Federal government unveils $ 37 billion CERB transition plan, implementing new health and care benefits

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OTTAWA – Federal government extends Canada Emergency Response Benefit (CERB) until September, before moving millions of people who still apply for CERB to a revamped EI program starting September 27 . The new plan released Thursday details how most people will switch to EI, although three new temporary benefits are also being put in place, including some form of paid sick leave. In total, these new financial assistance plans are expected to cost at least $ 37 billion over the next year.

Chrystia Freeland – who is making her first announcement as Minister of Finance for Canada – alongside Minister of Employment, Workforce Development and Disability Inclusion, Carla Qualtrough, speak on plan for the next phase of the recovery.

While the economic reopening has allowed millions of people to return to work, there are still millions of unemployed Canadians, especially in hardest hit industries who will take longer to recover from the impact of COVID-19.

While CERB was scheduled to run out earlier this month for those who participated in the program from the start, the government is extending the program for another four weeks, up to a maximum of 28 weeks.

Then, effective September 27, almost all CERB recipients who are eligible for EI will be transferred to this program as a livelihood once their 28 weeks of CERB have been used up.

“With an overall goal of supporting economic recovery, the ad follows an approach that provides support to workers while strengthening work incentives, facilitates access to the EI program and improves fairness,” said a senior official speaking with reporters of a non-attribution. basis of the presentation of the new plan.

For the most part, this transition will be automatic, but the government says there will be “a few instances” where applications will need to be made, and these people will be contacted.

The EI system itself is getting a makeover, opening up the criteria for next year so that Canadians with 120 insurable hours in Canada can apply and receive a minimum payment of $ 400 per week and a maximum of $ 573 per week, depending on previous earnings.

Reworked EI can be requested for a period ranging from 26 to 45 weeks, depending on the time worked previously.

EI claimants can earn income, but will have their benefits adjusted, reducing their benefits by $ 0.50 for every dollar of earnings. The government is also freezing the EI premium rate for two years because it is generally expected to increase, which would increase costs for workers and employers.

The long-standing intention of the program remains: as financial assistance to employees who involuntarily lose their jobs and are actively looking for work.

These changes can be implemented by regulation through interim ministerial orders, although the three new benefits are delivered through legislation, which will have to wait to be tabled until Parliament resumes on September 23 given of the current extension.

When Prime Minister Justin Trudeau announced the prorogation on Tuesday, he signaled his intention to return with a Speech from the Throne outlining bold new policy measures to address the inequalities exposed in Canada’s social supports and economic system.

“It will take time to make up for the economic ground that we have lost due to this pandemic. It will take hard work to correct these discrepancies… We have supported Canadians with a huge emergency response to ensure that everyone can cope during this time. We have carefully and successfully reopened many parts of the economy. Now we also need to look to the future, ”Trudeau said.

THREE NEW ADVANTAGES

In addition, the federal government is launching three new benefits designed to target specific reasons Canadians may be unemployed or need financial assistance. These will also come into effect on September 27. These benefits are also taxable, which means that tax will be deducted from the payments.

The trio are expected to cost $ 22 billion.

The first is called the “Canada Recovery Benefit” and will be available for 26 weeks to self-employed workers, workers on demand or on contract, or who are not eligible for EI but still cannot return to work.

To be eligible for this $ 400 per week program, Canadians must be looking for work and have stopped working or have their income reduced due to COVID-19. Workers will be required to repay $ 0.50 of every dollar earned above an annual net income of $ 38,000 on their tax return.

A new “Canadian Recovery Sick Benefit” is being created for those who do not yet have paid sick leave through their employer, to make it easier for people to stay home from work when they are sick or need to self-isolate due to COVID. -19, regardless of their income.

This benefit will provide $ 500 per week, for up to two weeks, which remains the current amount of time required for coronavirus isolation. It cannot be claimed if the employee has paid sick leave at his place of work.

The federal government has previously spoken of ongoing discussions with provinces and territories to ensure that every worker in Canada who needs it can access 10 days of paid sick leave per year, a greater concern than ever to reduce the spread of the virus by making it possible for anyone who is not feeling well to stay at home.

And the third new program is a “Canada Caregiver Benefit” which provides assistance in cases where a person has to stay home to care for a loved one such as a child under the age of 12. or a dependent due to schools, daycares or other child care services. the facilities are closed due to the pandemic.

This program offers up to 26 weeks per household, with only one adult per household able to claim the program at a time, and provides $ 500 per week. It can only be used when the facilities are closed and not because people “prefer” to keep their loved ones at home.

PROMISED SOFT TRANSITION

At the end of July, the government announced for the first time that this change was coming, announcing that after months of work, the newly strengthened EI system was ready to process thousands of more claims than before the pandemic. Officials said the estimated cost of $ 7 billion would be the cost associated with the changes to EI, not including the payments that will be made.

Qualtrough has pledged that when the CERB cycle expires in September, the transfer of up to four million Canadians who still need EI support will be without disruption in their payments.

In mid-September, a new webpage will be launched, making it easier to access these new perks when their app windows open.

As of March 15, CERB has paid out $ 69.37 billion in benefits to 8.61 million unique applicants, and so far 4.1 million applicants have returned to work. The extension of CERB for another month is expected to add an additional $ 8 billion to the total cost of the program.

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