Q: What is CERB designed to do?
A: CERB (Canada Emergency Response Benefit) is a temporary program meant to replace some part of income for people who can’t and shouldn’t work as usual because of COVID. It’s not a basic income. It is a program to give people some necessary financial resources to be able to practice physical distancing. As Armine Yalnizyan and I wrote back in mid-March, this kind of financial support is essential for the public health orders to succeed.
CERB covers workers who are on leave without pay (furlough) because they are at home sick or caring for others, workers who are laid off and self-employed or gig-workers who may not have an “employer” but cannot get paid work right now. It is run on a “trust-but-verify” approach where an applicant attests that they are eligible and agree to a potential future file review by one of the two government departments running the program, Service Canada and the Canada Revenue Agency.
Today (April 15) the Prime Minister announced that people with up to $1,000 in work income (including self-employment) can also qualify for CERB. He also announced that people who were on EI benefits before the crisis, including seasonal workers, will move onto CERB when they see those benefits run out.
Q: What was initially announced?
A: In terms of income support for workers? Well, initially, the federal response was some increased flexibility on Employment Insurance (EI) sickness benefits – this is the 15-week benefit if you are covered by EI to let you take leave due to illness. They waived the need for a medical note for COVID and the waiting period that normally serves as a co-pay in an insurance system.
But I think it became clear that the EI system did not have the scale (in coverage) or capacity (in processing using a verify-then-pay approach) to handle the demand. So then CERB was created by the feds using Bill C-13 that got all-party support. But the wording of the legislation says “have ceased to work”, was interpreted in practice to mean that seasonal workers, previously unemployed workers and those (employees or self-employed) with some marginal but partial earnings would be left out either from an initial claim or when they tried to renew CERB for a second or subsequent month. In a literal reading of the legislation, if you “have ceased to work” then you can’t have “not yet started” or “kept going, but not enough to live on”. But I’m not convinced that was the intent of the government or opposition parties when they voted for the bill. Certainly, I didn’t hear it in the (albeit shortened) debate and it was not my initial understanding of the legislative intent and will of Parliament.
Q: Who did experts say was being left out that needed support?
A: I’m not sure if I should put myself in the “experts” group here, but a number of us pointed out that people with partial earnings would not be able to collect benefits when they renewed CERB – as is required for each 4 week period. Several of us also raised the question of previously unemployed workers who would run out of regular EI benefits before the public health orders are lifted.
Students and seasonal workers also spoke up early to voice concerns. Students are a diverse group. Some students were covered under the original design if they had been working during the year.
There’s also the question of whether people on provincial social assistance who are eligible and get CERB will be able to keep it or whether they may find themselves worse off after provincial claw-backs. The federal minister in charge of CERB has already voiced her hope that provinces will exempt CERB from regular welfare claw-backs. So far only B.C. has committed to this, to my knowledge.
Overall, I think it’s becoming clear that there is no single policy tool — no, not even UBI – that would do all things to promote some degree of temporary financial stability for all Canadians in all circumstances. We need more than one tool in the toolkit and programs that can be layered so that people who need additional or different forms of help can get it. For example, in the case of students who were planning to graduate and start a career this spring are going to need more than a temporary paycheque as Prof. Kelly Foley and Prof. Christine Neil have argued. We’re also waiting for the emergency wage subsidy to come online and to see how that may change how and when employers resume paying and rehire staff.
Q: What do the changes to CERB do? Who do they help?
A: Well, the changes today (April 15) will, as I said earlier, help workers who have some partial income, seasonal workers and people on regular EI who would otherwise run out of benefits before the crisis. Overall, the policy intent is still, I think, to cover people who are experiencing the economic effects of COVID so they can continue to stay home per public health orders. But I’d still like to see the details in the updated program information pages from official government sources.
Q: Are there details we still need to understand that have yet to be released?
No doubt there are. That’s why I said that I will want to see the details on an official government site or source. The $1,000 de minimis amount that was announced is reasonably simple and maybe even generous relative to other earnings exemptions in long-standing programs. It’s consistent, in spirit, with the original eligibility criteria for CERB of getting a payment of $2,000 for a 4 week period when 2 weeks have elapsed without paid work.
Covering those whose work has not started as planned seems a little more complicated to me. But this seems to be tied to receipt of EI benefits for seasonal workers. There will still be previously unemployed persons who didn’t get EI and won’t transition on to CERB. Likewise students who planned to enter the workforce after graduating may not qualify under the new rules today, but their needs may be, as I said earlier, for a different set of policy responses to help them restart that labour market entry. The wage subsidy may be a better tool.
Q: Are there people or groups that continue to fall through the cracks?
A: Great question. Yes there are, and I’ve already mentioned a few earlier. Rather than list sub-populations here, let me instead try to offer a framework for thinking about groups with different needs,
I think we should be considering at least two big questions when it comes to thinking about the mix of temporary supports AND what comes next in the eventual rebuild:
- How much income immunity, as Miles Corak has said, is someone experiencing from the COVID crisis? By this, I mean that there is something of a continuum here:
- people who have been able to keep working as usual, or were not in the workforce before COVID or intending to join it afterwards
- people in work deemed essential (it was always important, glad we woke up to that) who are being asked to work differently (sometimes more, sometimes less),
- people who are able to work in non-essential ways, but far less than before,
- people who have no paid work and may or may not get back to the same employers / gigs / clients
- people (particularly new graduates and previously unemployed persons) who were about to start working but have had that start disrupted due to COVID.
- What is the capacity of the person / family to self-insure against a change in income and the costs they face in following social distancing and then, eventually, navigating the economic re-start? Not everyone needs financial help and people who don’t need shouldn’t be hoarding it if we want government programs to remain simpler, leaner and based on “trust but verify” when we come to the re-build phase.
When I think about it this way, I don’t think the answer is necessarily to make CERB bigger. For example, people who are our most low-income and most excluded need safe places to be able to self-isolate and access to supports and services that keep them safe. CERB can’t and shouldn’t replace access to basic goods and services. Again, we need multiple tools in the toolkit and to allow people to assemble the set of supports and services that best fits their set of needs.
Jennifer Robson is an Associate Professor of Political Management at Carleton University.
