Jennifer Robson is an associate professor in political management at Carleton University.
On Oct. 21, the federal government announced several important changes to its suite of pandemic income support measures for businesses and workers. With aggregate employment largely back up to pre-pandemic levels, and the unemployment rate hitting a pandemic-era low in September, the government declared victory and moved on.
As part of its announcement, the federal government gave just 48 hours notice to as many as 800,000 workers that their primary COVID-19 support program, the Canada Recovery Benefit (CRB), would be coming to an end.
No program with a strong business lobby would have been handled this way. Business groups would reasonably and convincingly argue that stakeholders need time to plan and adjust to changes in policy. For users of the CRB, the announcement offered no such off-ramp, especially not for those who, according to the government’s own internal estimates, have been regular or even continuous users of the program.
The Canada Recovery Benefit had been offering unemployed workers unable to qualify for Employment Insurance $300 a week before taxes – the equivalent of $8 an hour of full-time work. The governments’ hope, shared by would-be employers, might be that this “tough love” approach to ending the benefit will spur a sudden uptick in job-taking. Labour force data in the coming weeks will tell.
Long-term unemployment is still high and many workers still haven’t recovered all their previous paid hours. We should also keep watch on provincial welfare rolls, which are typically where the EI-ineligible, such as CRB clients, end up in a deep economic crisis. Those welfare systems are not built for workers trying to get back on their feet and are too often an undignified dead-end.
The majority of CRB users will likely have been self-employed workers who aren’t incorporated and have no employees of their own. Some might have been misclassified as “self-employed” by businesses looking to avoid payroll taxes and other non-wage obligations. And while half of all self-employed tax-filers also pay into EI through wages or salary earned in addition to their self-employment, EI rules exclude them from income support and other benefits of the program.
The CRB wind down was going to come at some point, but it didn’t have to come without adequate notice or a plan for users.
As part of its policy shift, the government could have changed the technocratic EI rules that block workers with anything more than “minor” self-employment from collecting benefits, even when they have paid premiums in a regular, EI-insured job that ends in a layoff. This would have corrected a long-standing inequity in the program and given more hybrid workers hope of being able to count on a safety net in the uncertain months ahead.
The government could also have worked with provinces and territories, building on recent workforce development agreements, to make sure that CRB users had a clear pathway and incentive to access retraining and employment support programs comparable to those available to EI clients.
In the EI system, those currently or recently on regular unemployment benefits can qualify for training, wage subsidies and even self-employment programs to accelerate their chances of getting back to work. But people who don’t get EI income benefits are generally only able to access light-touch employment information services where the return on investment (measured in re-employment and future earnings) are much lower. Given the scale of the economic shock, federal and provincial governments should have broadened eligibility to CRB users and made a real effort to connect them to local employment services.
The CRB taps have now been turned off. But if the government acts urgently to address these two policy measures, it could still create a smoother and more productive transition for the hundreds of thousands of Canadians affected.
The tough love approach might force some CRB users to take whatever paid work they can. Given current circumstances, that might be work at less than their usual paid hours or, as is often the case for the long-term unemployed, work that comes with a life-long hit to their earnings.
But tough love might also force some share of these past workers out of the labour force altogether. For a policy framed to mollify employers worried about labour shortages, driving workers off a cliff, especially when better off-ramps are available, seems like a risky economic path to take.
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