Canada's New Benefit System Leaves A Third Of The Jobless Out In The Cold: Report

MONTREAL ― The federal government should quickly update its plans for emergency unemployment benefits to include a large group of jobless Canadians who have fallen through the cracks of the new system, a report from a progressive think tank says.

The report from the Canadian Centre for Policy Alternatives says some 862,000 people ― or nearly one-third of the estimated 2.7 million Canadians who were unemployed at the end of March ― will get no help from either the Employment Insurance program or the new Canada Emergency Response Benefit (CERB).

People line up at a Service Canada office in Montreal on Thursday, March 19, 2020. (Photo: Paul Chiasson/The Canadian Press)

To qualify for the CERB, you have to have lost your job as a result of the COVID-19 pandemic, but 1.2 million Canadians were already unemployed when the crisis hit, report author David Macdonald pointed out. Of those, only half, or about 600,000, qualify for Employment Insurance.

“If you were unemployed before COVID-19 hit, you get nothing from CERB, even though the prospects of finding work right now are virtually non-existent,” Macdonald said in a statement.

Of those who lost their job since COVID-19 hit, some 200,000 won’t qualify for CERB because they won’t meet the requirement of having earned a minimum of $5,000 in the previous year, he said.

The sectors most affected have many precarious or part-time workers, such as hospitality, retail and seasonal industries, where many may not have made $5,000 in the past year, Macdonald said.

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And he sees another large group of unemployed people ahead who won’t qualify for income support: Summer students.

“Students (who) might have had jobs lined up or are looking right now will see the highest unemployment rate since the 1930s in the next two months, so there is no real prospect for students looking for jobs to get jobs,” Macdonald told HuffPost Canada.

“They won’t have access to EI or the new emergency benefit because they didn’t have a job to lose.”

Macdonald estimates the jobless rate for youth will hit 30 per cent this spring.

System needs ‘tweaking’

He is urging the government to “tweak” the CERB by removing the requirement that someone had to have lost their job as a result of COVID-19 to qualify, and also to remove the $5,000 minimum earning requirement.

He is also urging the government to increase payouts from the EI fund, noting that 390,000 people receiving EI are getting less than the $500 a week CERB recipients get, simply because of when they applied.

“I actually think the CERB system is a good system,” Macdonald said, noting that it was “developed in a week and a half, between announcement and cheques going out the door ― that’s light speed in terms of policy.”

He hopes that flexibility will apply again in the coming weeks, as the unemployment situation worsens.

“The feds seem very open to improving these systems as they’re rolled out,” he noted.

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This article originally appeared on HuffPost.