CRB, wage, rent subsidies replaced with reduced benefits

Benefits will be delayed until Parliament meets in late November

The federal government is scaling down a number of COVID-19 financial programs that were set to expire last week, including the Canada Recovery Benefit (CRB). The programs will be replaced with reduced benefits, although due to parliamentary delays, these benefits may not be accessible until late November.

On Thursday, finance minister Chrystia Freeland announced that benefits such as the CRB, the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) would be allowed to expire Oct. 23 and be replaced with a new series of pandemic supports totalling $7.4 billion.

Freeland said although the economy is recovering and “we are winning the fight against COVID,” she acknowledged recovery has been “uneven.”

“That is why today we are announcing what we very much hope and believe is the final pivot in delivering the support needed to ensure a robust recovery,” she announced at a joint press conference with Prime Minister Justin Trudeau.

The CRB will be replaced by the Canada Worker Lockdown Benefit (CWLB), which will provide $300 a week to workers confronting local lockdowns from Oct. 24 until May 7, reduced from $540 to $900 every two weeks for CRB.

Those who lose income due to their refusal to get vaccinated will not be eligible.

NDP MP Leah Gazan of Winnipeg Centre thinks CWLB is not a sufficient replacement for CRB.

“People across Canada have been doing their part, they need help,” she explained.

“Businesses need help. Now is not the time to pull the plug.”

Gazan is an advocate of guaranteed basic income, arguing “there is no reason why anybody in Canada should be living in poverty.”

“This current government bailed out corporations and they’re pulling the plug on people and families,” she said.

Bea Bruske, president of the Canadian Labour Congress (CLC), said the lockdown provisions make workers “dependent on provincial governments, many of whom imposed lockdowns belatedly during past waves of the pandemic.”

The 2021 BDO affordability index found 43 per cent of Canadians were driven further into debt by COVID-19, with 70 per cent saying it had made their standard of living worse and only 51 per cent saying they will be capable of restoring their pre-pandemic standard of living. The same study found that 76 per cent of those still receiving government benefits described them as “very important” or “essential.”

The Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) will be replaced with the Tourism and Hospitality Recovery Program, which will provide wage and rent subsidies for hotels, and the Hardest-Hit Business Recovery Program, which will provide wage and rent subsidies of up to 50 per cent to businesses that have faced deep revenue losses.

The government will also extend the Canada Recovery Hiring Program until Nov. 20, with an increased subsidy rate of 50 per cent, and plans to extend it further into May.

Bruske said supports should be focused more on individuals.

“If employers get supports and individuals don’t, we have an uneven playing field and workers will be left more vulnerable,” Bruske argued.

“‘Building back better’ out of this pandemic should not include extending supports for business while cutting them off for workers.”

Two other supports for individuals — the Canada Recovery Caregiver Benefit (CRCB) and the Canada Recovery Sickness Benefit (CRSB) — were extended until Nov. 20 with the intent to continue them through to early May.

“Absolutely cutthroat and ruthless” parliamentary delay

New benefits have been proposed, but the government has not drafted legislation to enact the new benefits and Parliament will not be in session until Nov. 22. Although workers will eventually be able to submit retroactive claims under the CWLB, in the meantime they face a month-long gap between payments, right before the holiday season.

While the caregiver and sickness benefits have been extended until Nov. 20, recipients will still face a gap in benefits as they wait for parliament to debate, pass and enact new legislation following their expiration.

Gazan called this move “absolutely cutthroat and ruthless.”

“People are already struggling, we know mental health is at an all-time low [and] people are feeling financially stretched more than ever before,” she said. “I think the fact that this government has chosen to do this during the fourth wave of a pandemic where businesses and families and individuals continue to suffer is abhorrent.”

This is not the first time the Liberals have waited until the last minute to extend or reform pandemic benefits. Last year, CRB did not receive royal assent until halfway through the first two-week claim period, creating confusion.

Debate over benefits’ effect on labour market

Some, such as the Canadian Federation of Independent Business, have argued benefits like CRB have contributed to a shortage of part-time workers, arguing they earn more on such programs than they would if they were working.

Employment minister Carla Qualtrough has also said that benefits would be shifted to “incentivize work.”

Bruske said such a narrative clashes with the facts.

“The employers most vocal about a supposed labour shortage tend to be those in low-wage sectors where wage growth has been comparatively slow,” she explained.

“As we recently saw in the United States, prematurely cutting off pandemic unemployment benefits is unlikely to have much of an effect on labour supply in low-wage sectors of the economy such as retail, food and accommodation.”

She argued these industries are offering lower hours, and many workers are still caring for children or elders through the pandemic. Pandemic financial supports also gave some workers the time and resources to seek higher paying jobs.

Gazan also disputed the narrative that CRB was causing labour shortages and argued that “people shouldn’t bear the brunt of this pandemic.”

“We have been very clear that these programs need to be kept in place,” she said.

“People shouldn’t be paying for the pandemic — it should be corporations like Amazon.”