Canada’s Covid-19 Response

The great thing about building a blogger network is that you can make friends with people from around the world. In writing about US policies and politics, I often neglect to consider what other countries are doing. It makes sense, since I live in the States, that most of my policy posts will be about the States. But, sometimes its interesting to compare. So, I asked one of my Canadian friends to write about Canada’s response to Covid-19, as a guest post here (and I wrote about the US response for her audience!).

Here is a brief run down of Canada’s Covid-19 response, written by Canadian Blogger Tara from Our Bill Pickle. 

Canada’s Covid-19 Response

Recapping Canada’s response to the COVID-19 pandemic is challenging.

Each province has its own approach (granted, there are certainly areas of alignment), federal efforts underway touch on a wide variety of different groups across a wide variety of different sectors. This includes individuals, businesses, specific sectors and organizations that help Canadians.

And there are changes every day. Canada’s COVID-19 Economic Response Plan appears to very much be a living document, subject to change as new information is received.  This is a good thing.

One thing you won’t find when you look at Canada’s plan is the most well-known element of the economic response in the United States: stimulus cheques.

Instead, the Government of Canada offers something different: the Canada Emergency Response Benefit.

What is the Canada Emergency Response Benefit?

In brief, the Canada Emergency Response Benefit – or CERB — is the main support program put in place for individuals whose employment situation has been impacted by COVID-19.

CERB was announced on March 25, 2020 and was created by rolling two previously announced programs – the emergency care benefit and the emergency support benefit—into a single, more streamlined program.

Through CERB, eligible workers who have stopped working or those whose hours have been reduced due to COVID-19 are eligible for a taxable benefit of $2,000 every four weeks for up to 24 weeks. Originally, the program was set to be in place for 16 weeks, but on June 16, the federal government announced it would be extended for an additional eight weeks. This was done in recognition of the reality that there are still challenges associated with restarting the economy.

The benefit is available from March 15, 2020, to October 3, 2020. There are options for retroactive payments within that period if the application is made no later than December 2, 2020.

Who is Eligible for the Canada Response Benefit?

What makes CERB different from a stimulus cheque program is the fact that not every Canadian is eligible to receive this benefit. Instead, CERB focuses on providing support to those whose employment has been impacted by COVID-19.

The broad eligibility requirements for CERB are straightforward: you must be residing in Canada, at least 15 years old, and you can’t have quit your job voluntarily.

When it comes to the reason why you’re not working, there are three scenarios that make you eligible for this benefit: you’ve stopped working because of reasons related to COVID-19; you are eligible for Employment Insurance regular or sickness benefits; or you have exhausted your Employment regular benefits or Employment Insurance fishing benefits between December 29, 2019 and October 3, 2020.

The final broad criterion: you must have employment or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of your application.

To clarify eligibility for specific situations, the Government of Canada has included information for several different groups, from self-employed folks to new parents right on the application form. There’s also a very detailed question and answer document available here. =

The application progress is completed online and includes a questionnaire to help determine if CERB is the right benefit program for you.  The benefit is scheduled to arrive within 10 days of the approved application.

What are the Pros of the Canada Response Benefit?

One of the most interesting pieces of commentary I have seen about CERB since it launched was in the Globe and Mail. The piece, which you can read here, speaks to how CERB is essentially an unintentional experiment with Universal Basic Income.

Melanie did a great primer on Universal Basic Income here but the gist is simple: this is a system where the government pays all its citizens a monthly stipend to spend on whatever they want or need without oversight.

One piece of the Globe and Mail commentary stood out to me:

“The largest experiment in basic income that anyone could imagine has been forced upon us by COVID-19. It has produced a national awareness that any Canadian, except for the very wealthy, might need an income top-up for reasons completely beyond their control.

In the “lessons learned” process that will follow the pandemic, we have a historic opportunity for Ottawa, the provinces and territories to reshape cash transfers for Canadians who have low incomes, regardless of the reason why.

COVID-19 could create a legacy: an income-support system that is efficient, non-stigmatizing, encourages work and is sufficient to provide better health outcomes and liquidity for people and communities. This would be a streamlined national reform vital to the economics of rebuilding and recovery.”

I love this take and hope the idea put forth in that second paragraph comes to fruition when we’re in a place down the road to really assess what worked and what didn’t work with our COVID-19 response.

A smaller point, but another important detail about CERB is that it doesn’t mean you can’t make any money. During the four-week benefit period, you can earn up to $1,000.  Depending on your situation, the ability to top-up your CERB benefit might make a difference for your family.

What are the Cons of the Canada Response Benefit?

The main criticism of this program, especially as countries around the world start to look at recovery from the first wave, is that it is a disincentive to work.

Dan Kelly, the president of the Canadian Federation of Independent Business, told Global News:

“We certainly have members who are telling us that when they call their workers and ask them to come back, the worker says, ‘You know, I’m good. My bills are being paid. I’m just going to take the rest of the summer off, see how things go and give me a call in the fall.”

In the same article, Kelly acknowledged this isn’t the only reason some workers aren’t returning – health concerns as well as lack of reliable childcare are also influencing factors. But the reality is there are some folks who will be making more on CERB than they do at their jobs – and that’s sad.

While I would personally question how widespread the first reason for not returning to work is, I don’t doubt that it is a challenge for businesses to navigate. In fact, one local shop in my area noted in a newsletter they were not sure when they could reopen due to all staff being unavailable. It wasn’t clear why that was the case – if it was because of the benefit or one of the myriads of other reasons – but it is a reality many businesses are facing.

One step the federal government has taken to address this is to include on the application form beginning July 5, 2020 an attestation that the applicant is looking for and willing to go back to work. 

The other thing to note about CERB is that it is income you need to report on your taxes – and nothing is taken out of it.  Depending on your scenario, this might not be a huge problem, since you’re bringing in less money in general, but it is important to keep in mind.  

Final Thoughts

There is no perfect economic solution for COVID-19.

This pandemic is not a situation anyone ever could have predicted. In many ways, it seems like we’re all just trying to find a way to handle it – and that includes our governments.

Is CERB a perfect program? No. But in my opinion, there can’t be a perfect program. I think that’s reflective of the reality that we live in a world that is rife with inequality. We don’t have programs to absolutely address this when times are good, let alone when things are hard.

All that being said, I like that through CERB, the Canadian government seems to be focused on helping those who need financial support most. That’s not to say I think a program that gives stimulus cheques to all (or, at least, most) of the population is bad – I can certainly think of some ways I would spend a stimulus cheque! – I just prefer this approach. To me, it reflects what I think about when I think about Canadian values – mainly, caring for others. Canada’s not a perfect country and we don’t nail that all the time, but I feel CERB represents a genuine effort to meet people where they are and provide a hand up.   

 

Tara is a writer and personal finance blogger who lives in Atlantic Canada. Her blog, Our Bill Pickle, focuses on the good, bad and ugly of living real life with (very) real debt. When she’s not writing about money, she’s tweeting about hockey, reading romance novels and/or drinking coffee.