Written by Andrew Langille
I have fielded countless inquiries about the Canada Emergency Response Benefit (“CERB”). While at first glance CERB appears to be working, if we assess the rush for expediency, the mechanics, and the scope of the program, large errors in how the CERB was formulated become apparent. These errors run the risk of prolonging or increasing the suffering of vulnerable, precariousworkers and may place some in a position of having to repay debts arising from CERB into old age.
In this post, I sketch out the core problems with CERB in the hope that the Federal government moves to further remedy a situation that could end disastrously. Then I briefly survey select proposals on how CERB could be improved and recommend fixes to ensure that society’s most vulnerable workers have the appropriate income security supports.
CERB’s first error was that it did not have a wider universal effect (this critique extends also to Employment Insurance (“EI”) and Canada Emergency Wage Subsidy); a decision was taken early on to exclude huge swathes of the working population. The excluded groups include: undocumented and non-status workers; many seasonal workers; new labour market entrants with under $5,000.00 in earnings; owner-operators; post-secondary students; long-term unemployed workers, unemployed workers currently on EI, and those with expired EI claims prior to January 1, 2020; workers with regular, but reduced hours; and, workers with low labour market attachment.
The Federal government seemed to go out of its way to exclude some of the most vulnerable, precarious workers in the labour market. This model of structural exclusion, which mirrors similar problems with EI, was a critical blunder that will force hundreds of thousands deeper into poverty. A choice could have been made to utilize universality for the low-income, working population or something approaching it as a design principle in crafting CERB to capture the largest number of vulnerable people out of work due to the pandemic, but the choice was taken to limit who could qualify and the criteria to access CERB currently stands as: no simultaneous receipt of or application for CERB or EI benefits; cannot have quit a job voluntarily; fifteen years of age or older; have earned a minimum of $5000 in 2019 or in the previous twelve months from employment, self-employment, or via maternity or paternity benefits; and, for the initial eligibility period will not receive for fourteen consecutive days in the initial application period any income greater than $1000 from employment, self-employment, or via maternity or paternity benefits. For subsequent eligibility periods income from employment, self-employment, or via maternity or paternity benefits must be less than $1,000.
There is logic in structuring a benefit program to assist workers out of work and to encourage people to stay home in the midst of a pandemic as a means to reduce transmission. But the CERB actually forces or encourages non-essential workers to remain employed in dangerous, risky environments as the criteria to qualify, in many situations, is onerous or impossible to meet and does not provide the required level of income replacement. The criteria that a worker cannot quit a job voluntarily is but one example of how the design of eligibility criteria forces workers to remain in employment in environments where health and safety isn’t taken seriously or adequate precautions against transmission aren’t enacted. I have advised numerous workers, with precarious, non-standard, or part-time work, about questions relating to qualifying for CERB. Many of these workers face tough decisions regarding reducing part-time work in order to proactively meet the criteria of receiving no income or under $1000 per benefit period about their inability to qualify for CERB or the steps that would have to be taken to not offend the criterion that they not quit their jobs voluntarily.
The next point speaks to the inadequacy of the income replacement rate under both CERB and EI, which CERB was modeled after. The CERB pays recipients $2,000 every four weeks to a maximum of $8,000 after sixteen weeks, while EI benefits pay out 55% of average insurable weekly earnings up to a maximum of $54,200, which means the maximum you can receive is $573 per week. Under either program many workers are hard pressed to support their families or keep up with their financial obligations while receiving at little over $2,150 per month. This inadequacy becomes particularly salient in large urban centres in western and central Canada where the cost of living is high. Federal (and provincial) income security programshave been steadily eroded, both in terms of who can qualify and what the income replacement rate is, since the 1970s by successive Liberal and Conservative governments. The CERB and EI are not providing recipients enough funds and this issue will only grow more pronounced as bills mount over the coming months and economic problems mount. This is central flaw in the design of all income security programs in Canada: the benefits are generally insufficient to cover household expenses and meet the necessities of life.
The design of the application process for CERB explicitly excludes any screening, which means that anyone who applies for the CERB will receive it regardless of whether they met the actual criteria. As long as you have a SIN number you can apply for and receive the CERB. This is problematic, as the Federal government seems to be altering on the fly the criteria for who qualifies for CERB. Incredibly, some senior Federal Liberals, such as Toronto MP Adam Vaughan, seem intent on telling people to fib to qualify for CERB, which truly baffles me given the myriad ramifications of a Minister of the Crown providing erroneous information on a key government benefit.
Let me clarify the import of misinformation being provided to vulnerable, precarious workers and what can result. When one receives a government benefit erroneously most often an overpayment is created. The overpayment becomes a recoverable debt payable to the government. The problem with CERB is that for many low-income or precariously employed workers who don’t qualify, but apply for and receive the CERB, is that they will potentially be left with overpayment ranging from $2,000 up to $8,000 depending on how long they collect the benefit for. If multiple members of a household erroneously receive the CERB then the overpayment could rise past $10,000 or $20,000. Given that I mainly represent low-income, precariously employed workers, this is my greatest fear: widespread overpayments owing to the government because the scope of who qualified for CERB was specifically gamed to exclude the working poor and the precariously employed. This could conceivably put people into debt for life.
This problem could become further magnified if those who receive but don’t qualify for the CERB also receive social welfare benefits. Those benefits may get administratively clawed back due to erroneous receipt of the CERB, which would be on top of any overpayment potentially. Aside from British Columbia, regardless of whether one is appropriately receiving CERB, if a person is receiving CERB and social welfare benefits simultaneously then the social welfare benefits will be clawed back dollar for dollar; this is an issue that the Federal government could have easily addressed in the statute or regulations or negotiated with the provinces, but chose not to.
There is also a concern about how the Canada Revenue Agency (“CRA”) will assess if someone qualifies for the CERB. The most logical approach would be to utilize tax filing and EI records to assess eligibility, but this ignores that many vulnerable, precarious workers are engaged in precarious, off-the-books, or grey market work where cash payment is the norm, taxes aren’t paid, employment standards breaches are routine, and their records, if they exist at all, aren’t in order. There is a question of how the eligibility rules will be enforced and whether the CRA will target precarious, vulnerable groups of workers; this is a potential problem that would have to be vigorously resisted and litigated if it does come to pass.
There have been various proposals advanced to strengthen the CERB, notably ones have come from: the Federal NDP, which proposes then bizarrely walks back a basic income proposal, but in the end merely suggests statutory changes; the Canadian Centre for Policy Alternatives, which advances sensible proposals on increasing scope of CERB’s coverage, topping up EI recipients to $500 per week, and prohibiting a claw-back where a CERB recipient is also receiving social welfare benefits; the Migrant Rights Network, which has proposals aimed at securing protections for migrants and non-status individuals; the Workers’ Action Centre proposes improvements to both employment standards and EI; and, the Broadbent Institute, which suggests a number of statutory changes to extend coverage of the CERB and to integrate CERB better with provincial social welfare programs. All of these proposals contain excellent analysis and proposals, and each should be closely examined by policy makers.
The following are my key recommendations for fixing CERB:
(1) expand CERB coverage to the previously mentioned excluded groups of labour market participants who currently lack coverage under CERB or EI;
(2) retroactively top up EI benefits to $750 per week for all current EI recipients for the duration of the crisis in acknowledgement of increased expenses arising from Covid-19, and retroactively increase the payments from CERB/EI to $3000 per four week period for the duration of the crisis;
(3) enshrine via statute or a negotiate agreement that provincial social welfare benefits cannot be clawed back due to receipt of the CERB;
(4) introduce explicit reforms to allow the following: undocumented and non-status workers to access the CERB; those with recently expired SIN or implied status a means to access CERB and obtain new SINs (this is a major issue for international students on study permits); create a rapid means of access to Individual Tax Numbers for individuals unable to obtain or without SINs; and, engage in advocacy advertising and outreach to inform Canadian migrant, undocumented, and non-status communities about their ability to access benefits and a statutory directive to Immigration, Refugee, and Citizenship Canada not to target or engage in reprisals against migrant, undocumented, and non-status persons who access CERB;
(5) eliminate the requirement to access CERB that a person has not quit their job voluntarily;
(6) change the requirement to access CERB to earning a minimum of $2,500, rather than $5,000, in income in the last twelve months or in 2019 from employment, self-employment, or maternity or paternity leave benefits; and,
(7) waive any overpayments arising from non-eligibility for the CERB for low-income workers earning incomes below $25,000 in 2019 or 2020.
While these fixes will inevitably increase the cost of CERB and EI in the short-term and are premised on a few non-orthodox policy approaches, the goals of these proposals is to ensure that emergency funds reach Canada’s most precarious, vulnerable groups participating in the labour market. Ensuring that society’s most disadvantage workers can whether this crisis is a test of our social contract and the Federal government’s principles.
Much has been said about the Federal government’s commitment to social justice; it’s time that they truly commit, in the time of greatest need, to ensuring that our most precarious, vulnerable workers are taken care of. I would ask that everyone share this blog post with their friends, family, and co-workers, and share this blog post with or write their local MP to ask that changes are made to how the CERB and EI are structured and administered both during this crisis and after it.
Andrew Langille, “How the Canada Emergency Response Benefit Failing Low-Income Precarious Workers, and How it Can be Fixed” Canadian Law of Work Forum (April 17 2020): https://lawofwork.ca/how-the-canada-emergency-response-benefit-is-failing-low-income-precarious-workers-and-how-it-can-be-fixed/