Unemployed workers in the pandemic may be breathing a bit longer: the Canadian Emergency Benefit (CHP) will be extended for everyone by eight weeks. Justin Trudeau believes that too many people are still looking for work to take action despite fears that this will hamper economic recovery. But one thing is certain, the bill for Ottawa will increase by tens of billions of dollars.
“The reality is that even if we resume certain activities, many people still need this support to pay their bills while they are looking for work,” said Prime Minister Trudeau. He said that if changes to the operation of the program were not on the menu at the moment, they were not excluded. “Over the next few weeks, our government will study international best practices, in addition to monitoring the economy and the spread of the virus, to determine if the program needs to be changed to better support people. “
The PKU pays $ 500 a week, or $ 2,000 a month, to anyone who has lost their income due to the pandemic. The PKU was initially expected to last a maximum of 16 weeks. For workers who started receiving it early in mid-March, payments would have dried up by July 5. For those, payments will now end on Saturday August 29.
Several voices were raised for the program to be extended. The NDP, for example, was asking for a 16-week extension. The Bloc Québécois suggested that the PKU be maintained for workers in sectors still in confinement or severely affected, such as tourism or the artistic community.
The Trudeau government did not choose the latter path, in particular because it would have required a change in the law after a vote in the House of Commons. However, parliamentary proceedings are scheduled to end this week and the unanimity of parties necessary to rush through bills is increasingly difficult to obtain. As drafted, the current law that established the ECP allows the government to proceed alone, by regulation, if it only wants to extend the program or change the amount to which providers are entitled.
The only change that will be made to the program is that in the certificate that applicants must sign at each eligibility period, there will be a mention of the jobs available on the Job Bank site, the largest bank of job offers. employment in the country. Officially, the program is not intended for people who have voluntarily left their job or have declined a return to work.
Prime Minister Justin Trudeau does not think this extension will keep workers at home longer. He systematically avoided answering questions on the subject, merely repeating that there are still about “3 million people who would like to work but who cannot work”.
The leader of the Bloc Québécois is not as confident as Mr. Trudeau. “Unfortunately, launched Yves-François Blanchet, in its current form, PKU is not very effective in promoting return to work because it creates a kind of barrier: if you have PKU, you could only work a few hours a week so as not to lose it when it is necessary to get people to give up PKU for the benefit of a return to employment. “
Mr. Blanchet would have preferred that the PKU be modulated rather to ensure that workers returning to work can keep a larger share of the PKU, or $ 0.50 for every dollar earned. A worker could earn up to $ 5,000 a month before losing the PKU entirely, compared to $ 1,000 currently. The Parliamentary Budget Officer calculated that such a change would increase the cost of the program by about 11%.
PKU is by far the most costly aid measure implemented by the federal government. As of last Thursday, Ottawa predicted that it would cost it $ 60 billion for its 16-week duration. At the time of this writing, Ottawa had not provided its exact estimate of the cost of the extension. “Our hope is that as the economy reopens, fewer and fewer people will need the PKU,” said Trudeau. Behind the scenes, we warn against the temptation to make a simple rule of three and deduce that PKU will cost 50% more (therefore $ 30 billion more) because it will last 50% longer. Already 1.2 million people have stopped using it even before their benefits run out, it is noted.
The announcement by Trudeau is also likely to ensure his survival in the confidence vote to be held tomorrow night in the House of Commons. NDP leader Jagmeet Singh said yesterday that he would support the government if he extended the PKU. Singh wanted a 16-week extension, but said he was “flexible” and ready to accept a similar proposal. The minority Liberal government needs the support of only one party to stay in power.
The Bloc Québécois has not yet announced whether it will support the government or not, waiting to see the responses it will receive to certain proposals put forward. The Bloc would like Ottawa to pay a second check for $ 300 to seniors, send an additional $ 500 million to the provinces to cover their health costs, improve aid for the agricultural sector and commit to making an economic update.
However, Blanchet said he would be very surprised if the government fell and an election was called now. “No one wants to send 20 million Canadians to line up to vote while we are still in the midst of a pandemic, during the construction vacation. This is a scenario which on its face is a joke. “
The Conservative Party has yet to say how it will vote tomorrow.
Last week, the government tried to pass a bill in the House of Commons that would have sent $ 600 to people with disabilities to get them through the crisis and that would have imposed penalties for fraudsters of the PKU. The unanimity required to quickly pass the bill was not obtained.
Trudeau has promised to find a way to provide financial assistance to people with disabilities without passing legislation. But he still hasn’t said what he would do with the fraudsters. The Canada Revenue Agency (CRA) reports that already 190,000 people have voluntarily reimbursed the ECP received when they were not entitled to it. The CRA says it has also received no less than 1,300 reports of possible fraud.