Extending CERB to 2021 would cost Ottawa an additional $ 57 billion, more than double original estimates: PBO


OTTAWA – Extension of the Liberal government’s main COVID-19 employment insurance program could cost taxpayers $ 57 billion more, more than double its current price, according to a new report.Such an extension would bring the total cost of the Canadian Emergency Response Service (CERB) to $ 100 billion, up from an original estimate of $ 35 billion, according to new estimates from the Parliamentary Budget Office.

However, extending CERB in its current form to 2021 would still be cheaper than a rival Conservative plan to modify the program, which would cost taxpayers $ 63 billion, the report said.

The report, released Wednesday, highlights the very complex issue facing Ottawa as the country emerges from the first wave of the pandemic and seeks to unravel some of its extensive social support programs.

Prime Minister Justin Trudeau has already spent $ 43 billion on CERB, which provides $ 2,000 a month to people who have lost their jobs due to the COVID-19 pandemic. This price tag is well above initial estimates, as rising unemployment has so far pushed 8.41 million people into weekly benefits.

In the meantime, only $ 10 billion of an estimated $ 73 billion has been spent on the Liberal wage subsidy program, which was structured to keep Canadians employed during the recession, thereby accelerating economic recovery. Industry groups have claimed that the program is highly under-subscribed due to Ottawa’s delay in implementing the program.

Now, officials in Ottawa must determine the best way to roll back the CERB and, hopefully, bring its eight million job applicants back. This will take a skillful hand, said Parliamentary Budget Officer Yves Giroux, as the government will likely have to cut weekly payments under the program while expanding eligibility, as more workers are forced into work situations. part-time that may not cover living expenses.

“This is the big headache the government will face when phasing out these programs,” he said.

“It’s always a compromise between the cost and the number of people you want to cover and any potential deterrence to work. “

It’s always a compromise

PBO compared two scenarios in its report. Expanding CERB in its current form until January 2021 is estimated to cost $ 57 billion. It also considered a proposal by Conservative MP Dan Albas that would phase out the program by offering applicants 50 ¢ for every dollar they earn in their jobs.

The Conservatives’ proposal is slightly more expensive at $ 63 billion, the report said, because it would allow those earning more than $ 1,000 to access benefits, which would greatly increase the number of people eligible to apply. The current CERB, by comparison, is inaccessible to anyone earning more than $ 1,000 a month.

Political parties have been stuck in the debate over the past few days on how to modify or expand the CERB, as they seek an agreement before the suspension of parliament this week.

NDP leader Jagmeet Singh on Tuesday called on the Liberal government to extend the CERB for an additional four months, saying that there were “uncertainty over the return to work” for many families.

“At a minimum, let’s give families some confidence that they will have support until the economy really reopens,” he said in an interview with CBC on Tuesday.

Prime Minister Justin Trudeau speaks during the special committee on the COVID-19 pandemic in the House of Commons on June 10, 2020.

Sean Kilpatrick / The Canadian Press

Bloc Québécois leader Yves-François Blanchet opposed automatic extension of spending programs, accusing the Liberal government of seeking a “rubber stamp” for its programs as Parliament nears its suspension for summer. He said that the Trudeau government acted “as if it were a majority government led by some sort of prince, which is not the case.”

Trudeau, in recent days, has sought to allay concerns about the rising costs of CERB, to toughen up his position against those who abuse it and to say that Ottawa “would cause us to punish those who try to take advantage of this situation”.

The Liberal government is currently poised to run a deficit of about $ 260 billion in 2021, according to the PBO, after unveiling more than $ 150 billion in financial assistance programs during the COVID-19 pandemic.

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