Centrepiece aid program's many shortfalls make it unsuitable for economic recovery, argues one former policymaker
While it has proven to be very popular and wide-reaching in providing aid to individuals around the country, the Canada Emergency Response Benefit (CERB) has to be wound down in favour of more targeted programs.
That’s the view expressed by Janice MacKinnon, former Minister of Finance and Social Services in Saskatchewan, in a letter to federal policymakers published by the C.D. Howe Institute.
“CERB was an emergency program designed to get money quickly to recipients, which created many structural problems,” MacKinnon wrote.
The lack of screening for the program, she said, created an opening for opportunistic fraudsters. And because some essential workers earned wages that are lower than the CERB benefit, governments have had to implement programs to top up lower-income essential workers’ pay.
“And still unaddressed is the unpleasant surprise awaiting some CERB recipients who applied without understanding that it will be considered income, which will reduce other income tested benefits,” MacKinnon added.
Concerns have also been raised about how the size of the benefit could create a disincentive for people to return to work. To offset this, the federal government is proposing requirements for recipients to return to work upon request, re-open businesses when reasonable, and accept a reasonable offer of employment.
But as MacKinnon noted, there remains no incentive for workers to return to work. A proposal to reduce the monthly amount of other income that CERB recipients can earn from $1,000 to $500, she added, arguably lessens the incentive to work.
“As well as its many shortcomings, the CERB is expensive, costing more than $42 billion in 12 weeks,” she added. “A phase-out for CERB therefore seems the sensible course.”
She contended that Canada’s social safety net includes numerous targeted program that can easily be expanded in accordance with the need for added support. The CPP, OAS, and GIS, she said, can be enhanced to extend additional support for low-income seniors.
Similarly, the Canada Child Benefit and the Childcare Expenses deduction can be increased and expanded to aid lower-income families, as well as cover additional forms of childcare that may be necessary for Canadians returning to work.
“Also, the criteria for accessing Employment Insurance (EI) and the level and duration of benefits could be expanded so that more unemployed could use the program,” she said, qualifying that the government can prevent permanent increases in premiums by committing to end such changes as the economy improves.