07/08/2020 22:47 EDT | Updated 07/09/2020 19:16 EDT

CERB Is Coming To An End As Feds Focus On Wage Subsidy

The $2,000-a-month program will be phased out as the government puts more attention on businesses

Chris Helgren / Reuters
Part of a cheque for the $2,000 Canada Emergency Response Benefit (CERB), a taxable award from the Canadian government made every 4 weeks for eligible workers who have lost their income due to the COVID-19 pandemic.

OTTAWA — The Canada Emergency Response Benefit (CERB) is coming to an end. 

Finance Minister Bill Morneau announced Wednesday that the government is looking to move to an economic recovery phase and will shift its focus from individuals to helping businesses. One way of doing that, he said, is by removing “disincentives” that may dissuade people from returning to work.

“We recognize that the best way to help to create jobs, to maintain jobs, is to provide the wage subsidy to businesses so they can get back to work,” Morneau told reporters in Ottawa. 

The federal government revealed its much-anticipated economic update pinning the current deficit to $343.2 billion — a figure 1,000 per cent higher than what was projected last fall before the COVID-19 pandemic ground the economy to a halt.

Watch: Morneau says massive federal debt for COVID-19 manageable. Story continues below video.


“It’s not easy,” Morneau said about coming up with plans to raise Canadians’ confidence in a time of public health and economic uncertainty. “We’re in challenging times.” 

The fiscal update states the CERB is a program the government has extended to “a total of 24 weeks.” 

A spokesperson for Morneau’s office said the pandemic is a dynamic situation and programs are under continual evaluation. 

“We know many Canadians will still need income support,” wrote Maéva Proteau in an email Thursday. 

As for the future of the CERB, the finance minister’s office refused to say whether the program would be extended beyond September or how it will look in the fall.

“Our government is continuing to assess how best, in the future, to support those affected by COVID-19, and is evaluating a number of potential options that include but are not limited to CERB and the EI system. No decisions have been taken as yet.”

There are seven eligibility periods for the CERB. Each eligibility period lasts four weeks. The program is administered by the Canada Revenue Agency. Eligible recipients receive payments for a maximum of six periods, or 24 weeks total.

CERB proved popular during initial pandemic wave

The CERB was originally intended as a 16-week program to deliver direct emergency benefits to Canadians who stopped working or had their hours reduced due to the COVID-19 pandemic.

The program has been popular with more than 8.16 million unique applications submitted by the end of June. More than $53.53 billion in taxable benefits have been paid out to Canadians.

Last month, Prime Minister Justin Trudeau announced the benefit program would be extended by eight weeks as efforts continue in getting businesses to sign up for the Canada Emergency Wage Subsidy (CEWS) and rehire workers. 

But uptake had been slow on the CEWS, a federal program designed to help businesses cover 75 per cent of employee wages from March to August.

The CEWS, in comparison to the CERB, has supported three million Canadians so far, according to Wednesday’s fiscal update.

Carlos Osorio / Reuters
People participate in an outdoor yoga class by LMNTS Outdoor Studio, in a dome to facilitate social distancing and proper protocols to prevent the spread of COVID-19 in Toronto on June 21, 2020.

With the CERB winding down in September, the government is hoping more people to move to the employment insurance system for support. 

Conservatives have long said the $2,000 monthly CERB payments may deter some people from returning to work as the COVID-19 crisis continues.

Outgoing Conservative Leader Andrew Scheer repeated that assertion to reporters, saying the government should introduce a work bonus for CERB recipients.

He described it as “a CERB top-up that would give workers the support they need to transition back into the workforce and ensure that local businesses are able to fill shifts and get back on their feet.”

As the finance minister confirmed the final curtain call for the CERB, the 168-page fiscal update provides little detail on how the government plans to handle historic levels of debt, not seen since the Second World War. 

The document makes multiple references for how the government is set to save $4 billion in public debt charges because, according to the update, record low interest rates have made carrying unprecedented levels of debt “more affordable.”

New policies are usually announced in traditional spring budgets and fall economic statements. In lieu of a suite of new policy announcements, Wednesday’s update offered some unexpected additional statistics to give a sense of how the pandemic has impacted Canadians.

NurPhoto via Getty Images
Restaurants, bars and other food and drink establishments are open for dining in outdoor areas, like patios, curbside, parking lots and adjacent properties in the places of Ontario cleared to enter Phase 2 of reopening amid the COVID-19 pandemic in Hamilton, Ont. on July 7, 2020. 

Survey results suggest 60 per cent of Indigenous respondents reported their mental health to be somewhat worse or much worse since the start of widespread physical-distancing measures. 

The figure is higher than the 52 per cent reported by non-Indigenous participants.

Consumer habits may have also changed since March. 

According to government polling, 59 per cent of Canadians are watching more television and 69 per cent are spending more time on the internet. 

People are also reaching for more unhealthy foods, with 35 per cent of those surveyed saying their junk food eating has gone up since the start of the pandemic.

The government acknowledged that racialized people may be facing the COVID-19 crisis differently than those who identify as white.  

“We recognize that racialized people, including Black Canadians, are more likely to work frontline jobs, have lower incomes, have health disparities, and experience systemic discrimination, which compound economic hardships related to the pandemic,” the fiscal update states

It offered, however, no new specific measures to address these disproportionate impacts.