With the end of the Canada Emergency Response Benefit (CERB) fast approaching, the federal government announced on August 20 a number of major changes to the Employment Insurance (EI) program, including the creation of three new economic recovery benefits. In addition, as part of this transition and to ensure continued support for workers whose employment has been impacted by the COVID-19 pandemic, the government extended the CERB for an additional four weeks, bringing the maximum benefit period to 28 weeks
This update presents an overview of the most important measures announced by the government that aim to support Canadians in the next phase of the country’s economic recovery.
Employment insurance, simplified
The government has announced the implementation of certain measures to make it easier to access EI benefits for workers who, until now, have been eligible to receive the CERB. Some of these measures incorporate the bulk of legislative changes brought to the Employment Insurance Act (Emergency Response Benefit) under Interim Order No. 7.These measures include the following:
|Minimum EI unemployment rate||To reduce the number of hours of insurable employment required to be eligible for EI, the minimum unemployment rate was established at 13.1% for all EI economic regions, starting on August 9, 2020 and ending on September 5, 2020. As a result, this measure will set a uniform eligibility requirement of 420 hours of insurable employment for all regular EI benefits, provide for a minimum entitlement of 26 weeks of regular benefits, and the weekly benefit rate will be now be calculated based on the 14 best weeks of earnings. The number of insurable employment hours required to receive EI special benefits (sickness, maternity/parental, compassionate care or family caregiver) remains 600.|
|One-time insurable hours credit||EI claimants will receive a temporary, one-time insurable hours credit of up to:300 insurable hours for claims for regular benefits or work-share benefits; or480 insurable hours for claims for special benefits.In other words, claimants need only accumulate 120 hours of insurable employment in the year prior to their application or since their last claim to be eligible for EI benefits.This credit is only offered once to new claimants, and only for a one-year period.|
|Minimum benefit rate||The minimum EI benefit rate will be $400 per week (or $240 for extended parental benefits), if this amount is higher than what their benefits would otherwise be.|
|EI premium rate freeze||The EI premium rate for the next two years will be:$1.58 per $100 of insurable earnings for employees; and$2.21 per $100 of insurable earnings for employers, or 1.4 times the employee rate.|
|Calculation method for EI fishing benefits||EI fishing benefits will be calculated using the claimants’ actual fishing earnings for their current claim, or, if higher, their fishing earnings from their claim for the same season in the previous year.|
It should be noted that Quebec residents will not be eligible for the federal maternity/parental measures, as they will be receiving maternity, paternity, parental and adoption benefits under the Quebec Parental Insurance Plan.
The federal government is planning on implementing these measures starting on September 27, 2020. It is expected that the government will adopt new regulations in the next weeks to reflect the changes made to this EI benefit.4 We will keep you updated if any further changes are made in this regard.
Economic recovery benefits
The federal government plans on introducing three new income support benefits to replace the CERB for workers not eligible for EI. These three benefits can be summarized as follows:
|Economic recovery benefits||Details|
|Canada Recovery Benefit (CRB)||General information:The CRB will target workers who are not eligible for EI, mainly the self-employed. It will provide a $400 benefit per week for up to 26 weeks, and will be taxable.Eligibility criteria:The CRB will be available to residents in Canada who:are at least 15 years old and have a valid social insurance number (SIN);have stopped working due to the COVID-19 pandemic and are available and looking for work; or are working and have had a reduction in their employment/self-employment income for reasons related to COVID-19 (based on attestation);are not eligible for EI;had employment and/or self-employment income of at least $5,000 in 2019 or in 2020; andhave not quit their job voluntarily.RepaymentAlthough workers will be allowed to earn income from employment and/or self-employment while receiving the CRB (as long as they continue to meet the other eligibility requirements), they will be required to repay half of every dollar earned should their annual net income be over $38,000 in the calendar year. Repayment will be capped at the amount of benefit received under the CRB.Application for benefitsWorkers will need to apply for the CRB after every two-week period for which they are seeking income support.|
|Canada Recovery Sickness Benefit (CRSB)||General information:The CRSB is intended for workers who are unable to work because they are sick or must self-isolate due to COVID 19. This benefit will provide $500 per week for up to two weeks and will be taxable.Eligibility criteria: The CRSB will be available to:residents in Canada who are at least 15 years of age and have a valid SIN;workers employed or self-employed at the time of the application; andworkers who earned at least $5,000 in 2019 or in 2020.Workers will need to have missed a minimum of 60% of their scheduled work in the week for which they are claiming the CRSB. Note that workers who are receiving other paid sick leave for the same period will not be entitled to the CRSB.Workers will not be required to have a medical certificate to qualify for the CRSB, but they must attest that they meet all of the requirements.|
|Canada Recovery Caregiving Benefit (CRCB)||General information:The CRCB is intended for employees who have been unable to work because they needed to provide care to children or support other dependents who had to stay home due to the closure of schools and other daycare and day program facilities.This benefit will provide $500 per week, per household, for up to 26 weeks and will be taxable. In other words, two members of a family residing in the same household may not receive the CRCB for the same period.Eligibility criteria:To be eligible for the CRCB, claimants must:reside in Canada;be at least 15 years of age on the first day of the period for which they apply for the benefit;have a valid SIN;be employed or self-employed on the day immediately preceding the period for which the application is made;have earned at least $5,000 in 2019 or in 2020;have been unable to work for at least 60% of their normal work schedule within a given week because of one of the following conditions:they must take care of a child who is under 12 years of age on the first day of the period for which the benefit is claimed:because their school or daycare is closed or operates under an alternative schedule for reasons related to the COVID 19 pandemic;who cannot attend school or daycare and, under the advice of a medical professional, are deemed to be at high risk if they contract COVID 19;because the caregiver who usually provides care is not available for reasons related to the COVID 19 pandemic;they must provide care for a family member with a disability or a dependent:because their day program or care facility is closed or operates under an alternative schedule for reasons related to COVID 19;who cannot attend their daycare or care facility because, under the advice of a medical professional, are found to beat high risk if they contract COVID 19;because the caregiver who usually provides care is not available for reasons related to the COVID 19 pandemic;not be on paid leave from an employer for the same week; andnot be in receipt of benefits under the CERB, the EI Emergency Response Benefit (ERB), the Canada Recovery Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB), short-term disability benefits, workers’ compensation benefits, or any EI benefits, including the Quebec Parental Insurant Plan (QPIP) benefits, in respect of the same week.Application for benefitsWorkers will need to apply for the CRCB after each week of leave they take to provide care for a dependent.|
The federal government intends to implement these three new benefits, which will come into force for a one-year period starting on September 27, 2020. Eligible workers can file their applications with the Canada Revenue Agency (CRA).
The government should be introducing a bill within the next few weeks for the purposes of implementing these three new benefits. We will keep you informed of any changes in this regard.
Canada Emergency Response Benefit
It should be noted that the CERB is available between March 15 to October 3, 2020. Eligible workers have until December 2, 2020, to make a claim in relation to that period. For more information on the CERB and its eligibility requirements, please see our latest publication: “Canada Emergency Response Benefit: Update.”