The federal government is extending the Canada Emergency Response Benefit (CERB) for four weeks and overhauling employment insurance (EI) so self-employed workers qualify.
On Thursday, Employment Minister Carla Qualtrough and Finance Minister Chrystia Freeland outlined a plan to transition CERB recipients to the reformed EI system at the end of September.
The measures, which will cost around $37 billion and be in place for one year, include three new benefits.
The economic shutdown brought about by the global pandemic has plunged the country into the worst financial crisis since the Great Depression. Three million Canadians lost their jobs in the spring, though the the employment rate has started to rebound thanks to mostly part-time work.
“We recognize that there continues to be an ongoing public health crisis in our country and we need to prepare for other possible economic shutdowns due to outbreaks or future COVID-19 waves,” said Qualtrough. “Not all regions across the country or sectors are reopening at the same time.”
The CERB is the centrepiece of Ottawa’s COVID-19 recovery efforts. The program pays people $2,000 per month, and has paid out nearly $69 billion to 8.58 million applicants to date.
The feds will extend it by another four weeks for a total of 28 weeks at an estimated cost of $8 billion, Qualtrough said.
The government plans to introduce legislation to enact the EI reforms when parliament resumes on September 27.
Approximately three million people are expected to join the EI system at the time when the new benefits take effect, Qualtrough said.
New employment insurance benefits
Most people will be transitioned from CERB to EI automatically. Those who do not qualify can apply for three new benefits.
Self-employed workers, including gig workers, who are not eligible for EI can apply for and receive $400 per week for up to 26 weeks if they have lost work due to COVID-19.
People who are eligible for EI will must have previously worked 120 hours to qualify, which is lower than current requirements. They will also receive $400 per week.
The Liberals are also introducing caregiving and sickness benefits for people who are supporting dependents or unable to work due to sickness or self-isolation. Eligible applicants will receive $500 per week.
“We’ll be establishing a minimum EI benefit amount of $400 per week to ensure no one receiving EI is receiving less than someone on the recovery benefit,” explained Qualtrough.
Under the new EI rules, Canadians will also be able to keep more of their benefits while earning money.
EI premiums for workers and employers will also be frozen at 2020 levels for two years. Freeland said the rate for workers will be frozen at $1.58 per $100 of insurable earnings and the rate for employers will be frozen at $2.21 per $100 of insurable earnings.
She called the move a “significant economic boost” and urged employers to re-hire workers rather than pay for EI premiums.
“Canadian businesses, please use this saved money to hire back some of your excellent and beloved workers,” Freeland said.