The coronavirus pandemic has attracted a historic response from the federal government, with Ottawa pledging around $200 billion to rescue the economy. But across the country, Canadians who already didn’t have a job when the pandemic struck are wondering what support, if any, they’ll be able to access.
The Trudeau government is rolling out a 75 per cent wage subsidy to help employers keep workers on payroll through the crisis. Those who’ve already lost their income can turn to the new Canada Emergency Response Benefit (CERB), which will provide $2,000 a month for up to four months.
Meanwhile, those who are already receiving employment insurance will continue to do so and be able to transition to the CERB if they’re unable to find work when their benefits run out due to the health emergency, according to the Department of Finance.
It remains unclear, however, whether some of those who were already unemployed before the onset of the crisis and students about to graduate will be able to access the emergency income support.
“It’s a huge oversight,” says David Macdonald, senior economist at the Canadian Centre for Policy Alternatives.
While over a million Canadians have applied for jobless benefits since mid-March, another million workers were already unemployed at the end of February, he says. Of those, Macdonald estimates around 600,000 would not have qualified for EI. The question now is whether those Canadians will be able to access the CERB.
While the CERB is open to both Canadians who’d normally qualify for EI and those who wouldn’t, the government has said the benefit is for those who’ve lost income for “for reasons related to COVID-19.”
Another group of workers who may be excluded from the CERB safety net is those who, while eligible for EI, exhausted their payments before the virus struck, says Parisa Mahboubi, senior policy analyst at the C.D. Howe Institute.
“I think this is something that the program hasn’t taken into account,” Mahboubi says.
Both Macdonald and Mahboubi, however, note that details about the CERB remain scarce and much about the new benefit may still be in flux.
Still, new graduates may also be excluded from the new income support.
Some government sources have indicated some students would be able to apply for the CERB. In an update to her website on Friday, federal cabinet minister Maryam Monsef said students who’ve earned $5,000 in the past year would qualify for the aid.
The government’s Emergency Response Act, which introduced the CERB, says workers must have had income of at least $5,000 in 2019 or in the 12-month period preceding their application in order to qualify. The income must have come from employment, self-employment or EI or Quebec maternity and parental benefits.
That’s good news for students who’ve managed to hold on to part-time jobs while in school, Macdonald says. But, he adds, what about the new graduates who have a job offer lined up for May that may unravel amid the current economic cataclysm?
In general, young Canadians will be “particularly hard hit” by the crisis, Macdonald predicts.
Youth unemployment was at 10 per cent even while the economy was humming along, he notes. By May, when school is out, he predicts it will hit around 33 per cent.
And by the summer, amid a dearth of jobs in the restaurant and retail industries, “it will get even worse,” he says.