End of CERB ‘a little scary’

Transition to EI could leave thousands of Ontarians worse off, think tank says

Many of Southwestern Ontario’s tens of thousands of unemployed could be in for a rude awakening next month when Canada’s main COVID-19 relief program ends.

Under pressure to rein in costs and get people back to work, Ottawa is ending its Canadian Emergency Response Benefit, or CERB, which paid $2,000 a month to those who lost their jobs because of the pandemic, and shifting them instead onto Employment Insurance (EI).

The Canadian Centre for Policy Alternatives, a left-leaning think tank, estimates the switch will leave more than 1.2 million unemployed Ontarians worse off.

Many recipients of the fewstrings-attached CERB — the self-employed and those making as much as $1,000 a month, for example — aren’t eligible for EI.

Others, who were in low-paying work before the pandemic struck, are likely to find they’ll get less, in some cases much less, under EI, which is tied to how much a person earned before losing their job and pays a maximum of $573 a week

“The biggest challenge will be for people that crash out of the system entirely,” leaving CERB and left behind by EI, said David Macdonald, a senior economist with the think-tank who crunched the numbers.

His data suggest most people transitioning to EI will bump down to about $1,200 a month, a dramatic drop from the $2,000 a month under CERB.

More than 8.5 million Canadians stampeded to CERB as job losses during the pandemic mounted.

Winding down the program, which is expected to end up costing $80 billion, has left many unemployed people anxious and unsure what to expect five months into a pandemic with the unemployment rate still in the double digits.

Just ask Craig Wonnell of Embro, near Woodstock. He’s been on CERB and expects to go onto EI while looking for work, but isn’t sure what benefits he’ll qualify for.

“It’s a little scary and unnerving,” he said.

Making ends meet on CERB has been challenging, said Wonnell, who used to work in sales and marketing for retirement homes. He said he’s fortunate his wife has returned to work, but he’s still concerned about his EI benefits.

“It’s a tough row to hoe at this point ... it becomes a real struggle.”

Only about 600,000 CERB recipients in Ontario will be eligible to switch to EI, Macdonald estimates, and those who do, he says, are likely to get much less.

Almost 3.4 million Ontarians applied for CERB through the duration of the benefit.

Big-city Southwestern Ontario, like much of Canada, was clobbered by the COVID -19 pandemic, with jobless rates shooting as high as 12.6 per cent in London and 16.7 per cent in Windsor.

Big-city rates have since come down, the latest July figures show. London now sits at 10.5 per cent unemployment, with 28,000 people jobless, and Windsor at 12.5 per cent, with 21,000 unemployed.

Monday, Ottawa announced temporary changes to the EI program that will see more Canadians eligible for the benefit, extending the minimum eligibility period to six months.

EI benefits are typically calculated based on the unemployment rate of a given economic region, which determines the minimum number of hours needed to be eligible and how long someone can claim benefits.

The Huron economic region, which includes Chatham-kent, Lambton and parts of Essex and Elgin counties, will follow its unemployment rate of 13.8 per cent for calculating EI premiums.