Ottawa extends CERB and adds 3 new COVID-19 benefits

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Ottawa extends CERB and adds 3 new COVID-19 benefits

Last updated September 22, 2020. We will update blog posts when more information is released.

The federal government has extended the Canada Emergency Response Benefit (CERB) from 24 to 28 weeks.

This is good news for Canadians who were worried about running out of their CERB payments on August 29. They will now be able to access an additional month of support, until September 26.

The government reports that as of early August, 8.5 million individuals have received CERB, and 4 million Canadians are still receiving the emergency benefit.

To support Canadians who are transitioning from CERB and still need help, they’ve announced temporary changes to the Employment Insurance (EI) program and introduced three new benefits.

“As we safely restart our economy, many of those Canadians will still need support while they continue to look for work,” said Employment and Social Development Canada in a statement. “That is why the government will transition people who have been receiving the CERB to a more flexible and generous EI program for those who qualify, which will provide them additional features and tools to get back into the workforce.”

We provide a summary of the changes and new programs below.

Changes to Employment Insurance

The government has adjusted the number of hours needed to qualify for EI, since many Canadians haven’t been able to work due to the pandemic.

Canadians will now need just 120 hours of eligible employment to qualify for EI.

Effective September 27, those eligible for EI will receive a taxable benefit rate of at least $400 per week, or $240 per week for extended parental benefits, and regular benefits will be accessible for at least 26 weeks.

Most Canadians who received CERB through Service Canada will be transitioned to EI, while those receiving CERB through the CRA will have to file a new EI application.

To reduce the financial burden of the changes on employees and employers, they will freeze the EI insurance premium rates for two years.

The EI premium rate for employees will stay at the 2020 level of $1.58 per $100 of insurable earnings for two years, and the rate for employers will stay at $2.21 per $100 of insurable earnings.

They’re also implementing temporary measures to support self-employed fish harvesters who rely on EI fishing benefits in the off-season.

These measures will allow EI fishing benefits for these workers to be calculated using either fishing earnings for their current claim, or fishing earnings from the previous year’s claim in the same season, whichever is higher.

New benefits for Canadians

The government announced three new benefits for Canadians who won’t qualify for EI. All the new benefits are taxable and will be administrated by the Canada Revenue Agency (CRA).

Most of the EI changes and the new benefits will kick off on September 27, and will be in effect for one year.

NOTE: The following benefits are pending the passage of legislation in the House of Commons and Senate. More details will be made available soon.

Canada Recovery Benefit

The Canada Recovery Benefit is for self-employed workers and other workers not eligible for EI. Workers would receive $400 per week for up to 26 weeks.

Recipients will need to apply after every two-week period and attest they continue to meet the requirements. They will be obligated to look for and accept work.

Who qualifies for the Canada Recovery Benefit?

This benefit would be available to residents in Canada who:

  • Are at least 15 years old and have a valid Social Insurance Number (SIN)

  • Have stopped working due to the COVID-19 pandemic and are available and looking for work

  • Or are working and have had a reduction in their employment/self-employment income for reasons related to COVID-19

  • Had employment and/or self-employment income of at least $5,000 in 2019 or in 2020

  • Have not quit their job voluntarily

If their annual net income, excluding the Canada Recovery Benefit payment, is over $38,000, claimants will need to repay some or all of the benefit through their income tax return.

Beyond that threshold, they would need to repay $0.50 of the benefit for each dollar of their annual net income above $38,000 in the calendar year to a maximum of the amount of benefit they received.

Canada Recovery Sickness Benefit

The government will provide $500 per week for up to two weeks, for workers who are sick or must self-isolate due to COVID-19.

Who qualifies for the Canada Recovery Sickness Benefit?

This benefit would be available to:

  • Residents in Canada who are at least 15 years of age and have a valid Social Insurance Number (SIN)
  • Workers employed or self-employed at the time of the application
  • And workers who earned at least $5,000 in 2019 or in 2020

Canada Recovery Caregiver Benefit

The Canada Recovery Caregiver Benefit will provide $500 per week, for up to 26 weeks per household to eligible Canadians.

Who qualifies for the Canada Recovery Caregiver Benefit?

In order to be eligible for the Canada Recovery Caregiving Benefit, individuals would need to:

  • Reside in Canada

  • Be at least 15 years of age on the first day of the period for which they apply for the benefit

  • Have a valid Social Insurance Number

  • Be employed or self-employed on the day immediately preceding the period for which the application is made

  • Have earned at least $5,000 in 2019 or in 2020

  • Have been unable to work for at least 60% of their normally scheduled work within a given week because of one of the following conditions:

    • They must take care of a child who is under 12 years of age on the first day of the period for which the benefit is claimed:

      • Because their school or daycare is closed or operates under an alternative schedule for reasons related to the COVID-19 pandemic;

      • Who cannot attend school or daycare under the advice of a medical professional due to being at high risk if they contract COVID-19; or

      • Because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic; or

    • Or they must provide care to a family member with a disability or a dependent:

      • Because their day program or care facility is closed or operates under an alternative schedule for reasons related to COVID-19;

      • Who cannot attend their day program or care facility under the advice of a medical professional due to being at high risk if they contract COVID-19; or

      • Because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic;

  • Not be in receipt of paid leave from an employer in respect of the same week; and

  • Not be in receipt of the CERB, the EI Emergency Response Benefit (ERB), the Canada Recovery Benefit, the Canada Recovery Sickness Benefit, short-term disability benefits, workers’ compensation benefits, or any EI benefits in respect of the same week.

Contact FBC

If you’d like to learn more about this or other COVID-19 programs for Canadian businesses, please call us at 1-800-265-1002 or email [email protected] Unlimited consultation related to tax matters is a key benefit of FBC Membership. You can also book an appointment.

Visit our COVID-19 Resource Centre for the latest information, advice and insights for small business owners.


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