurance System Ahead of the CERB Transition

During the press conference today, it was announced that the EI system would be getting reforms which will help open up the criteria for next year to make it so that Canadians with 120 insurable hours across Canada can apply and receive a minimum payment of $400 per week, and a maximum of $573 per week, depending on past earnings. 

The new EI program can be claimed for between 26 and 45 weeks, depending on the time worked prior. 

EI claimants can earn income but will have their benefits adjusted, reducing their benefit by $0.50 for each dollar of earnings. The government is also freezing the EI premium rate for two years, as typically it would be set to increase, raising costs for workers and employers.

The intent of the longstanding program remains: as a financial aid to employees who involuntarily lose their jobs and are actively looking for work.

These changes can be implemented through regulation through interim ministerial orders, though the three new benefits are going to be delivered through legislation, which will have to wait to be tabled until after Parliament resumes on Sept. 23 given the current prorogation.

Three New Benefits: Canada Recovery Benefit, Canada Recovery Sickness Benefit, Canada Recovery Caregiving Benefit

In addition to the changes to the EI program and the extension to the CERB program until September, the federal government also announced three new benefit programs: Canada Recovery Benefit, Canada Recovery Sickness Benefit, Canada Recovery Caregiving Benefit.

These benefits will come to effect on September 27 with the benefits also taxable, meaning that the tax will be deducted from the payments. The three newly announced benefits it is estimated to cost $22 billion. 

Canada Recovery Benefit

The first new benefit program announced is called the “Canada Recovery Benefit” and will be available for 26 weeks to workers who are self-employed, gig or contract workers, or otherwise not EI eligible but still cannot return to work.

To qualify for this $400-a-week program, Canadians must be looking for work and had stopped working or had their income reduced due to COVID-19. Workers will need to repay $0.50 of every dollar earned above an annual net income of $38,000 through their income tax return.

Canada Recovery Sickness Benefit

The “Canada Recovery Sickness Benefit” is the second benefit being created for those who don’t already have paid sick leave through their employer, to make it easier for people to stay home from work when they are sick or have to self-isolate due to COVID-19, without worrying about their income.

This benefit will provide $500 per week, for up to two weeks, which remains the current time frame required for Coronavirus isolation. It cannot be claimed if the employee has paid sick leave through their workplace.

According to the federal government, there are ongoing talks with the provinces and territories to ensure that every worker in Canada who needs it can access 10 days of paid sick leave a year, a concern more important than ever to reduce the spread of the virus by making it possible for anyone who isn’t feeling well to stay home. 

Canada Recovery Caregiving Benefit

The final benefit program set to launch on September 27 is the “Canada Recovery Caregiving Benefit” which will be providing help in the instances where someone needs to stay home to care for a loved one such as a child under the age of 12 or a dependent because schools, daycares, or other care facilities are closed due to the pandemic.

This program offers up to 26 weeks per household, with just one adult per household able to claim the program at a time, and provides $500 a week. It can only be used when facilities are closed and not because people “prefer” to keep their loved ones at home.

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