More details have emerged about the Canada Emergency Response Benefit (CERB) announced last week by the federal government, and it has become clear that many Canadians who need support will not be included in the flagship income support program. 

The Benefit was touted last week as a direct benefit of $2,000 per month to help all those who had lost their income due to the COVID-19 crisis, a substantial improvement on the two separate benefits the government had initially announced. Unfortunately, the text of the legislation confirms that many Canadians who need relief will not benefit from the program. 

These exclusions stem from the CERB’s eligibility criteria which extends support only to those who meet each of the following requirements:

  1. Had a total income of at least $5,000 in 2019 or the 12-month period preceding their application date; 
  2. Stop working for 14 consecutive days within the four-week period for which they apply for the CERB (it appears that applications must be renewed every four weeks) for reasons related to COVID-19; 
  3. Do not receive any income whatsoever during those 14 days; and, 
  4. Did not stop working voluntarily.

These criteria have a number of problematic implications. 

Freelance or self-employed workers whose income has been dramatically reduced, but not wiped out altogether, will not qualify for the CERB. For example, a freelancer writer who normally earns $3,000 per month but is now earning only $300 per month would be excluded by requirement #3 above.

Similarly, “gig economy” workers may also be excluded from support altogether. Rideshare drivers, food delivery couriers and other gig workers may see their earnings drastically reduced but not eliminated. In this case, they would also be excluded by the third requirement. 

If these workers chose to stop working, they could be excluded by requirement four. It’s possible they could reasonably claim to have stopped working for health and safety reasons related to COVID-19, but this has not been made clear. 

Students and recent graduates will be excluded from the CERB, unless they earned $5,000 in employment income in the past 12 months. Many of them will have not reached that earnings threshold. More than 543,000 people graduated from post-secondary institutions in 2017 (the most recent year for which I could find Statistics Canada data). A new cohort of post-secondary students is scheduled to graduate this spring. Those entering the job market for the first time are now likely out of luck. Not only will they be unable to access income support due to the first requirement, they are also likely going to be shut out of work for at least the next few months as businesses freeze hiring. There is no justification for excluding these people, who are often in an extremely precarious position in normal circumstances, from financial relief right now. 

Of course, all of these rules around eligibility make it unclear who is eligible for what. For example, if an Uber driver takes 14 days off work in April and returns to driving the day after, do they receive any benefits? If so, how much? Is that absence from work considered to be related to COVID-19? If not, why? These basic questions have yet to be clearly and definitively answered.

At the same time, Prime Minister Justin Trudeau has hinted darkly at “serious consequences” for those who “abuse” the system of relief programs the government is creating. But one has to imagine that with this many ambiguities and grey areas, many people who legitimately need the benefit will decide it’s not worth applying and risking whatever those consequences turn out to be. 

All of this confusion could have been avoided with a universal cash benefit, the (significant) additional cost of which could have been offset by next year’s income tax.

If the government refuses to pursue this concept, they should at least eliminate the criteria that excludes those who earned less than $5,000 in the past 12 months, and expand eligibility to include an income top-up for self-employed and gig workers whose earnings have been significantly reduced but not eliminated altogether.

Trying to survive during a global pandemic is hard enough. Rather than setting up complex means-tests that exclude people who legitimately need help, the government should be making it as simple as possible for everyone to keep their head above water.

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