While the Canadian Federation of Independent Business welcomed 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 the federal government intends to freeze EI premiums for the next two years, ensuring the EI payroll tax doesn’t rise 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 be able to collect EI benefits for up to 26 weeks after demonstrating only 120 hours of work over the past year. Ìý
A worker with 3.5 weeks of total work (or under three hours per week over the past year) will now qualify for over $10,000 worth of benefits if they don’t return to work.Ìý
When I was in grade 9, I worked three 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.Ìý
I expect 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, thus slowing 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 worldwide pandemic may have massive unintended consequences in ordinary times. Government has already signaled the potential of adding permanent paid sick-days, adding billions to the cost of Employment Insurance every year.Ìý
Also, CFIB is worried government may choose to expand mandatory EI coverage to the self-employed and business owners, further increasing their costs.
CFIB urged the 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 and cost any permanent changes to the EI system.
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