Liberals to replace CERB with new benefit, simplified EI program at cost of $37B

The federal Liberals are rolling out a $37-billion income support plan for workers whose earnings have crashed during the pandemic.

The details released Thursday outline what will happen to some four million workers receiving the $500-a-week Canada Emergency Response Benefit, which is set to wind down starting next month.

The CERB will be extended another four weeks and a new benefit that pays $400 a week for up to 26 weeks will replace it for those ineligible for employment insurance. Anyone eligible for EI will receive the same minimum for at least 26 weeks and will be required to have worked 120 hours to qualify, well below current EI requirements, since many Canadians have been unable to work due to the pandemic. There will also be a $500-a-week sickness benefit and caregiving benefit for anyone who has to stay home because they’re ill or because school or daycare is closed.

Read: Canada sets temporary minimum unemployment rate for EI

Changes are also coming in to allow workers to keep more of their benefits even while they’re working, eliminating the earnings cliff created under CERB that acted as a disincentive to work. The three new benefits are expected to cost $22 billion and will be brought in through legislation once the House of Commons returns after it was prorogued this week.

The CERB extension is expected to cost a further $8 billion, with $7 billion more to the EI system and can be done through powers that Employment Minister Carla Qualtrough already has to create temporary EI measures.

EI premiums for employers and employees will be frozen for the next two years.

Read: Could the pandemic prompt employment insurance reforms?

Government officials estimate about one million people will need the new benefit that replaces the CERB and three million will go onto the simplified EI program. One federal official said these numbers remained high compared to what’s normally seen with the EI program. Officials spoke at a media briefing Thursday that was provided on the condition they not be identified.

The official said the number of claims is more typical to what would be seen in an entire year or even over two years.

The government estimate 400,000 people will receive benefits who otherwise wouldn’t have qualified for EI when the CERB ends.

Since mid-March, the CERB has paid almost $69.4 billion in benefits to 8.61 million people, of which 4.1 million have since returned to the labour market.

Read: Contract, self-employed Canadians worry about end of coronavirus support