What we know so far about the CERB to EI transition

WATCH: Freeland expected to offer update on CERB, transition to EI

As the summer draws to a close, millions of recipients of the Canada Emergency Response Benefit are waiting to hear what comes next as the economic impact of the novel coronavirus pandemic persists.

The last eligibility period for which Canadians can receive the $2,000-a-month benefit ends on Sept. 26. Once Canadians have exhausted the emergency income support, federal Employment Minister Carla Qualtrough has promised a “seamless” transition to the Employment Insurance program.

READ MORE: Manitoba MP submits motion to convert CERB benefit to permanent basic income

Canada’s labour market has only partially rebounded from the economic repercussions of COVID-19, economic data shows. By mid-July, more than 40 per cent of the millions of workers affected by the pandemic were still out of work, according to the latest job market report from Statistics Canada.

Of an estimated 4.7 million Canadians who were receiving the CERB as of the beginning of August, only 1.4 million would qualify for Employment Insurance under the normal rules, according to an analysis by economist David Macdonald of the Canadian Centre for Policy Alternatives.

Story continues below advertisement

The federal government, however, has said it is tweaking the EI program to expand eligibility. Here’s what we know so far.

Click to play video: 'Coronavirus: ‘CERB has served its purpose’ says Employment Minister Qualtrough in explanation of planned move to EI'
Coronavirus: ‘CERB has served its purpose’ says Employment Minister Qualtrough in explanation of planned move to EI

Which out-of-work CERB recipients will continue to receive support?

Qualtrough has vowed “no one will be left behind” in the move to EI. But Macdonald warned “millions” could fall through the cracks if the transition is “done wrong.”

Where current CERB recipients might fall depends on how Ottawa modifies EI, Macdonald’s analysis suggests.

Canadians who were eligible for EI before CERB. If you fall into this group, you can breathe easier than most. Macdonald calculates 1.4 million people who were on CERB in mid-July would have qualified for EI under the traditional regime (the estimate is based on numbers from the Labour Force Survey, which differ slightly from the ones Macdonald used to calculate the overall number of CERB recipients at the start of August).

Still, one concern for these Canadians is how much they’ll receive from EI compared to the CERB. More than 800,000 people likely stand to get less than the $500-a-week emergency benefit. On average, these workers will get only $312 a week from EI, Macdonald calculates.

Story continues below advertisement

In an upcoming report, Macdonald further found that around 70,000 CERB recipients will receive between $200 and $300 a week through EI, while a whopping 285,00 would receive only between $100 and $200.

Eighty-seven per cent CERB recipients in B.C. and 84 per cent of recipients in Ontario would be worse off or be left without benefits in the rollover to EI under the current rules, the the report shows.

“The counts in Ontario are truly concerning, with 1.2 million CERB recipients being worse off after they are switched to EI,” Macdonald writes. Of those, he adds, almost 900,000 stand to be cut off from federal income support under the current regime.

READ MORE: Trudeau government should rethink EI as CERB winds down, labour group warns

Nearly 630,000, however, would get $500 or more. The maximum weekly benefit under the current EI system is $573.

Employment and Social Development Canada has previously said that participation in the CERB program will not affect how many weeks of EI benefits one is eligible for. This holds for maternity and parental benefits as well.

Click to play video: 'Overhauling Canadian employment insurance'
Overhauling Canadian employment insurance

Still, around two million Canadians wouldn’t automatically roll over to the EI system given the current rules, according to Macdonald.

Story continues below advertisement

CERB recipients who are working part-time. If you’re earning $1,000 a month or less, you can work and still receive the CERB. But EI rules are different. In general, workers must be completely out of work with no wage income in order to enroll in EI, Macdonald noted, although it’s possible to resume working part-time while on EI.

Parents who had to stop working due to lack of childcare. While the CERB is available to those who are forced to trim their hours or give up working due to family caregiving duties, EI is not. There are at least 18,000 people in this situation, though the true figure is likely “much larger,” Macdonald wrote.

Self-employed and gig workers. EI traditionally doesn’t cover these workers, though the government has indicated it would create a transitional EI-like benefit for them.

Those who don’t have enough hours to qualify for EI. There were around 150,000 people who made $5,000 in the past year but didn’t have enough employment hours to qualify for EI, Macdonald estimated. However, that number likely dropped down to around 50,000 when Ottawa announced changes on Aug. 10 that effectively lower the number of hours of insurable employment needed to access the program, Macdonald told Global News.

Click to play video: 'Manitoba MP submits motion to convert CERB benefit to permanent basic income'
Manitoba MP submits motion to convert CERB benefit to permanent basic income

Will there be a benefits gap?

Qualtrough has said the switchover to EI will happen “without benefit disruption.” The system is “robust” and “ready to ingest the millions of Canadians it needs to,” the minister said during Question Period on Wednesday.

Story continues below advertisement

But the transition will be a significant test for the EI infrastructure, which has run into technical and backlog issues resulting in payment delays during the rollout of CERB.

READ MORE: CERB poses back-to-work dilemma — ‘We’re being incentivized to make just under $1,000’

What will I need to do to qualify for income support and how long will benefits last?

The federal government said it will have more to say about upcoming EI changes next week but has already announced a significant tweak.

Ottawa has set a minimum unemployment rate of 13.1 per cent for all EI economic regions across Canada effective Aug. 9.

Normally, the lower a region’s jobless rate is, the higher the bar to qualify for EI and the shorter the benefits. The opposite is true when local unemployment is high.

Setting the unemployment rate at 13.1 per cent means EI recipients are guaranteed a minimum of 26 weeks, or roughly six months, of benefits and will need only 420 hours of eligible employment in the last year to qualify.

Canadians living in EI regions where the jobless rate is below 13.1 per cent will have their EI benefits calculated on the basis of the new national threshold. Those living in areas where the unemployment rate is higher will have their benefits calculated using the actual regional rate, the government has said.


Sponsored content