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Preliminary analysis of the new Canada Emergency Response Benefit Act

Publication March 26, 2020 - 7 PM ET

On March 25, the Canada Emergency Response Benefit Act (Act) was passed to provide financial support to workers suffering a loss of income for reasons related to COVID-19 (CERB). According to government announcements, "[t]he CERB will be a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit," which have already been addressed in our publication relating to the "COVID-19 measures implemented by the Canadian and Quebec governments." For purposes of this update, we have identified the highlights of the Act
 
We would, however, like to point out that this Act establishes various principles that will be specified, or adjusted, in future regulations. We will keep you informed of any developments in this regard.  

Summary

Based on the government announcements:

  • The CERB will be taxable and offer $2,000 per month for up to four months to workers who lose their income as a result of the COVID-19 pandemic; 
  • The portal for accessing the CERB will be available in early April; 
  • Canadians will begin to receive their CERB payments within 10 days of application;
  • The CERB will be paid every four weeks; and
  • It will be available from March 15, 2020, until October 3, 2020.

Canada Emergency Response Benefit

Workers

Workers must be at least 15 years of age, a resident in Canada and, for 2019 or in the 12-month period preceding their application, have a total income of at least $5,000 (or any other amount determined by regulation) from:

  • Employment;
  • Self-employment;
  • Employment insurance maternity or parental benefits; or
  • Allowances, benefits or amounts paid under a provincial plan, because of pregnancy or parental care. 

Eligibility

To be eligible, workers must:

1. Have involuntarily ceased to carry on their employment for reasons related to COVID-19 for at least 14 consecutive days including in the period of four weeks for which they are applying for CERB; and

2. Not receive, during that period: 

  • Employment income (including that resulting from self-employment), with the exception of any category of income excluded by regulation; 
  • Benefits paid under the Employment Insurance Act
  • Allowances, benefits and benefits paid under a provincial plan, because of pregnancy or parental care; or 
  • Any other income determined by regulation. 

CERB application

The application procedure, including its formalities, will be determined by regulation. The application may cover any period of four weeks included between March 15, 2020, and October 3, 2020. No CERB application may be submitted after December 2, 2020. 

Amounts and duration of CERB

The amount of CERB to which the eligible worker is entitled for one given week will be determined by regulation, as it is not specified in the Act. Furthermore, the regulation could treat various categories of workers differently. In all cases, the CERB may be paid only up to 16 weeks or for the number of weeks to be determined by regulation. 

Record of employment

The employer must produce a record of employment each time there is an interruption of earnings for one of its employees. Such an interruption of earnings occurs when employees: 

  • do not receive insurable earnings from their employer for seven consecutive days; or
  • earn less than 60% of their normal weekly earnings because they are sick, injured or placed in quarantine, they provide parental or family care or support or, in the case of female employees, because of pregnancy or childbirth.


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