End of CERB payments will leave millions of Canadians hurting, report says,

Unless Ottawa amends EI program, many will see their income dry up

Leanne Campbell was working two part-time jobs until COVID-19 hit. In mid-March, the restaurant where she earned her main source of income as a server, closed its doors. So did the clothing shop, where she worked a second job.

When the economy recently opened up again, Campbell went back to work at the store, but the restaurant still hasn’t recalled her.

During the shutdown, Campbell has been collecting the Canada Emergency Relief Benefit (CERB), giving her roughly the same income she made before COVID. The 38-year-old Stoney Creek mother of two expects her last payment this month.

After that, she fears she will be out more than half her pre-COVID income as Ottawa transitions CERB to Employment Insurance (EI) next month. Under the EI rules, Campbell figures she would have her clothing store earnings clawed back. But if she quit that job while she waits to go back to serving, she wouldn’t be entitled to EI because quitting is against the rules for that program.

That puts her among about 2.9 million Canadians who will see their income lost or cut unless Ottawa amends the EI program, says a report by the Canadian Centre for Policy Alternatives (CCPA) released on Monday.

It says that 82 per cent of the 4.7 million Canadians who were on CERB on Aug. 2 will receive less or nothing under the current EI rules. Fifty-seven per cent of those at risk will be women. The majority will be the lowwage earners who have already suffered disproportionately from the COVID-19 recession in sectors such as hospitality, retail, airlines and the arts, said the report’s author, senior economist David Macdonald.

Unless the EI rules change, 2.1 million CERB recipients would be completely cut off. Nearly half of those are still working in a reduced capacity.

“There are 972,000 people who make less than $1,000 a month and therefore can receive CERB, but wouldn’t be able to receive EI, as you have to be completely unemployed with no wage income to get EI,” says the report. The CCPA recommends Ottawa ease the transition to EI, something Prime Minister Justin Trudeau has committed to doing, by taking the following steps:

Create a minimum benefit of $500 a week (the same as CERB) or increase the income replacement rate to 75 per cent of earnings for low-income earners who are eligible for EI.

Speed EI along by offering the first payment on an “attestation” basis, meaning no documented proof of employment status would be required initially, as was done with CERB so people aren’t left without benefits while they gather their employment records.

Alter EI to include gig workers and self-employed Canadians.

Macdonald says the government needs to revamp EI so it incorporates the best elements of CERB.

“One of the upsides of CERB was, because it was so quick and because it was more generous, it likely had a big impact on consumer spending. Lower-income households that would have otherwise dramatically cut back their spending didn’t,” he said.

“Many of the people moving to EI will make substantially less — $200 less a week. Over threequarters of a million will make $300 rather than $500 a week. That will certainly have an impact on their spending. Many of these are in industries that aren’t coming back without a vaccine,” said Macdonald.

There are about 2.1 million people whso don’t qualify for EI because they make more than $1,000 a month or they haven’t met the EI criteria for number of hours worked. The E I rules should be changed to require only 300 hours of work for those whose unemployment term begins after March 15, says CCPA.

Parents who quit to look after youngsters when schools and daycares closed wouldn’t be covered by EI because they weren’t fired or laid off. That relatively small number of 18,000 could grow depending on how school and child care shakes out in the fall, he said.

Macdonald said there were 500,000 people in July who were still officially employed but weren’t getting any hours of work. It could be October before they realize they don’t qualify for EI and gather up the documentation that says they have officially been laid off their jobs, he said.

“CERB was prospective. It wasn’t retrospective so on Aug. 2, people got the payment for August that was meant to go all the way to Aug. 29. On EI, you had to wait all the way to Aug. 29. So the month elapsed then they would pay you the previous month’s payments. That’s another way EI will be slower and harder to access,” said Macdonald.

“One of the upsides of CERB was because it was so quick and because it was more generous.”

DAVID MACDONALD CANADIAN CENTRE FOR POLICY ALTERNATIVES