Billions of dollars in federal sick-leave benefits have gone unclaimed and unspent since the program was launched in the fall, even as coronavirus cases have surged across the country.
According to data released this week by the Canada Revenue Agency, just $391.4-million was paid out under the Canada Recovery Sickness Benefit as of March 28, less than one-sixth of the $2.6-billion that the government projected the program would cost for fiscal 2020-21 ended March 31 in its November economic statement. And those earlier estimates came before the federal government’s move in February to double the cap on benefits to four weeks.
The CRSB pays $500 a week, or $450 after withholding taxes, to eligible workers who are self-isolating because of the coronavirus, and who missed at least half of their scheduled work hours. But a raft of restrictions, most notably benefits that fall well short of replacing lost income for the vast majority of workers, have hobbled the effectiveness of the program.
“This has been a total failure,” said University of Waterloo economics professor Mikal Skuterud.
He noted that in February, 83.2 per cent of paid employees had usual gross weekly earnings in excess of $500 – meaning that more than four in five workers would see their income fall if they used federal sick leave.
Nearly as big an issue is the timing of that relatively paltry compensation. Workers have to apply retroactively, a change from the Canada Emergency Response Benefit, which paid out benefits at the start of a qualifying period. The result is that low-paid workers with no savings face the choice between waiting days or weeks for payment – or going to work sick.
“If you want people to stay home, you don’t punish people for doing so,” said Randy Robinson, Ontario director for the Canadian Centre for Policy Alternatives.
Prof. Skuterud said he believes the political jousting over what level of government should provide sick-leave benefits is partly to blame for the low rates of use of the CRSB. Progressive critics of the Ford government in Ontario have been pushing the Progressive Conservatives to introduce a provincial program, sometimes ignoring the existence of the existing federal benefit, he said. That could be contributing to confusion, particularly since the federal Liberals have not rebutted such rhetoric, he added. Language barriers and lack of access to online technology could also be factors, he said.
Labour force statistics point to a schism between workers with employer-provided sick days and those without, Prof. Skuterud said. Absenteeism rates for labourers in unionized workplaces have nearly doubled since the pandemic began, an indication that workers are able to use employer-provided sick days, he said. (Those workers are able to apply to the CRSB, but cannot be paid by their employer for the same days off.)
However, non-unionized workplaces are much less likely to have such benefits, leaving those workers entirely dependent on the federal sick-leave program. Tellingly, absenteeism rates for labourers in those workplaces have actually declined marginally since the start of the pandemic, showing that those workers are not using Ottawa’s sick-leave program.
The government’s own statistics bolster that picture. As the chart below shows, the number of new unique claimants each week has been on a declining path since early December – despite the surge in coronavirus cases late last year that led Ontario, among others, to reintroduce lockdown restrictions.
The same pattern shows up in disbursements, with early December showing the greatest outlays, as the chart below shows. The maximum benefit period doubled to four weeks as of March 15, but so far there has not been a surge in payments, or applicants.
Workers can take up to 60 days to apply for benefits, so it’s possible that there could be late-arriving applications that will increase the total outlays for fiscal 2020-21. But the gap is large, with more than $2.2-billion unspent. A Globe and Mail analysis of the government’s data shows that more than 90 per cent of applications are made within three weeks of a claim period, a likely indication that there are a relatively small number of applications yet to arrive.
It’s also possible that Ottawa’s projections were simply too high. The Parliamentary Budget Officer was more conservative in its estimates, initially projecting in October a gross cost of $655-million for 2020-21, before reducing that estimate to $427-million in February. With the extension of benefits, that gross cost rises to $481-million, still significantly higher than current outlays.
Parisa Mahboubi, senior policy analyst with the C.D. Howe Institute, points to a more disquieting trend: There are large numbers of CRSB applicants who are not taking enough sick leave to allow for the 10-day self-isolation period that health professionals recommend. According to the CRA’s statistics, the ratio of the number of claims for one week of benefits made to the number of unique applicants is less than two – indicating that the average sick-leave claim is for less than two work weeks.
Ms. Mahboubi cautioned, however, that some workers may be accessing sick-leave benefits by other means, either through the federal benefit for caregivers, or through the Canada Recovery Benefit (though that would mean that they had lost their job, or the majority of their income for a four-week period).
Employment Minister Carla Qualtrough declined a request for an interview. Her office did not respond to questions about why the use of the CRSB has fallen below projections, and whether the CRSB needs to be reformed. When the CRSB benefits extension was announced in February, Ms. Qualtrough did not directly answer a question about what additional changes could be made to the program, and instead urged the provinces to launch complementary efforts.
However, outside observers say there are several needed reforms to the federal sick-leave program. Most obvious is increasing the amount of the benefit to replace a higher percentage of income for sick workers. That could be done either through increasing the flat rate, or by tying payments to a percentage of an applicant’s typical wages.
Speeding up the payment to applicants is another needed improvement. Ms. Mahboubi and others suggest that Ottawa could refund employers rather than employees, keeping wages flowing to workers living paycheque to paycheque. Prof. Skuterud said such a move would also dissipate some of the systemic barriers slowing applications.
But Mr. Robinson of the Canadian Centre for Policy Alternatives said a completely new approach is needed, with the provinces each designing their own paid sick-leave programs, reflecting their constitutional jurisdiction over labour law. But he agreed that an effective sick-leave program would compensate workers for all of their lost income, and would reimburse employers so that employees do not miss a paycheque. “It has to be that simple.”
Editor’s note: (April 9, 2021) An earlier version of this story contained an incorrect figure for the PBO’s revised estimate of the early version of Ottawa’s federal sick leave program.
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