On August 20, 2020, the Canadian Federal Government announced that it will be extending the Canada Emergency Response Benefit (“CERB”) for a further four weeks to a maximum of 28 weeks, and will be making changes to the Employment Insurance (“EI”) regime. The changes to the EI regime are expected to cost around $37 billion, and will be in place for one year. The key details of this announcement are set out below.
The CERB has been a fundamental piece of the Federal Government’s COVID-19 relief and recovery plan. Prior to yesterday’s announcement, the CERB program would have concluded at the end of August. It will now be extended to September 26, 2020.
As part of the transition away from the CERB, the Federal Government will be implementing a simplified version of the EI regime to provide support to those who remain unable to work, and introducing a new suite of temporary recovery benefits. The new EI regime and benefits suite are slated to take effect September 27, 2020.
EI Regime Changes
The key changes to the EI regime include:
- Temporary measures will be in place to allow Canadians to access EI benefits more easily, including reducing the required number of insurable hours to qualify for EI to 120 hours Eligible applicants will receive a minimum benefit rate of $400 per week, (or $240 for extended parental benefits) and receive at least 26 weeks of regular benefits.
- Hours credits to enhance access to EI regular benefits and EI special benefits. EI claimants will receive a one-time insurable hours credit of 300 insurable hours for claims for regular benefits (job loss) and 480 insurable hours for claims for special benefits (sickness, maternity/parental, compassionate care or family caregiver). The hours credit is also retroactive to March 15, 2020, to allow for early transition from CERB to EI maternity, parental, compassionate care, family caregiver or work-sharing benefits.
- Freezing the EI premium rate for employees at the 2020 level of $1.58 per $100 of insurable earnings for the next two years. The rate for employers, which is 1.4 times the employee rate, will also remain unchanged at $2.21 per $100 of insurable earnings. This will ensure that neither employers nor employees pay increased EI premiums in this time of economic uncertainty.
- Use of a minimum EI unemployment rate across Canada of 13.1%, in order to lower the hours required to qualify for regular EI benefits. This new rate will be in effect for one year from its effective date of August 9, 2020. For economic regions with a higher unemployment rate, benefits will be calculated based upon that higher rate, while for economic regions with a lower unemployment rate, benefits will be calculated based upon this minimum rate of 13.1%.
New Recovery Benefits
The Federal Government has also announced the following new recovery benefits:
- The Canada Recovery Benefit (CRB) will provide $400 per week for up to 26 weeks, to workers who are self-employed or are not eligible for EI and who still require income support and who are available for and looking for work. Claimants would need to repay some or all of the benefit through their income tax return if their annual net income, excluding the CRB payment, is over $38,000.
- The Canada Recovery Sickness Benefit (CRSB) will provide $500 per week for up to two weeks, for workers who are sick or must self-isolate for reasons related to COVID-19. Workers would not be required to have a medical certificate to qualify for the benefit, but they could not claim the benefit if they receive other paid sick leave for the same benefit period. Workers need to miss at least 60% of their scheduled work in the week for which they claim the benefit.
- The Canada Recovery Caregiving Benefit (CRCB) will provide $500 per week for up to 26 weeks per household, for eligible Canadians unable to work because they care for:
- (a) a child under age 12 due to school or daycare closures because of COVID-19, or the usual caregiver is not available for reasons related to COVID-19,
- (b) a family member with a disability or a dependent because a daycare program or care facility is closed due to COVID-19, or the usual caregiver is not available for reasons related to COVID-19, or
- (c) a child, a family member with a disability, or a dependent who is not attending school, daycare, or other care facilities under the advice of a medical professional due to increased medical risks if that person contracts COVID-19.
The Federal Government will introduce new legislation to support the implementation of these benefits. We will continue to monitor these developments and will provide updates as legislation is released.
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