The vast swath of Canadians unemployed due to the pandemic has made it imperative to distribute cash quickly and with few questions asked, he said last Thursday.
Yet these numbers raise questions about who exactly receives the Canadian Emergency Response Benefit (CERB).
Statistics Canada’s labor force survey for the past month, completed on April 18, indicates that three million people have lost their jobs and 2.5 million have worked less than half their normal hours since the start of the pandemic. – 5.5 million in total.
But on April 19, the government received CERB applications from 6.7 million people, a difference of more than a million people.
Economists are divided on what it means. Some suggest that this is simply a statistical anomaly, as the employment figures do not correspond chronologically to CERB statistics.
“It’s close enough that it’s probably a timing issue,” said David Macdonald, senior economist at the Canadian Center for Policy Alternatives.
Others believe that this is explained at least in part by the fact that Canadians benefit from a widely open benefit plan, legally or otherwise.
“The potential for abuse or opportunistic behavior in this program is enormous,” said Philip Cross, a former economist at Statistics Canada and a researcher at the Macdonald-Laurier Institute. “If you announce that you’re going to be approved – no questions asked – you’re going to get retirees to ask for it.” “
At the very least, the lack of statistics suggests that there is still a lot to learn about one of the most expensive government assistance programs ever deployed in Canada, which contributed $ 35 billion in just over $ ‘a month.
The capacity for abuse or opportunistic behavior in this program is enormous
CERB provides $ 2,000 per month to people who “stopped working” due to the pandemic, provided they have earned $ 5,000 in the past 12 months and have not stopped voluntarily.
The program has widespread and multi-stakeholder support to help Canadians who are struggling to make ends meet after the national economy shuts down to contain COVID-19.
But in recent days there has been an increasing focus on whether the government could have done more to avoid waste.
Guidance notes sent to employees of Employment and Social Development Canada – copies of which were obtained by the National post – advise them to essentially ignore potential abuses and approve payments even for people who have left their jobs voluntarily or have been dismissed for just cause, apparently in violation of the rules.
There is also anecdotal evidence of cheating or legal use of the program that appears to contradict its purpose of emergency relief.
A source familiar with the system said on Tuesday that people who had not reported any income for years – probably because they worked under the table – regularly received CERB.
Mortgage broker Ron Butler says his business recently discovered that a client about to buy a new home received a CERB payment while he was full-time.
The client stated that his two cousins had recommended asking for the document, as they had done. But it was a fraud that Butler had to report to the bank. Who in turn canceled the man’s mortgage.
“His reaction was extremely disappointing,” said the broker.
Butler noted that many Canadians “desperately need” the CERB, but said he has seen other cases of questionable use of the program.
A friend with a $ 2.5 million house and $ 3 million in cash had to close her small business due to the foreclosure and, on an experimental basis, requested CERB. A payment of $ 2,000 appeared on his account the next day. Personal property has no impact on eligibility for CERB or regular employment insurance.
The tradeoff would be that 99 legitimate applicants have not received their money for a month and a half
The most recent employment data is based on a Statistics Canada survey from April 12 to 18, showing that 5.5 million had lost their jobs or earned less than half their usual income since February.
As of April 19, 6.73 million Canadians have applied for CERB and $ 19.8 billion has been paid. The number of candidates has since climbed to almost 8 million.
The rapidly changing job landscape means that Statistics Canada numbers are unlikely to keep pace with the growing number of unemployed – and demands from CERB, said Macdonald.
He acknowledged that there was no doubt fraud, but said that the application of the usual safeguards would have been disastrous.
“You could probably have taken that one in a hundred trying to defraud the system,” he said. “But the compromise would be that 99 legitimate applicants did not receive their money for a month and a half and therefore had to go to a food bank. “
Cross said that Statistics Canada figures may not take into account some self-employed workers who earn reduced income but are eligible for CERB. A person who earns less than $ 1,000 in four weeks is still eligible.
Trudeau and other government officials have said that the improper payments will eventually be recovered from the back end through the income tax system.
But a harsh warning before cheaters were prosecuted could have prevented many abuses, said economist Jack Mintz of the University of Calgary School of Public Policy.
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