Fast Facts:

• Roughly 4 million Canadians were receiving Canada Emergency Response Benefit (CERB) in August and early September.
• The move from a $400 to $500 weekly amount in Employment Insurance (EI) and Canada Recovery Benefit (CRB) will improve benefits for 1.8 million CERB recipients.
• 776,000 CERB recipients will receive no further federal support once CERB ends;
  • Largely due to low-wage, part-time workers and low-pay self-employed workers losing support; 
  • 65,000 CERB recipients will hit the $38,000 income cap in 2020 for the CRB.

Details of the major new jobless benefits are changing fast as the Canada Emergency Response Benefit (CERB) comes to an end.

The latest revision includes a higher floor on Employment Insurance (EI) regular benefits, increasing from $400 to $500 a week, as well a higher Canada Recovery Benefit (CRB) flat amount going from $400 to $500 a week—$500 a week was the amount everyone received on CERB. The CRB also received a more specific threshold of lost hours of 50% before you could receive it.

The new Canada Recovery Caregiving Benefit (CRCB) and the Canada Recovery Sickness Benefit (CRSB) were already at $500-a-week flat benefits and that hasn’t changed. My previous analysis was based on the $400 floor and is updated in this post using the same methodology, just with a $500 floor on EI and a $500 value on the CRB. Although in this analysis the 50% loss of hours threshold for the CRB is incorporated as is a better estimate of the $38,000 threshold self-employed workers can make before the CRB is clawed back.

There were already many people at the $400 a week amount prior to this week’s change, since they either hit the floor on EI benefits or they would have received the CRB. As that floor and CRB benefit level were increased, the result is that 1.8 million people will receive more money. That’s a substantial impact for a single policy change, given there were 4 million people receiving the CERB in August.

There are still people who will receive less than $500 a week now that CERB is no longer, but they will still receive some benefits: the biggest group in this category are people who qualify for EI’s working while on claim programs. These are people who lost work then returned to work, but not at their previous hours.

Under CERB, these workers could make under $1,000 a month and still receive the full CERB amount without a claw back. EI’s working while on claim doesn’t work that way. Instead, it claws back 50 cents from the EI benefit for every dollar you earn. What this means is that anyone claiming this benefit will, almost by definition, be making less than $500 a week, as there will be a claw back. There are 167,000 people in these circumstances.

There remains three quarters of a million CERB recipients who will receive nothing now that CERB has ended. The biggest reason for this that CERB supported low-wage, part-time workers who made less than $1,000 a month or low-pay self-employed workers making under $1,000 a month who haven’t lost half (or more) of their hours.

These are workers who experienced a work interruption but then went back to working their previous hours. CERB acted as a sort of low-wage supplement for them. But none of the new programs, nor EI, will function like that. For low paid self-employed workers, CERB played a similar role, but the 50% fall in hours is a more stringent threshold for most than CERB had.

There will also be smaller groups of CERB recipients who technically qualify for EI’s working while on claim but who likely won’t bother to apply because the claw back leaves them with only $50 or less a week from EI.

Another smaller group of self-employed people who made over $38,000 in 2020 will have their CRB clawed back at tax time and so they also are unlikely to apply. The move from $400 a week to $500 a week had no impact on those losing federal income support after CERB.

On average, 21% of CERB recipients will now receive no support and 4% will receive some support but less than $500. All told, 25% of CERB recipients will be worse off after the transition: 53% of CERB recipients will make the same $500 a week after CERB ends and 21% of CERB recipients will be better off after CERB, receiving more than $500 a week on EI.

Women, in particular, are more likely to benefit from raising the EI floor. With the $500 a week floor, 1.2 million women (56%) will receive the same $500-a-week post-CERB support that they received on CERB.  There are still more women who will be worse off after CERB ends, although this is largely due to there being more women on CERB in the first place because women suffered more job loss at the start of the pandemic.

The broad breakdown of recipients into their various characteristics at the $500-a-week value is similar the $400-a-week value. Predictably, the largest difference is what people make on EI, where almost all now receive $500-a-week or more.  The stricter limit on receiving the CRB announced last week reduces the number of self-employed CERB recipients who will be able to access the CRB.

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By far the biggest beneficiary of the $500-a-week change is Toronto, given how many of its residents have been receiving CERB. There are 767,000 Torontonians on CERB. When the floor was $400 a week, 605,000 Torontonians receiving CERB would have been worse off after it ends. That has shrunk dramatically to 177,000 with the new $500-a-week floor. Vancouver and Montreal will also be big beneficiaries of this change, given their large population.

On a provincial basis, Ontario will be the biggest winner as a result of the new $500-a-week floor. Given Toronto’s large population, this is inevitable. At $400 a week, 1.1 million Ontarians would have been worse off post-CERB; that shrinks to 360,000 with a $500-a-week value. In Quebec, half a million CERB recipients would have been worse off with a $400-a-week EI floor and CRB benefit; that shrinks to 174,000 with a $500-a-week floor.

Conclusion

Half of all CERB recipients—1.8 million people—will benefit from the government’s agreement to raise the EI floor and CRB to $500 a week. The new legislation, however, does not place a floor on EI working while on claim amounts at, say, $75 a week. It also does not make the first EI payment on an attestation basis, like the CERB did. These are both recommendations in my previous analysis.

There remain 781,000 people who received CERB through the CRA website who are EI eligible, but whose claim will not be automatically ported to EI. They’ll all have to apply manually. Despite the legislation being well developed at the time of writing, it hasn’t yet passed and there is a long way to go before full implementation.

There is going to be plenty of stress and worry as Canadians impacted by COVID-19 try to figure out where they go next once CERB ends. The tight timetable between passing the legislation that enables the new programs and the end of CERB could have easily been longer. This short timeline will only add to the confusion and worry of Canadians hit hard by COVID-19.