CERB claimants topped number of jobless by a million, stats show
When Prime Minister Justin Trudeau was asked about the possibility of widespread fraud in the government’s emergency benefits program, he made a compelling suggestion: just look at the unemployment numbers.
The vast swath of Canadians rendered jobless by the pandemic made it imperative to dispense money quickly and with few questions asked, he said last Thursday.
Yet those figures raise questions about who exactly is getting the Canada Emergency Response Benefit (CERB).
Statistics Canada’s labour-force survey for last month, completed April 18, points to three million people having lost their jobs and another 2.5 million working less than half their normal hours since the pandemic started — 5.5 million in total.
But by April 19, the government had received CERB claims from 6.7 million people, a difference of more than a million people.
Economists are divided about what that means. Some suggest it’s simply a statistical anomaly, the employment numbers not lining up chronologically with CERB stats.
“It’s close enough that it’s likely a timing issue,” said David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives.
Others believe it’s at least partly explained by Canadians taking advantage of a wide-open benefits scheme, legally or not.
“The capacity for abuse or opportunistic behaviour in this program is enormous,” said Philip Cross, a former Statistics Canada economist and fellow at the Macdonald-laurier Institute. “If you advertise that you’re going to be approved — no questions asked — you’re going to get pensioners applying for it.”
At the very least, the statistics gap suggests there is still much to learn about one of the priciest government aid programs ever unfolded in Canada, which has dispensed $35 billion in a little over a month.
CERB provides $2,000 a month to people who “have stopped working” because of the pandemic, so long as they made $5,000 within the previous 12 months and did not quit voluntarily.
The program has widespread, multi-partisan support as a way to help Canadians struggling to make ends meet after the economy was effectively closed down nationwide to help contain COVID-19.
But there’s been increasing focus in recent days on whether the government could have done more to prevent waste.
Guidance memos sent to Employment and Social Development Canada employees — copies of which were obtained by the National Post — advise them to essentially ignore potential abuse, and to approve payments even for people who quit their jobs voluntarily or were fired for cause, seemingly in contradiction of the rules.
There’s also anecdotal evidence of cheating, or legal use of the program that seems at odds with its emergency-relief purpose.
One source familiar with the system said Tuesday people who have reported no income for years — likely because they were working under the table — are routinely getting CERB.
Mortgage broker Ron Butler says his company discovered recently that a client about to buy a new house had received a CERB payment even though he was fully employed.
The client said his two cousins had recommended applying for the handout, as they had done. But it was fraud, which Butler’s company had to report to the bank. Which in turn cancelled the man’s mortgage.
“His reaction was extreme disappointment,” said the broker.
Butler emphasized there are many Canadians who “desperately need” CERB, but said he’s seen other instances of questionable use of the program.
A friend with a $2.5-million house and $3 million in liquid assets had to close her business because of the lockdown and, as an experiment, applied for CERB. A $2,000 payment appeared in her account the next day. Personal assets have no bearing on eligibility for CERB or regular Employment Insurance.
The most recent employment data are based on the survey Statistics Canada conducted from April 12 to 18, showing that 5.5 million had lost their jobs or were making less than half their usual income since February.
As of April 19, 6.73 million Canadians had applied for CERB and $19.8 billion had been paid out. The number of applicants has since jumped to almost 8 million.
The rapidly changing employment landscape means the Statistics Canada figures likely could not keep up with the growing jobless ranks — and CERB claims, said Macdonald.
He acknowledged there is undoubtedly some fraud occurring, but said applying the usual safeguards would have been disastrous.
“You probably could have caught that one out of a hundred that’s trying to defraud the system,” he said. “But the trade-off would be that 99 legitimate applicants didn’t get their money for a month-and-a-half and therefore had to go to a food bank.”