Clawback of support a shock for workers
Seeing EI payments reduced raises questions of fairness
When Jesse James Laderoute went to check his EI deposit last week, it wasn’t quite what he’d been expecting.
“I thought it was going to be $1,000, but it was only $750,” said the Toronto bartender, who was transitioned to EI after the Canada Emergency Response Benefit ended at the end of September.
When he figured out why the deposit was smaller, he got angry. He’d managed to pick up a shift or two to bring in an extra bit of money to supplement EI, and reported the income to Service Canada. For every dollar he’d earned, 50 cents of his EI benefit had been clawed back. “I’m putting myself at risk of catching this virus for $6.10 an hour. It really doesn’t seem worth it,” said Laderoute, referring to his income after the clawback is factored in.
He earns the server’s minimum wage of $12.20 an hour, which is lower than the standard minimum wage of $14.25 per hour because servers and bartenders typically earn tips. With the shutdown of indoor dining, and the looming end of patio season, those tips have all but disappeared, Laderoute said.
“We’ve basically become a bottle shop selling for takeout, and people don’t really tip on that,” Laderoute said.
While the clawback is a standard EI rule, Laderoute figured things would be different during the COVID-19 pandemic. Self-employed and freelance workers collecting the Canada
Recovery Benefit (CRB), after all, won’t see any clawbacks until after they hit $38,000 per year.
“Everyone I know thought it was the same thing as CRB — that you could earn $38,000 before they clawed anything back,” said Laderoute. “I would’ve been happy if it was the $1,000 a month that I could earn while I was on CERB.”
The differing treatment for workers on EI and CRB came as a surprise to many workers, and frustrates labour advocates and some opposition MPs and economists, who say it doesn’t make sense — and isn’t fair.
“It’s a matter of equity. Someone who’s working freelance or on contract shouldn’t be getting a better deal than someone who’s employed,” said David Macdonald, chief economist at the Canadian Centre for Policy
Alternatives.
“That’s a pretty large disparity between those two programs, and they should harmonize it at the higher rate.”
Given that many business organizations have criticized COVID-19-related income supports as being so generous that it made it tempting for workers not to go back to their jobs, the immediate EI clawback is even more puzzling, said Deena Ladd, executive director of the Workers Action Centre. It’s less tempting to go back to work during a pandemic, after all, if half of every dollar you earn gets clawed back from your benefits, she said.
Ladd says the federal government should give workers collecting EI the same ability to earn income without clawbacks as those on CRB. “I think they should make it $38,000 for everybody,” said Ladd.
While applauding the federal government’s creation of CRB to help people who wouldn’t be eligible for EI — freelance, selfemployed and contract workers — Ladd suspects that in its haste to get the program up and running, the differing treatment may have simply been overlooked.
“I think it’s just a massive oversight,” said Ladd, pointing out that the benefits paid under EI and CRB are equal — at least for most workers. CRB pays $500 per week, while EI pays 55 per cent of a worker’s standard salary, with a minimum payment of $500 and maximum of $574.
“The fact that they’ve equalized the benefits is a good step,” Ladd said.
Daniel Blaikie, the federal NDP critic for employment, workforce development and disability inclusion, blasted the difference between the way EI and CRB treat extra income.
“I really don’t see a valid reason for it. People shouldn’t be penalized because they qualify for EI,” said Blaikie, MP for Winnipeg’s Elmwood-Transcona riding.
Blaikie suspects the biggest reason for the disparity is that the government doesn’t want to make significant changes to a permanent program like EI.
A spokesperson for Carla Qualtrough, the federal minister of employment, workforce development and disability inclusion, defended the government’s assistance for workers during COVID-19. In addition to boosting the minimum EI payment to $500 and reducing the minimum number of hours worked to qualify for EI, the government also created CRB, as well as caregiver and sickness benefits. While CRB expires Sept. 25, 2021, people can choose which 26 weeks they’ll collect it for.
“Together, these measures offer the flexibility Canadians need during this next phase of economic recovery, such as working while on claim, but also as the COVID-19 pandemic continues to impact our labour market,” said Qualtrough’s press secretary, Marielle Hossack. “We know that there is still a long way to go and that many Canadians continue to need support during this difficult time and we will continue to be there for them, no matter what.”
Blaikie, meanwhile, points out that the tweaks to EI didn’t need to go through debate in the House of Commons, something he believes at least partly explains the EI-CRB disparity.
“This was the only one that didn’t need legislation, so it’s the one where there really wasn’t an opportunity for Parliament to debate and push for changes,” Blaikie said.