As CERB moves to EI, economist warns confusion over transition might result in missed payments

Just more than a week from now, the Canada Emergency Response Benefit will wind down — and the change has some fearing many Canadians will slip through the cracks. Most recipients will still be able to get government support — just not as much.

With the benefit ending on Sept. 27, Brad Phillips is one of millions of Canadians facing uncertainty about what happens next.

"It meant so much to me. It meant I could pay my bills, I could put food in my fridge," he said.

"There's a lot of grey areas with the new stuff," said Phillips, adding he hopes the CERB program is extended.

Prior to the pandemic, Phillips worked at an automotive shop as a CNC worker. The shop shuttered but has since reopened. Since it's a small operation, however, Phillips hasn't been called back to work.

"I was home for the first month before they announced the CERB was coming out. Honestly, I didn't know what we were going to do. I didn't know how we were going to pay our bills," said Phillips. "My wife is working but, nowadays, you can't live off one paycheck. It's just not possible in today's economy."

For Phillips, CERB meant the 30-year-old wouldn't have to move back in with his parents. Now that CERB is coming to an end, however, he expects to be eligible for one of the federal government's new benefit programs but he's "not 100 per cent sure."

"Honestly, it's like pulling teeth. The CRA does not want to give you the answers you need. They beat around the bush," he said.

"Whenever CERB was late, I called eight times and got eight different answers on what was going on."

While most CERB recipients will qualify for other government assistance, many will have to submit a new application — and nearly half a million people will miss out on any government support, according to David Macdonald, a senior economist at the Canadian Centre for Policy Alternatives.

He said the switch toward an EI-based system will financially hurt millions of Canadians since "they'll make less than the 500 dollars a week they made on CERB."

"About three quarters of people will see less than what they got on CERB either because they're getting something that's less than 500 dollars a week," said Macdonald. "Or they're getting nothing."

One of the biggest reasons why consumer spending rates remained steady throughout the pandemic, Macdonald said, was because CERB was "quick to access, more generous to most people than EI and it covered a lot more people than EI ever covered."

As those benefits start to be reduced, he added, millions of Canadians will see their personal budgets tightened.

"But what that also means is they're going to be cutting their own spending in the economy and we'll, no doubt, see a hit on spending in general from households."

According to the government's website, those receiving benefits through Service Canada will automatically transition to EI program once they have received the maximum CERB benefits.

For the people who are receiving CERB from the Canada Revenue Agency (CRA) who believe they are eligible for EI will need to apply through Service Canada after September 26 and will not have their claims forwarded.

Macdonald said that transition is confusing.

"So this is just one example, I think, of people not being clear on where they're going to go afterwards, what programs they should apply to, when they should apply for them," he said. "These new Canada recovery programs aren't even legislation yet. They won't be passed until the House of Commons comes back."

"There's a four-day period between the time when the House comes back and the time when CERB ends for all these new programs to be created and then to have all their websites up and running. So it's going to be not only a complicated time for Canadians who are trying to switch over, but many of these programs haven't even been created yet — and so it's a real recipe for confusion and missed benefits."

Macdonald, as noted in an article published last month, is calling for EI to be switched to an attestation-based system, similarly to how CERB worked. In other words, for the first payment, applicants could simply check off a box to indicate they qualify for EI.

In future months, applicants could get their paperwork in order and submit information as they normally would under the EI system to receive following payments.

"This is how CERB ran, which is you just check a box on a website which says you are eligible. EI does not work that way, but it could," said Macdonald, adding that it would alleviate the initial influx of people moving over from CERB to the new benefit programs.

"Let's move the money out quickly and then check the paperwork afterwards."

Confused about how the transition from CERB to EI will work and what it will mean for you? Click here for our CBC News explainer.