What’s at stake in the move from CERB to EI?

This analysis has been updated following federal legislative changes. Read the update here.

Please note we are unable to assist individual CERB/EI recipients with their claims. We encourage you to contact your Member of Parliament’s office for assistance with your file. To find your Member of Parliament and their contact information, visit the Parliament of Canada website and type in your postal code. We are working to compile a list of resources for CERB/EI recipients affected by the switchover but encourage you to contact your MP’s office in the meantime as they are able to assist with claims.

Fast Facts

  • As of August 2, 4.7 million Canadians were receiving the CERB.
  • Based on the July Labour Force Survey (LFS), 1.4 million CERB recipients are eligible for EI under existing EI rules. Of that group:
    • 811,000 would receive EI but would get less than $500 a week;
    • on average, those making less on EI would receive only $312/week; and
    • 493,000 women and 320,000 men would be worse off on EI compared to the CERB.
  • Also based on the LFS, 2.1 million CERB recipients are not eligible for EI under existing EI rules. Upcoming EI rule changes will determine how many of those 2.1 million CERB recipients will be left behind in the switchover to EI.
  • 57% of CERB recipients at risk of being ineligible for EI are women.
  • Without changes, 82% of people receiving the CERB (2.9 million) will be worse off on EI, either receiving less or nothing at all.

The federal government recently announced it would be transitioning Canada Emergency Response Benefit (CERB) recipients back to employment insurance (EI) in September. The final CERB period ends August 29. The prime minister committed that “no one will be left behind” in the switchover to EI.

As outlined in the Alternative Federal Budget COVID-19 Recovery Plan, it’s time for the CERB to end, but it’s also time for the best aspects of the program to be imported into a modernized EI system for the 2020s, not the 1970s. The danger in this transition is that if it’s done wrong, millions of people will indeed be “left behind.” The following analysis shows exactly how high the stakes are in this transition.

First of all, it’s important to estimate how many people are likely to go through the CERB-to-EI switch. Government statistics only count the unique number of people who received the CERB over the life of the program (8.5 million). But this isn’t terribly useful, as people may have only received the CERB a month in April but then gone back to their jobs in the summer. We need to know how many people renewed their CERB payments recently to know how many will likely roll over to EI in September.

My best estimate is that at the start of August there were 4.7 million people receiving the CERB (you can see how I arrived at that number in the methodology section below). That figure will hopefully fall by the end of August as we see the job market recover a bit more. By the end of July almost all CERB recipients were renewing pre-existing claims instead of making first-time applications.

However, 4.7 million people is a lot of people—about 10 times more than what the EI system supported in February 2020 (443,000 people) before COVID-19 substantially hit Canada.

The LFS isn’t a perfect match to the CERB data, for instance the CERB data suggests 4.7 mil recipients on Aug 2nd whereas the LFS data suggest 3.5 mil CERB eligible workers in mid-July. However, while the LFS can identify fewer of the CERB eligible workers, it can be used to get a better sense of the size of various groups at risk of losing benefits if we don’t get the transition from CERB to EI right (see methodology section). Since we don’t know the extent of the EI rule changes being considered by the federal government, the analysis below assumes that no changes are made in order to clarify what is at stake.  The analysis below relies exclusively on the LFS data.

First of all, 41% of people receiving the CERB (1.4 million people) would be eligible for EI without any rule changes, which roughly reflects the proportion of the unemployed that EI generally covered before COVID-19. The biggest issue for CERB recipients who are already EI-eligible is that they’ll move from the CERB’s flat $500/week to EI’s 55% of previous earnings.

For most of the people rolling to EI, they’ll actually receive much less in EI benefits than they got from the CERB. On average, the 811,000 people whose EI payment will be less than $500 a week will make only $312 a week. In other words, over three quarters of a million people will see their support drop by an average of almost $200 a week. For another 625,000 people, they’ll make more on EI than the CERB as they were higher earners (since March 15, any application for regular EI benefits was turned into a CERB application).

Without EI rule changes, 2.1 million CERB recipients would be completely cut off when the program ends. The largest group who wouldn’t be eligible are those who are still working. There are 972,000 people who make less than $1,000 a month and therefore can receive CERB but wouldn’t be able to receive EI, as you have to be completely unemployed with no wage income to get EI (except in some work-sharing situations and if working while on claim). An expanded working-while-on-claim program might be one avenue that could allow people to earn some money while on EI.

Next, there are 553,000 people who are technically employed but have no hours. This group isn’t on layoff, they aren’t on vacation and they aren’t on any other sort of leave; their only unique feature is that they usually have hours and in July they had none. It is unlikely that these workers received a layoff record of employment (ROE). Without a ROE they can’t apply for EI, although they could have received the CERB. This is perhaps the group most likely to be “left behind” as they may believe that they’ll receive EI but don’t realize they’ll have to go back to their employer, ask to be officially laid off, get a ROE proving it, then go back and apply for EI. Changing EI from a ROE to an attestation basis would help with this transition, but there seems to be little indication that this move is in the works.

Unlike the CERB, EI never covered gig or self-employed workers who lost their employment, of which there were 391,000 in the mid-July LFS data. The government is suggesting these workers will be covered under new EI rules, or perhaps be granted some sort of transitional benefit like the one for seasonal fishers.

There are 156,000 people who made $5,000 in the past year before becoming unemployed due to COVID-19. These people could get the CERB, but there are many who didn’t have the number of hours required in their EI region to be eligible for EI—generally workers with higher hourly wages who made the income threshold of the CERB but not the hours threshold of EI. Without a reduction in the hours required to get EI (to roughly 300) these folks will be left behind.

Finally, there are 18,000 people who were forced to quit due to a lack of child care during the pandemic. This figure seems low and is based on a multiple-choice list in the LFS that includes other reasons, several of which might apply. The actual figure is likely much larger than this. CERB allowed people to stop working to look after children, but EI does not. There are indications that EI rules may be changed to accommodate these additional situations of family caregiving, including children at home due to the current uncertainty about child care and schools.

 

The fate of CERB recipients

CountCountCount
People on CERB in mid-July3,526,000Will roll to EI1,437,000Get EI worth <$500/week811,000
Get EI worth >=$500/week626,000
Won't roll to EI without rule changes2,089,000No EI: Working making under $1000 a month972,000
No EI: Self-employed/Gig workers391,000
No EI: Not enough hours for EI156,000
No EI: Parents forced to cut hours/quit as kids not in school/child care18,000

Note: Assumes no EI rule changes (see methodology below for more details). Data is from the July LFS and will have changed by the end of August when the switchover happens.

There is an uneven distribution among people who will receive less on EI than they did on the CERB. In general, women fare worse. Of the women who are receiving the CERB but are already eligible for EI, 62% will see a drop in income support, but only half of men will receive less on EI. Of the 811,000 CERB recipients who will be worse off on EI, 492,000 of them are women and 299,000 of them are men.

Among those at risk of not being eligible for EI at all, 57% are women and 43% are men. In other words, 1.2 million women are at risk of receiving nothing after the switchover compared to 908,000 men.

In conclusion, the stakes are high in the switchover from the CERB to EI, which comes at a time when it is clear the pandemic and its related economic impacts are far from over. Without modifications, 82% of people receiving the CERB, 2.9 million Canadians, will be worse, receiving less from EI or nothing at all. The following EI rule changes taken from the AFB Recovery Plan EI chapter can substantially reduce that number:

  • Create a floor on benefits of $500 a week or increase the replacement rate to 75% of income for those who are EI-eligible but didn’t make much before being laid off.
  • EI should move to an attestation basis for the first payment, which will help those who might not have their official layoff paperwork in order.
  • EI qualifying hours should be reduced to a universal 300 over the prior year.
  • EI should be altered to cover gig and self-employed workers.

Without these changes, many unemployed Canadians, particularly women, are at risk of even less support and lower incomes in the worst job market since the Great Depression.

Methodology

CERB recipients

Data on the total number of people receiving the CERB on a given date isn’t available. On a semi-regular but ad hoc basis, the government updates these three variables from the ESDC CERB site: total unique applicants, total applications processed, and total dollar value of CERB benefits paid. The CERB could be accessed through either ESDC’s EI portal and renewed for $1,000 every two weeks, or through the Canada Revenue Agency’s portal and renewed for $2,000 every four weeks.

From these three variables it is possible to calculate four additional variables in any period: new CRA applications, new ESDC applications, ESDC renewals (through the EI portal), and CRA renewals. The calculations are based on the following three formulas:

  • c=n*2000+r*2000+i*2000+l*1000,
  • a=n+r+i,
  • u=n+i

Where:

c = total dollar value of CERB benefits paid
a = total applications processed
u = total unique applicants
n = new applications through CRA
r = renewals through CRA
i  = new applications through ESDC
l = renewals through ESDC

This equation set yields unique solutions for r and l. A third unique solution is possible for n + i, meaning we can’t reliably disaggregate new applications to CRA from new applications to ESDC. Using privately obtained information for the period covering March 15 to May 28, 47% of new CERB applications were through ESDC and 53% through CRA, and for this analysis that constant ratio is used in all periods. Over each period n, i, r and l are calculated and the total number of people receiving CERB is the sum of anyone who applied through ESDC (either new or renewal) over the past two weeks or applied through CRA (either new or renewal) in the past four weeks. The data above is as of August 2. Additional details are available from the author.

CERB and EI eligibility

There is not a standard dataset to examine exactly who is eligible for the CERB or EI. These variables must be calculated using other available variables in the LFS PUMF from July 2020. Those who are eligible for these programs based on LFS variables may not actually be receiving benefits, either because there are other reasons that disqualify them or because they didn’t apply. As such, comparing EI and the CERB can only be done on an eligibility basis.

For those presently employed, usual hours and hourly wages are available. In conjunction with job tenure these variables determine if one has enough hours to qualify for EI, if one has made $5,000 in their present job, their usual weekly earnings (as the basis for the EI benefits), and so on. However, for those unemployed or out of the labour force, usual hours and hourly wages are not known. What is known are part-time or full-time job status from a previous job, tenure of the previous job, and occupation. A person’s missing wages and usual hours worked are imputed based on the average of someone with the same full-time/part-time status working at the same occupation in February 2020.

EI eligibility uses a three month rolling average to determine the hours one had to have worked in the previous year to qualify.  This is calculated across the 64 EI regions.  The LFS PUMF only contains eight of those EI regions as census metropolitan areas (CMAs).  It does contain any part of a province not in those CMAs. An average three-month rolling unemployment rate is derived for those “not in a CMA” areas of each province. Otherwise the three-month rolling average in that CMA is used to determine worker eligibility for EI. The appropriate month when someone became unemployed is used to set the EI hours eligibility threshold, meaning it will be harder for someone to get EI in March when the three-month unemployment average was still very low compared to July when it would have adjusted downward.

The actual amount of time a worker has been continuously working is not known in the LFS; all that is known is how long they’ve been in their present job and that is what is used to determine CERB and EI eligibility. However, this assumption will likely underestimate the number of people actually eligible for either program as workers often move from one job to another without interruption, meaning the tenure at the present job underestimates the duration of continuous work.


David Macdonald is a senior economist with the Canadian Centre for Policy Alternatives. Follow him on Twitter at @DavidMacCdn


Please note we are unable to assist individual CERB/EI recipients with their claims. We encourage you to contact your Member of Parliament’s office for assistance with your file. To find your Member of Parliament and their contact information, visit the Parliament of Canada website and type in your postal code. We are working to compile a list of resources for CERB/EI recipients affected by the switchover but encourage you to contact your MP’s office in the meantime as they are able to assist with claims.

43 comments

    1. What about Seasonal workers who were suppose to return to work in May,have exhausted their EI and their usual seasonal jobs was eliminated due to Covid 19 for 2020? How do we qualify?

  1. In beginning I was receiving 3,000 for almost 3 months and then suddenly I start getting 2,000, so I call EI and ask for the reason why I am getting 2,000 instead 3,000 she said we give you 3,000 in beginning because we think you guys needs money so what? Now we need more then before as we don’t have a job get laid off, and didn’t receive EI this month which is quite stressful and disappointed because I have to pay mortgage, tax and insurances and grocery for family kids, it’s also very lousy decision of Govt to stop EI even not return to job yet. If they want to take back money you can do it at the end when we got back to job. We are not running out from Toronto , just feel very disrespectful and surprised by Govt behavior that how money is most valuable then us. What kind of human rights is this?

    1. I had to use up my EI first before going on the cerb. Now I have no EI left for when I needed it because they would not give me cerb first! What will I do when cerb ends????? My job may be affected when school reopens because higher grade students will only be at school every other day. I may not be needed!!!

  2. So people in my situation with the CERB Runs out and I’m not back to work and I don’t have any hours to collect EI do we just get kicked to the curb? Nobody can seem to answer this question?

    1. Hi Brian,

      We are working to compile resources to help workers in situations like yours but in the meantime, we strongly suggest getting in touch with your Member of Parliament’s office as they can help you navigate your EI claim. You can find your MP by entering your postal code on the Parliament website: https://www.ourcommons.ca/Members/en/search

      1. Hi

        I am in the same boat as you. My Ei ran out in March and I was on CERB but I am unsure what will happen. The government promised not to leave anyone, let us hope for the very best.

    2. I am on sick EI but im worried will be running out, its strictly related to health conditions that have me present with covid symptoms regularly although not covid positive. wonder what will happen to my family…2 kids, hubby a full time student and i cant work 🙁

  3. CERB ending is scary for a lot of us. I work in the cruise industry, there will be no way I will qualify for EI. Trudeau saying that no one will be left behind, I’m sorry, but that is total b.s. There isn’t a date when I, and a lot of people will be returning to work. This is a stressful time for many.

    1. It’s sad that’s this Government saw it fit to give away 25M dollars of my beard earn tax dollar, yet my 31 years old brother won’t be able to pay his rent after CRRB is finished…. tell me Mr The Prime Minister when will the Cruise industry will be fully operational again….. or how is my brother going to
      Take care of his wife and my nephew…!?

    2. I am quite concerned as well. I’m a single woman who worked a minimum wage retail job. So far there is no idea that I’ll get my job back, as they are just doing curb side drop offs if you put a piece of clothing on hold via Instagram. Anyways, I know nothing about EI . Just nervous I’ll be on the streets after next month.

    3. As a server & bartender, don’t forget we make less than minimum wage. Minimum is $14.00/hr, we get $12.20.

      In addition, our hours in the weeks before our March 15th shutdown were depleting fast, and these are the weeks that will help calculate my EI.

      My EI is calculated to be $49/week! $200/month! You give me CERB, then throw me to the wolves called EI??

      I give it a few months, and this pandemic will put us back into a shutdown again, then we’re back to CERB? In the meantime, how are liquor servers going to be helped when obviously we can’t live on EI, and by no fault of our own, may be the most difficult industry to return to work without perpetuating the virus.

      1. Many people got left behind on the last CERB. (Elders and anyone on EI before March 15) People are now dealing with school start up, winter, and then Christmas soon. Maybe it’s time for anyone under a certain amount of income to receive UBI.( with prof of looking for employment, or re educating).

        1. I didn’t qualify for cerb when my job ended on March 13 when high schools in Quebec closed… only because I had applied for our March break on March 1 for one week that we were off work… and I didn’t even get paid for it because it was a week waiting period before my benefit started! So I had to exhaust my 17 weeks of Ei before getting the cerb, which I finally got the cerb in July! Now, after getting the cerb for 2 months it’s ending!!! My job might open back up when schools reopen or they might not need me because there will be less students if grades 10 and 11 go every other day!!! What am I to do??? I have no EI left!!! And they are switching people to EI from CERB!!!

      2. Im a artender too and i have 5 kids to care for and our tips is not taken i to account for ri but we live off our tips alot of the time. So this has been a very terrible thing… ill get 79 bucks a week for ei if we go off our cheques and stuff… 5 kids with only 79 a week… ya i dont see this going well.. im a single mom and get no child support or nothing… i wish we could go back to work

      1. I called there cerb benefit line on Monday it approved and said I would receive 2000 by direct deposit in 3 business days since but I have yet to receive this payment and wanted to know why

  4. I was placed in to regular EI when this started because of a previous claim, now my EI’s exhausted and the device I was supposed to be able and TOLD to transfer to, CERB isn’t there, yet the government still has my business employer shut, so how f*d am I?????? Trudeau is talking out his a$% again saying no Canadians left behind…..

  5. How about this…we were given a $ amount of worth in the eye of the pandemic people. We shouldnt accept any less. Just for thought.

    1. We had a system in place — ei and welfare. If the rates aren’t enough to live on, those rates need to be changed. CERB was insane. Therr was no wealth or equity test and you only needed to make $5000 the previous year. You may as well have guaranteed annual income with no equity test.

  6. This stinks leave cerb alone …you will see alot more thefts and crimes ..when people cant pay there Bill’s ect watch out

  7. This government has already left around 1 million Canadians behind with the initial CERB qualifications. I was cut off EI 2 weeks before the deadline to qualify and haven’t been able to find work since then. No one left behind is nothing more than lie!

  8. What about Seasonal workers who were suppose to return to work in May,have exhausted their EI and their usual seasonal jobs was eliminated due to Covid 19 for 2020? How do we qualify?

  9. People are going to become very hostile at the end of August/beginning of September if they can’t afford to pay rent, buy groceries, pay bills and so on. It is going to be the mindset of, ‘I have nothing to lose (no job, etc.)’. People are going to band together – there are millions of people on CERB.
    To think Canadians on CERB are going to suddenly become motivated by CERB ending is ignorant. Majority of the population is traumatized from the pandemic, and experiencing symptoms of PTSD. Most people do not feel safe with how quickly things have reopened. The argument that there is EI, is gaslighting. Most people do not qualify, and EI is not going to be able to support them. In fact, EI will likely provide less than welfare.
    What doesn’t make sense, is that the virus was dangerous at the beginning and people were told to stay inside. People were told that masks would not protect them unless they were N95.
    Now any mask is ~good enough~, and the economy is reopening even when the virus is still spreading at a rapid rate. There is a massive contradiction in how this entire situation has been handled, and either the virus was a hoax, or the government is placing more value on money/their hierarchy than on human lives.
    The end of August is going to bring a lot of destruction if people do not feel safe. If the government wants to continue to politicize this entire situation, so be it. Prepare for a very angry, fight or flight population. Since Liberals are leading this pandemic, they are going to be remembered for their inadequate support for decades to come, and are going to lose the trust of the majority.

  10. Does the Member of Parliment office have enough people to answer all the calls they are going to be getting come the end of August 2020 ?? Will every Canadian be put on HOLD ?? They better check the message so it can be understood and get some better music for us to listen to as its going to be a long wait time.. UBI until this is all over!!! Its going to be a long cold winter and NO Canadian should be left out in it !!

  11. BI is better than EI. I recently co-authored a letter sent to Ottawa endorsed by 75,000+ union workers in the arts sector calling for a Basic Income Guarantee, including IATSE, Musicians Unions, CARFAC, Writers Unions, just to name a few. The arts & entertainment sector is one of the largest industries in Canada, bigger than the auto sector and energy sector and the vast majority of workers are atypical and will not be eligible for EI. Sure, reform EI, but it does not address the more fundamental problems about redistribution and fairness. The movement for a basic income its growing everyday bigger & bigger, because workers understand that reforming a broken EI system is only patching a status quo. We are tired of fighting for the status quo and we are now fighting for a new future.

  12. I applied for EI after March 15 and was approved and my claim Just ended, now I will apply for the CERB, I am just wondering if I only get the one payment for $2000?? I thought people were entitled for 24 weeks. I’m a single mother who works for stadiums as a bartender and I know we won’t be back to work for months. I don’t know what to do, my son will be doing remote learning because the masks and social distancing is not going to work for him. I wont have any hours for EI because they put me on EI and not CERB and they would not let me change it. I’m totally screwed.

  13. This was a very well researched and presented article/document . Very appreciated .
    I sent in my Roe to EI just at time as all was switching to Cerb. My Cerb is finished end of Sept. I have been doing my EI reports since the beginning. When Cerb ends will I automatically continue to now receive EI and continue my reports or do I have to reapply? Also how do I calculate how much I will be receiving , is it 55 % of my earnings? Thank you so much for all you do to keep us informed . Donna Brazeau

  14. Hi David, I’m doing some work in this area and was wondering how you arrived at this conclusion: “Next, there are 553,000 people who are technically employed but have no hours. This group isn’t on layoff, they aren’t on vacation and they aren’t on any other sort of leave; their only unique feature is that they usually have hours and in July they had none.”

    How are you arriving at this 553k number, excluding (presumably) those who are on vacation from the LFS data? My assumption was this was a change in the baseline for the year over year change of individuals working zero hours but that only accounts for about 172k individuals.

    Thank you for your work and perspective.

  15. So you pass the buck to a member of Parliament!!!! EI should be dealing with our EI issues, NOT ignoring it!!!!!!!!!!!!

  16. People like myself who started EI 2 weeks before the government transitioned new EI claims to CERB got nothing except a looming clock ticking down on our entitlement weeks while nobody was hiring. After 20 years of working and only getting 8.5 months of eligible EI weeks, to lose 4 months because of the pandemic and not get extensions on EI is crippling.

    Our government should be ashamed, they gave CERB to kids 15 and older who had part time jobs and lived at home with parents, but ignore a large group of new EI recipients.

    Shame on Trudeau and this government.

  17. I only started collecting CERB in June as my EI ran out at that time. Will I still be able to collect for the full 28 weeks or will I be out of luck and not be able to collect EI as I lost my job in 2019?

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