More than 300,000 people stopped receiving jobless benefits through employment insurance in mid-September, part of a massive transition that’s under way for workers as COVID-19 assistance programs change or expire.
Between Sept. 13 and 19, around 1.37 million people were receiving regular EI benefits for job loss, according to a preliminary estimate published Monday by the federal government. The previous week, there were 1.69 million EI recipients.
It’s likely the sharp drop was driven by people who immediately migrated to EI from the Canada Emergency Response Benefit (CERB) last fall, and have now exhausted their maximum 50 weeks of eligibility for jobless aid.
Those who stopped receiving EI may be able to qualify for the Canada Recovery Benefit (CRB), which is available to people who are unable to work, or have had at least a 50-per-cent reduction in their average weekly income, because of COVID-19.
However, CRB is only scheduled to run until Oct. 23. And new claims under that program pay $300 weekly before taxes, down from $500 before mid-July – part of broader changes to wind down extraordinary federal financial supports during the pandemic.
The key question is whether the Liberal Party will seek to extend COVID-19 programs again as parts of the country grapple with a fourth wave of infections – and if so, what support it can muster in another minority government.
The business community will be watching closely for any changes. Many companies are complaining of worker shortages as pandemic restrictions loosen, though this has not broadly resulted in a sharp acceleration in wages so far.
“It would not be surprising to see employment benefits extended beyond their slated expiration at the end of October,” Rebekah Young, the director of fiscal and provincial economics at Bank of Nova Scotia, wrote in a report to clients after last week’s election.
The EI program was jolted by the pandemic. When the COVID-19 crisis first hit, the EI system was unable to handle a flood of new jobless claims, with CERB brought in to handle the bulk of household financial assistance for 28 weeks.
EI returned last fall, but was more generous and accessible. The minimum jobless benefit was raised to $500 a week (before tax), while a successful claimant needed only 120 hours of insurable work, down from as many as 700 hours.
Those details changed on Sunday. For new claims made between Sept. 26 and Nov. 20, the weekly floor is now $300, equivalent to CRB payouts. And over the next year, new recipients will need to have worked at least 420 hours to qualify.
Stephen Brown, senior Canada economist at Capital Economics, wrote Monday there could soon be an increase in job seekers as benefit programs wind down. “However, this will probably only help to ease the shortages of unskilled labour,” he said.
Canada has experienced a sizable increase in long-term joblessness over the pandemic, given the lengthy shutdowns in several sectors. Among many economists, there is concern that some people are increasingly estranged from the labour market, and that ending COVID-19 support programs isn’t a panacea to hiring challenges.
“I’m not holding my breath that we’re going to see some big increase in the amount of labour supply” in September, said Mikal Skuterud, a professor of economics at the University of Waterloo. “These longer-term jobless spells may be more permanent in nature. People have found other ways to survive.”
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