EI for COVID-19? What we know so far about the new emergency response benefit

Feds unveil Canada Emergency Response Benefit
Speaking to reporters in Ottawa on Wednesday, Canadian Prime Minister Justin Trudeau said that the Canada Emergency Response Benefit will provide CAD 2,000 per month for those whose jobs have been impacted or lost due to the COVID-19 pandemic.

Editor’s note: Global News will be updating this story as more information becomes available. Latest update: March 30, at 12:11 p.m.

The Trudeau government recently unveiled an all-new benefit for Canadians reeling from the economic impact of the coronavirus pandemic: the Canada Emergency Response Benefit.

CERB would deliver $2,000 every four weeks for up to four months to workers who lose their income as a result of COVID-19. The new program combines and replaces two previously announced benefits — the Emergency Care Benefit and the Emergency Support Benefit — and raises the government’s spending on direct financial aid to $52 billion.

READ MORE: Coronavirus support package rejigs benefits for workers hit by pandemic

While CERB was part of the Liberals’ Emergency Response Act, which has already received royal assent, details on the program are still scant. Ottawa expects around four million applications for the new benefit, a source within the Canada Revenue Agency told Global News. The CRA will be administering the program along with Employment and Social Development Canada (ESDC).

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Here’s what we know so far, along with some of the major questions that arise from the information the government has released as of March 26. Global News will be updating this article as more details emerge.

Coronavirus outbreak: Trudeau says Canada Emergency Response Benefit is ‘there for’ Canadians during COVID-19 outbreak
Coronavirus outbreak: Trudeau says Canada Emergency Response Benefit is ‘there for’ Canadians during COVID-19 outbreak

Who can apply for CERB?

CERB will be available to Canadians, whether employed or self-employed, “who cease working for reasons related to COVID-19 for at least 14 consecutive days within the four-week period in which they apply for the payment,” according to the legislation.

To qualify, applicants must be residents of Canada and have had income of at least $5,000 from work or EI or Quebec’s maternity and parental benefits for 2019 or the 12-month period prior to submitting an application.

Eligible Canadians will be able to apply for CERB regardless of whether applicants would also qualify for Employment Insurance (EI), according to a press release by the Department of Finance.

Canadians will be able to access the benefit whether they have lost their income as a result of the economic repercussions of the health emergency or can’t earn an income because they are sick, quarantined, caring for someone with COVID-19 or have had to stop working in order to care for children who are either sick or home from school and daycare.

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Canadians who are still formally employed but not receiving any income would also be able to receive CERB.

“This would help businesses keep their employees as they navigate these difficult times,” according to the Department of Finance.

READ MORE: Nearly 1 million Canadians applied for EI last week

The list of beneficiaries is long but leaves out some Canadians who may have also seen a heavy financial hit from the crisis. Only Canadians who have seen their income reduced to zero qualify for CERB. Workers who have seen a significant reduction in income but are still bringing in some money do not.

“That’s the gap in their program, without a shadow of doubt,” said Lindsay Tedds, a professor of economics at the University of Calgary.

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It remains unclear whether Canadians who would normally qualify for either EI would be able to choose whether to apply for it or CERB.

READ MORE: What will happen to Canada’s housing market amid the pandemic?

The maximum amount Canadians can receive through EI is $573 per week, which works out to slightly under $2,300 every four weeks. For Canadians who meet the maximum insurable earnings cap of $54,200 a year, there would be a financial incentive to apply to EI instead of CERB as traditional employment insurance would be slightly more generous.

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Global News is seeking clarification from the government on this. We will update our coverage as soon as we receive a response.

Nearly 1 million Canadians have applied for EI as coronavirus takes toll on economy
Nearly 1 million Canadians have applied for EI as coronavirus takes toll on economy

How long will CERB run?

The benefit would cover the period from March 15 to Oct. 3, 2020.

How and when can you apply for CERB?

A source within CRA said the agency will begin accepting applications the week of April 6.

The benefit will be available through the CRA’s online “My Account” portal.

Coronavirus outbreak: Trudeau says EI system will be ‘scaled up’ to meet new demand by April 6
Coronavirus outbreak: Trudeau says EI system will be ‘scaled up’ to meet new demand by April 6

On March 26, Trudeau warned about a “text scam” about CERB, urging Canadians to rely on government websites for information about benefit changes.

READ MORE: ‘Shocking and disgusting’ — Tenants face rent increases despite coronavirus crisis

One key question about applications is what kind of documentation workers will be required to provide. Some economists have been calling on governments to prioritize the speed at which emergency benefits will reach households and businesses over making sure that only deserving applicants receive the money.

“This is unprecedented,” Tedds said. “We have people hurting and very, very scared and almost ready to lose their home.”

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“Let’s worry about mistakes and error and fraud later.”

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How quickly will you get the money?

Once they’ve submitted an application, Canadians can expect to receive payments within three days if they choose direct deposit and 10 days by cheque, the CRA told Global News.

Does CERB replace EI?

It does not. CERB, which will be administered by the Canada Revenue Agency and ESDC, will exist alongside EI, which is handled by Service Canada as part of ESDC.

Here’s what we know so far about how the two benefits will co-exist:

  • Canadians who were already receiving EI unemployment or sickness benefits as of March 25 will continue to receive the benefits and should not apply to CERB. This raises the question of whether Canadians who are receiving EI benefits of less than $2,000 a month will get temporarily stuck with the lower benefit. A recent analysis by the Canadian Centre for Policy Alternatives found that 78 per cent of workers who face the most immediate risk of layoff in major cities amid the pandemic would be better off with CERB than EI. Ottawa did say, however, that Canadians whose EI benefits run out before Oct. 3 would be able to apply for CERB if they are still unable to return to work because of COVID-19.
  • Canadians who have applied for EI but whose applications have not yet been processed don’t need to reapply for jobless benefits, the government said.
  • Canadians who qualify for EI can continue to apply for their normal benefits during and after the period covered by CERB.
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Does CERB replace the wage subsidy?

The Trudeau government had previously announced a 10 per cent wage subsidy to help small businesses retain and pay their employees. That measure still stands. Companies would receive a maximum of $1,375 per employee for a total of up to $25,000 per employer.

READ MORE: Ottawa’s wage subsidy is far too low to help small businesses, CFIB says

The prime minister said the government is still looking into more options to help businesses, including programs rolled out in Europe, where some governments are paying wage subsidies of up to 75 per cent to eligible businesses.

The Canadian Federation of Independent Business has been calling on Ottawa to introduce a 75 per cent wage subsidy of up to $5,000 a month per employee.

However, the group said it is “particularly pleased” that Ottawa has indicated employers won’t have to lay off employees in order for them to be able to access jobless benefits through CERB.