Toronto, August 20, 2020 – While the Canadian Federation of Independent Business welcomes aspects of today’s plans to transition the Canada Emergency Response Benefit (CERB) into the Employment Insurance (EI) system, the changes create many significant concerns and potential challenges for small employers.
I am pleased that many of the proposed changes are expected to be temporary and that government intends to freeze EI premiums for the next two years and ensure that the EI payroll tax does not increase along with rising CPP premiums. CFIB is also pleased that temporary benefits will continue to be available for the self-employed.
But the biggest concern for small business owners is that workers will now be able to collect EI benefits for up to 26 weeks after demonstrating only 120 hours of work over the past year. A worker with 3.5 weeks of total work (or 3 hours per week over the past year) will now qualify for over $10,000 worth of benefits if they do not return to work. When I was in grade 9, I worked 3 hours every Friday night washing dishes at a pizza restaurant in Winnipeg. This is just too low a bar and will serve as a disincentive for many part-time workers to return to their pre-COVID employment. I expect that retail, hospitality, arts and recreation and service sector businesses – the very sectors hardest hit by the economic effects of COVID-19 – will struggle to bring back their part-time workforce. This will slow Canada’s economic recovery.
While the transition will require recipients to be available and looking for work, we worry that the EI system will not know if an employer has asked a worker to return to their pre-COVID job.
CFIB is also concerned that many of these changes will be made permanent, especially with a Throne Speech expected in late September. EI changes that may make sense during a world-wide pandemic may have massive unintended consequences in ordinary times. Government has already signaled the potential of adding permanent paid sick-days, which would add billions to the cost of Employment Insurance every year. Also, CFIB is worried government may choose to expand mandatory EI coverage to the self-employed and business owners, further increasing their costs.
CFIB urges government to ensure these changes are temporary, raise the bar for the number of hours worked to receive benefits, create a system to end benefits for workers who have been recalled to their pre-COVID job and carefully consider, consult on and cost any permanent changes to the EI system.
- Dan Kelly, CFIB President
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Wissal El Alaoui, CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.