CERB is a far cry from EI– EI is a Rx for Poverty

Within days of Donald Trump announcing a possible end to the $600 weekly Covid-pay to over 30 million Americans, Justin Trudeau declared the Canada Emergency Response Benefit (CERB) payment was ending.

At the end of August, the $2,000 a month CERB will be replaced by Employment Insurance (EI).  On the face of it, that looks okay, as the Minister of Employment Carla Qualtrough said, “We believe CERB has served its purpose.”  But here is why CERB is still needed.

The Interior News (BC); from South Slocan’s Wee Ones Preschool Daycare

CERB: the start of a guaranteed income…

At $2,000 a month, CERB, kept hundreds of thousands– if not millions —  of Canadians and their children from begging on the streets.  A family with two working parents, now thrown out of work, received $4,000 a month.  There was no means test, and no qualifying period.  The application was easy.  There was a very short waiting time.  No questions were asked.  The idea was to give most Canadians the chance to live like human beings during the Covid crisis and attendant shut-down.  Indeed many Canadians earned more on CERB than they would have received if they had been working. 

In Nova Scotia, the average family income is $60,000 per year.  Because men generally earn more than women, one could assume if a family consisted of two earners (often a man and a woman), that the man could earn $40,000, and the woman $20,000 annually.  If CERB were available for a year, each unemployed partner would receive $24,000.  For a woman, that could amount to $4,000 more that she would earn “normally.” 

Now if those same people must collect EI, aside from the stigma of drawing the benefit, there is the problem of having to live below the poverty line.  The EI benefit is only 55% of regular earnings. Don’t forget EI rarely lasts six or nine months, let alone a year.

Using the example above, if a woman earned $20,000 in the last year (before Covid), she would be entitled to only $11,000 on EI.  That is about half of what she received on CERB. And don’t forget CERB payments do not have income tax deducted from them.  Instead, Canadians with higher taxable incomes will have to pay taxes on CERB income in the next tax year.

EI “benefits are low and barriers [to access them] are high.” 

– Donna E Wood, former researcher at Atkinson Foundation

From the last decade at least, eligibility for EI has been cut to the point that fewer than 40% of unemployed Canadians even qualify for EI benefits.  As Donna E Wood, a researcher for the Atkinson Foundation wrote, EI “benefits are low and barriers [to access them] are high.”  Her groundbreaking 2019 report, Employment Insurance: Next Steps on the Road to Renewal points out that EI is a very important benefit.  For example, were it not for EI benefits, the number of Canadian families living in poverty (below the low income cut off) would have doubled from 7% to 14%, from 2000 to 2007.

EI, a Prescription for Poverty

The Prime Minister says the “new” EI will allow the jobless training and education, and pay them benefits.  But what training is Trudeau talking about? And who will pay for a worker’s childcare, after school or elder care when he or she is in a training program up to eight hours a day – and collecting a pittance of a benefit.  Right now more than 8.4 million Canadians are collecting CERB.  When it ends, it is likely not half and not even a quarter of the unemployed will have jobs to go to. 

As researchers Armine Yalnizyan and Laurell Ritchie insist,

“The fully 61 per cent of workers who can’t work from home may have workplaces that are not able to provide physical distancing or lack personal protective equipment or ways to sanitize. Workers may want to work but lack child care.”

Cancelling CERB will be a disaster, as we are far from beyond Covid’s economic blow to the economy.  Forcing millions of workers to go on EI will mean Canadians will not be able to pay their rent and feed their families. 

Featured Painting: Interior by Molly Lamb Bobak, 1920-2014, Fredericton, NB.

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