Experts and advocates are sounding the alarm as the federal government transitions from COVID-19 emergency aid to other recovery benefits, calling the move a "recipe for economic disaster."
As of Sept. 27, more than four million Canadians who received the Canada Emergency Response Benefit (CERB) will no longer have access to the weekly $500 — with only about half eligible for lower payments under the revamped employment insurance program, according to a report released Tuesday.
Roughly three million people will be "worse off" once the switch happens, suggests data from a new study by the Canadian Centre for Policy Alternatives — at least 50,000 of them are in Winnipeg.
"It shouldn’t be entirely surprising that we’re all very worried," senior CCPA economist David Macdonald told the Free Press. "Government hasn’t even come back yet after they prorogued Parliament, and all these changes were announced just weeks ago."
Access to EI benefits is normally based on the number of insurable hours someone has worked in the year prior to their application, or since their last claim under a qualifying period. In major cities such as Winnipeg, that means working about 700 or so hours for a given year before being eligible.
Under new rules, Ottawa has temporarily altered eligibility: a minimum of 120 insurable hours or documentation that an individual’s been unemployed since March will provide them with a payment of $377 per week, on average.
Stressing that "major reduction" in funds for at least 1.3 million Canadians switching between the benefits, Macdonald said 781,000 people won’t automatically be switched over and will have to apply manually.
"CERB was definitely generous and there's no shying away from that," he said. "But it was also necessary because of the times we're in. And certainly, the EI just isn't like that — it's quite restrictive."
On top of that, the CCPA estimates about 482,000 people will stop receiving recovery support altogether. Around 20,000 of those are in Manitoba.
Macdonald believes a majority of those are gig, contract and low-wage workers who make less than $1,000 per month.
"The transition off of CERB will be historic," he said. "The timeline is tight and the stakes are very high, so we’re urging the government to be very careful about these changes and how they could adversely affect vulnerable people who are still going through a crisis during this pandemic."
For Steve Tait, who runs lower-income housing in Winnipeg, the end of CERB could mean "watching more people get homeless and out on the streets."
"About 30 or so of the tenants I work with are on social assistance," he said Tuesday. "Thankfully, not all of them applied for CERB. But some of them did, and now they’re unfortunately going to feel the consequences of that."
The end of CERB could mean “watching more people get homeless and out on the streets.” – Steve Tait
Meantime, the CCPA suggests more women will be worse off when the switch to EI happens (about 1.6 million women versus 1.2 million men). The research organization also believes the change will "disproportionately affect" people who face long-term unemployment, international students, migrant workers and recent immigrants.
The new recovery programs have yet to become legislation, however, since Parliament is out of session.
Come Sept. 23, a four-day window will be open for the feds to make changes to the emergency benefits — which Macdonald hopes is when Ottawa will increase EI to match the former CERB.
"We certainly hope they'll listen to us and other economists who want them to do better."
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Temur Durrani reports on the economic impact of the coronavirus pandemic for the Winnipeg Free Press. Funding for this Free Press reporting position comes from the Government of Canada through the Local Journalism Initiative.
It can be confusing switching from the Canada Emergency Response Benefit (CERB) to the revamped employment insurance program. The Free Press spoke with an accountant to create a simplified outline, breaking down the steps:
Step 1: Confirm whether you have received CERB from Service Canada or the Canada Revenue Agency. If it’s the latter, you will need to manually enter details to receive the new EI benefits. Otherwise, you will be automatically switched over (but should confirm receipt for this, anyway).
Step 2: Collect all your personal information — including your Social Insurance Number, proof of employment or unemployment, tax returns, etc.
Step 3: Create a Service Canada account online for easiest payment, or call the EI call centre at 1-800-206-7218 for information about applying through paper forms
Step 4: Fill out all the details in the online account, using your personal information. You can also click an option to calculate the estimated amount of EI benefits you can claim.
Step 5: Confirm whether you have a bank account set up for automated direct payments. If so, add that information in your account. Otherwise, you can receive cheques in the mail by adding your home address. (Note: this will be tax-deductible upfront, unlike the CERB.)
Step 6: You will be paid based on the reports you submit. You can report every two weeks and get paid biweekly or you can choose to only report every four weeks and get paid once a month. The maximum amount you can be paid is $12,000 for 24 weeks.