Those emergency CERB payments of $2,000 a month are set to disappear in six weeks. What’s on deck to replace them is an expanded, CERB-like form of employment insurance – one that’s easier to get and covers more people.
That’s when the pandemic response will cross a bridge, from temporary measures to get us through a few months of crisis to social-program changes likely to stick with us for a while.
It is going to get decided in the haste of a crisis, with an uncertain future ahead, by a minority government that needs to make a deal with another party – likely the NDP – to get it through Parliament.
Officially, there’s been no word from Prime Minister Justin Trudeau about what will come after the Canada Emergency Response Benefit.
In fact, the government’s official statements make it look like the CERB will just die. The last period of the program is slated to end Sept. 26, but for those who have been receiving it since the beginning, the last period of eligibility is set to expire Aug. 29. The Liberals have indicated that it is an emergency program that can’t go on forever.
The fiscal “snapshot” that Finance Minister Bill Morneau issued last week – the one that forecast a $343-billion budget deficit – didn’t allow for much new CERB spending. Instead, it indicated that the government will pour money into wage subsidies, now extended till December. That’s a sign the Liberals want the wage subsidy to be the transition vehicle.
That suggests CERB recipients who don’t get onto a payroll will have to apply for employment insurance. But if it is the existing, prepandemic EI system, roughly half of them won’t qualify.
That’s not going to happen. It would leave hundreds of thousands of people, maybe millions, without jobs or benefits. That would be political suicide for Mr. Trudeau.
Instead, the Liberals are looking to morph the CERB into a new EI.
That’s both a policy conundrum and a political one. For the most part, Mr. Trudeau’s minority Liberals have negotiated for support for their pandemic policies with the NDP. The NDP wants CERB-level benefits to continue.
NDP House Leader Peter Julian said in an interview that his party is willing to extend the CERB, but he noted that early in the pandemic, it proposed an universal basic income during the crisis, and New Democrats still think that’s the best option.
But Mr. Trudeau has rejected that before, so don’t expect him to embrace it now. Mr. Julian said the NDP is willing to discuss another option, expanding EI, as long as that doesn’t mean cutting back benefits.
Hassan Yussuff, the president of the Canadian Labour Congress, said the government seems to want to expand eligibility so most CERB recipients can get on EI, but he still hasn’t had a “clear answer” about how long those benefits would last.
But melding CERB into EI won’t be simple. “I don’t think you can do it,” said Jennifer Robson, a Carleton University professor of political management who researches social policy.
She notes that in a normal year, employment insurance pays benefits to less than 40 per cent of the unemployed. Some don’t work enough hours to qualify, but a lot more are ineligible because they never paid in, probably because they were self-employed or considered contractors. CERB covers far more people.
It’s one thing to require less work to qualify – CERB requires $5,000 in income, less than half the 800 hours of work required for EI. It’s to pay benefits to people who never paid into EI, a system where benefits are supposed to be covered by premiums.
CERB is available to people who left work for a variety of reasons – like having to take care of a child at home. EI isn’t. Will EI be available to people who can’t get child care, and if so, will it stay that way when the pandemic ends?
The answers will be crucial to millions of people. They can have a major impact on public finances and presumably lead to a hike in EI premiums. Even if they aren’t supposed to be long-term reforms, they could last a lot longer than intended. No one knows how long the pandemic, or high unemployment, will last. In that vulnerable environment, politicians might be loath to take on an EI revamp. The next batch of crisis decisions on benefits is likely to decide things for a while.
Correction (July 15, 2020): This column incorrectly stated the end date of CERB as Aug. 29. The last period of eligibility is in fact currently scheduled to end Sept. 26. However, recipients who have received the benefit from the first period will see their eligibility end Aug. 29 under current rules, when their sixth period of benefits ends.
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