More on who will be worse off in the switch 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 the office of your member of Parliament for assistance with your Employment Insurance file. To find your member of Parliament and their contact information, visit the Parliament of Canada website and type in your postal code.

I recently looked at who could be left behind in the September rollover from the Canada Emergency Response Benefit (CERB) to employment insurance (EI). That analysis concluded that without EI modifications almost three million CERB recipients would be worse off after the switch. Of those, over two million wouldn’t be eligible for EI (and would get nothing) and another three-quarters of a million would get EI, but payments would be less than the CERB level of $500 a week. With that same dataset I wanted to examine some important regional difference and get a better understanding of how much less people could get from EI compared to the CERB.

Breaking down the CERB by province, we see that the more populous provinces of Quebec, Ontario, Alberta and British Columbia are home to the most recipients. However, 87% of CERB recipients in B.C. and 84% of recipients in Ontario will be worse off after they are rolled back into the EI program under the current rules. The counts in Ontario are truly concerning, with 1.2 million CERB recipients being worse off after they are switched to EI. Of those 1.2 million, almost 900,000 won’t be eligible for EI and will be cut off, if changes aren’t made to the program.

Many CERB recipients are EI eligible under the current rules, but after March 15 all EI recipients were rolled into the CERB program. In the rollover back to EI, these people will continue to receive income support. However, the CERB provided a flat $500 a week in benefits ($2,000 every four weeks) whereas EI is calculated at 55% of one’s previous weekly earnings. EI does not have a floor on benefits except in some rare circumstances. Without a floor on EI benefits, an unemployed Canadian can receive much less than the CERB’s $500 a week.

The chart below shows what people will receive on EI after the transition from the CERB. There are 811,000 CERB recipients who will make less on EI after the transition. On average, those people will make only $312 a week vs. CERB’s $500 a week. However, the chart shows that a quarter of a million people will make only $100 to $200 a week, more than halving what they got on CERB. Another 70,500 people will make half what they got on the CERB ($200–$300 a week). Even CERB’s $500 a week left many people struggling. It could get a lot worse as the old EI rules kick in come September.

Making this transition as seamless as possible is going to be critical for millions of jobless Canadians.  To do so, rapid changes must be made to EI rules so people aren’t made worse off in the middle of a pandemic and facing the worst job market since the 1930s.  In particularly, the government needs to rapidly implement the following EI rule changes taken from the AFB Recovery Plan EI chapter:

  • 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.

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

3 comments

  1. See, I was layed off on March because of Covid19 and I applied for EI On March 18th and was approved and recieved 19 weeks of EI, they would not let me switch to CERB and now my claim ended and will apply for CERB am I only going to get one payment of 2K? I thought we are all entitled to 24 weeks of CERB. If this is not the case I’m in big trouble. I work for stadiums and they will not reopen for months and I’m a single mom with 2 kids who my youngest will have to do remote learning. My EI hours are used up. I can’t believe what’s happening alot of people are in the same boat. Average Canadians are totally screwed either way you look at it.

  2. What is happening with the changes needed
    To maternity leave requirements? Being short hours due to off work for 2 1/2 months because of Covid 19 pandemic, we do qualify for regular benefits because we just had a baby or expecting.. and don’t have the 600 hours to get maternity EI! What is being done to help us!!

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