Canada Gazette, Part II, Volume 155, Number 18
SOR/2021-204 August 12, 2021
CANADA RECOVERY BENEFITS ACT
P.C. 2021-880 August 11, 2021
Her Excellency the Governor General in Council, on the recommendation of the Minister of Employment and Social Development and on the recommendation of the Minister of Finance with respect to section 1 of the annexed Regulations, and on the recommendation of the Minister of Employment and Social Development with respect to sections 2 to 4 of the annexed Regulations, pursuant to subsection 9(2), paragraph 24(b) and section 24.1 footnote a of the Canada Recovery Benefits Act footnote 1, makes the annexed Regulations Amending the Canada Recovery Benefits Act and the Canada Recovery Benefits Regulations.
1 The Canada Recovery Benefits Act footnote 1 is amended by replacing “September 25, 2021” with “October 23, 2021” in the following provisions:
2 The Canada Recovery Benefits Regulations footnote 2 are amended by adding the following after section 1:
Canada Recovery Benefit
2 For the purpose of subsection 9(1) of the Act, the maximum number of two-week periods in respect of which a Canada recovery benefit is payable to a person is 27.
3 The Regulations are amended by adding the following after section 3:
4 For the purposes of subparagraphs 10(1)(g)(iv) and 17(1)(g)(iv) of the Act, the benefit set out in section 9.1 of the Act is prescribed income.
4 These Regulations come into force on the day on which they are registered.
(This statement is not part of the Regulations.)
Issues: Recovery benefits have been introduced by the Government of Canada to provide income support during the COVID-19 pandemic from September 2020 to September 2021. However, the path of economic recovery remains uncertain and it is expected that some workers currently receiving the recovery benefits will continue to need support past September 25, 2021. In addition, many Canada Recovery Benefit (CRB) claimants will begin to exhaust their benefit entitlement on September 11, 2021.
Description: The Regulations Amending the Canada Recovery Benefits Act and the Canada Recovery Benefits Regulations (the Regulations) extend the periods during which the recovery benefits are available from September 25, 2021 to October 23, 2021; increase the maximum number of weeks of CRB entitlement by 4 weeks up to a maximum entitlement of 54 weeks of income support; and prescribe as income the gap-week $300 payment that may be paid to certain persons for the purposes of the Canada Recovery Caregiving Benefit (CRCB) and the Canada Recovery Sickness Benefit (CRSB).
Rationale: While vaccination efforts are underway, more job losses and delays in re-employment are possible before the economic recovery gains a stronger hold. Continued public health restrictions warrant an extension to October 23, 2021, of the periods during which recovery benefits are available, and warrant adding an additional 4 weeks of entitlement for the CRB. In particular, some workers who began their claims when the recovery benefits first became available for periods starting on September 27, 2020, could begin to exhaust their benefits as early as September 11, 2021. In addition, workers exhausting their 50 weeks of Employment Insurance regular benefits (EI exhaustees) would not be able to access the CRB without these additional weeks. Extending the periods for which recovery benefits are available and increasing the weeks of entitlement for the CRB will provide eligible workers with increased income security, if needed, until the economic recovery gains a stronger hold.
Based on current CRB, CRCB, and CRSB claimant usage data, it is estimated that 1.8 million recipients would directly benefit from the extension to October 23, 2021, and the additional 4 weeks of CRB entitlement. Similarly, 0.3 million claimants are expected to exhaust EI benefits and will be able to apply for the Canada Recovery Benefit provided under the Canada Recovery Benefits Act (CRB Act). A total of 2.1 million recipients are expected to directly benefit from additional income support, with an estimated benefit value of $2.133 billion. The Regulations will also result in additional health and environmental benefits, as well as indirect benefits associated with the economic stimulus, which were not monetized. Incremental costs for these Regulations are estimated to be $2.178 billion (present value). These include approximately $2.133 billion for program costs to provide additional income support to recovery benefit recipients and $45 million (present value) in operating costs for the Canada Revenue Agency and costs to employers associated with lost economic productivity, which were not monetized. The net present value of the Regulations is −$45 million.
Since September 27, 2020, many Canadians who have been unable to work due to COVID-19 have been relying on Employment Insurance (EI) benefits and the recovery benefits — consisting of the Canada Recovery Benefit (CRB), which is available for up to 50 weeks; the Canada Recovery Caregiving Benefit (CRCB), which is available for up to 42 weeks; and the Canada Recovery Sickness Benefit (CRSB), which is available for up to 4 weeks — to provide income support until September 25, 2021.
However, the path of the COVID-19 pandemic remains uncertain. While vaccination efforts are underway, footnote 3 more job losses and delays in re-employment are possible before the economic recovery gains a stronger hold. It is expected that many workers receiving the recovery benefits will continue to need support past September 2021. In addition, many CRB (and EI regular benefit) claimants will begin to exhaust their benefit entitlement on September 11, 2021.
If the periods during which recovery benefits are available are not extended past September 25, 2021, and the number of weeks of entitlement for the CRB are not increased, Canadian workers may find themselves without the income supports needed to help them through continued unemployment or reduced work hours, as they await the anticipated positive impacts of the COVID-19 vaccination efforts and economic recovery on the labour market. Additionally, some workers are expected to continue to need financial support beyond September 25, 2021, to help them manage interruptions in their employment resulting from COVID-19–related caregiving responsibilities, quarantine and sickness.
These Regulations directly support the Government of Canada's response to the COVID-19 pandemic and the analytical requirements for cost-benefit analysis have been adjusted to permit a timely and effective response.
The COVID-19 acute respiratory disease is a condition in which affected individuals develop fever, cough and/or difficulty breathing. In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and death. Human-to-human transmission is the main driving force of the current COVID-19 pandemic.
As a result of public health measures that have been put in place across Canada to mitigate the spread of COVID-19, many workplaces have closed temporarily or permanently, negatively impacting workers and employment prospects.
As part of Canada's COVID-19 Economic Response Plan, the CRB, the CRCB, and the CRSB were introduced through the CRB Act to help workers unable to work due to COVID-19 during the period beginning on September 27, 2020, and ending on September 25, 2021. The maximum entitlement for the CRB and CRCB was initially set at 26 weeks, while the maximum entitlement for the CRSB was 2 weeks; however, the CRB and CRCB entitlement were extended to 38 weeks and the CRSB to 4 weeks through amendments to the Canada Recovery Benefits Regulations.
The Budget Implementation Act, 2021, No. 1 (BIA 2021), which received royal assent on June 29, 2021, amended the CRB Act to
The CRB supports workers ineligible for EI who, for reasons related to COVID-19, are not employed or self-employed, or had a reduction of at least 50% in their average weekly employment or self-employment income. It provides for up to 50 weeks of income support, which is payable at $500 a week for the first 42 weeks (if claimed for a period starting before July 18, 2021) and payable at $300 per week for any week paid beyond 42 weeks or to all first-time claimants claiming for a period starting on or after July 18, 2021.
The CRCB provides income support to employed or self-employed individuals who are unable to work at least 50% of the time they would have otherwise worked in that week because they must care for a child under the age of 12 or a family member who requires supervised care because the school, program or other facility that the child or family member normally attended was unavailable or closed, or because the child or family member has contracted or might have contracted COVID-19, is required to self-isolate, or is at risk of serious health complications because of COVID-19. It provides $500 a week, paid on a weekly basis, for up to 42 weeks per household.
The CRSB provides income support to workers who are unable to work at least 50% of the time they would have otherwise worked in the week because they contracted COVID-19 or must self-isolate for reasons related to COVID-19, or because they have underlying conditions, are undergoing treatments or have contracted other sicknesses that would make them more susceptible to COVID-19. It provides $500 a week, paid on a weekly basis, for a maximum of 4 weeks.
BIA 2021 amended the CRB Act to allow certain persons who were paid benefits under the Employment Insurance Act (EI Act) since September 27, 2020, to also receive benefits under the CRB Act. In cases where a person exhausts EI benefits during the first week of a two-week CRB benefit period, the person may be entitled to a gap-week $300 benefit payment (the gap-week payment), equivalent to one week of the CRB entitlement. The intention of the gap-week payment is to provide additional income support to individuals who would otherwise have been eligible to receive the CRB (had they not received EI benefits for part of the CRB claim period). The $300 gap-week payment is being prescribed as income to ensure that individuals cannot receive the CRSB or the CRCB for the same week that they received the $300 payment.
The objectives of these Regulations are to
The Regulations Amending the Canada Recovery Benefits Act and the Canada Recovery Benefits Regulations are being made to extend the periods during which the recovery benefits are available from September 25, 2021, to October 23, 2021, and increase the maximum number of weeks of CRB entitlement by 4 weeks up to a maximum entitlement of 54 weeks of income support.
The Regulations are also being amended to prescribe the payment made under section 9.1 of the CRB Act (the $300 gap-week payment) as income to ensure that individuals cannot receive the CRSB or the CRCB for the same week that they received the $300 payment.
The Regulations respond directly to the continuing and extraordinary economic circumstances posed by the COVID-19 pandemic. These measures need to be in place expeditiously to be effective. Consequently, consultations were not undertaken and the Regulations were granted an exemption from prepublication in the Canada Gazette, Part I.
The CRB Act provides the Governor in Council, on the recommendation of the Minister of Employment and Social Development and the Minister of Finance, the authority to extend the periods during which recovery benefits are available to no later than November 20, 2021. The CRB Act also provides the Governor in Council authority to fix the number of two-week periods of CRB entitlement through regulations. Although vaccination rates are increasing across Canada, with 48.7 million doses administered, footnote 4 there is still some uncertainty with the trajectory of the pandemic and some sectors are still under restrictive measures. Extending the CRB by 4 weeks, for a total of 54 weeks of benefits, and extending the period during which the recovery benefits are available to October 23, 2021, balances the positive employment and economic outlook with the need to provide certainty and support to Canadian workers who are still encountering difficulties returning to work.
Using existing regulatory authorities ensures continuity in income supports for Canadians who would otherwise begin to exhaust their entitlement to the CRB or EI regular benefits on September 11, 2021, and those who will continue to need income support through the recovery benefits past September 25, 2021. Additionally, the Governor in Council is authorized to prescribe as income in the Regulations the $300 payment that may be available under section 9.1 of the CRB Act. These Regulations will ensure that EI exhaustees in receipt of the $300 payment cannot also receive the CRSB or the CRCB for the same week.
An assessment of modern treaty implications on the measures was conducted in support of the proposal. There are no implications for modern treaty obligations or Indigenous engagement in the Regulations.
Benefits and costs for the Regulations were assessed for the 2021–2022 and 2022–2023 fiscal years. Estimates are presented in 2021 dollars and are discounted to present values using a 7% discount rate.
The extension of the recovery benefits to October 23, 2021, and the additional weeks of entitlement for the CRB available through these Regulations provide critical income support to Canadians who are unable to work due to COVID-19. The monetized benefits for Canadians, which are also the direct costs of these Regulations, are estimated to be $2.133 billion. The Regulations are also expected to provide health benefits, environmental benefits, and economic stimulus, accelerating the economic recovery coming out of the pandemic. However, these benefits are not quantified in this analysis. The Government of Canada will incur a total cost of $45 million to administer the program.
To ensure there are no gaps in benefit payments, some EI exhaustees may be eligible for a $300 payment for one week between their EI and CRB claims. There are no anticipated costs associated with amending the Regulations to prescribe the $300 payment as income so these claimants cannot also receive the CRSB or the CRCB for the same week.
The proposal directly supports the Government of Canada's response to COVID-19 and the analytical requirements for cost-benefit analysis have been adjusted to permit a timely and effective response.
Under the baseline scenario, the current end date for the recovery benefits remains at September 25, 2021, and the maximum weeks of entitlement remain unchanged at 50 weeks for the CRB. Many Canadians will find themselves without benefits between September 11, 2021, and September 25, 2021, as they begin to exhaust benefit entitlement and the recovery measures end. As of June 27, 2021, over 2 million workers have accessed the CRB, 428 000 the CRCB and 608 000 the CRSB.
If current trends persist, around 1 430 000 workers could benefit from the CRB extension to October 23, 2021, and the additional 4 weeks of CRB entitlement. Although provinces and territories have initiated reopening plans, some sectors, such as accommodation and food services, as well as tourism and culture, have not reopened or are partially reopened. As such, employment levels in these sectors have not returned to pre-pandemic levels. For example, even though the number of people working in the accommodations and food services industry rose by 101 000 (+11.8%) in June 2021, it remains 21.6% (−263 000) below its pre-COVID employment level. footnote 5 In addition, it is estimated that as many as 290 000 EI claimants could exhaust their regular EI benefits in September 2021. Without an increase in the number of weeks available under the CRB, EI exhaustees who are unable to find work, will not be eligible for the CRB.
Extending to October 23, 2021, the periods during which recovery benefits are available, is also expected to benefit 251 000 CRCB claimants and 121 000 CRSB claimants. The CRCB allows individuals to care for children who need to self-isolate or are sick, also reducing the risk of exposure to others. In the absence of additional CRCB entitlement, parents may be more likely to send their children to childcare facilities when they should be self-isolating, risking exposure to others. The CRSB allows individuals who have COVID-19 or are self-isolating due to COVID-19 exposure to stay home from work.
Under the regulatory scenario, the maximum CRB entitlement is extended to 54 weeks while the eligibility period for the recovery benefits is extended from September 25, 2021, to October 23, 2021. The regulatory scenario will result in additional program and operating costs for the Government of Canada. There may also be costs to businesses associated with lost productivity such as overtime. The benefits of the regulatory scenario go beyond the direct income support provided to Canadians and are expected to result in economic and societal benefits that can be indirectly attributed to the extended benefit during which benefits can be claimed and the additional entitlement for the CRB.
The incremental costs of the Regulations are estimated to be $2.178 billion (present value). These costs include $2.133 billion for program costs to provide additional income supports to CRB, CRCB and CRSB recipients, which will be sourced from the Consolidated Revenue Fund (CRF) consistent with the CRB Act, as well as $45 million (present value) in operating costs for the Canada Revenue Agency (CRA).
Additional program payments resulting from the Regulations are expected to be $2.133 billion. Operating costs to the CRA to administer the additional weeks of benefits under the programs are expected to be an additional $45 million. Incremental administration costs are to support a number of functions across the CRA, of which the majority of the effort is focused in the following functions: collections & verifications and taxpayer service and assistance. For this reason, some operating costs extend into the 2022–2023 fiscal year.
|Program||Program costs (present value)||Operating costs (present value)|
|CRB||$1.841 billion||$33 million|
|CRCB||$212 million||$6 million|
|CRSB||$80 million||$6 million|
All of the program costs will be funded from the CRF.
COVID-19 and the subsequent public health measures have resulted in the temporary closures of many workplaces. The pandemic and the resulting restrictions on the labour market also resulted in a temporary decrease in economic output with many workers being required to stay home. During this period, the Government has provided income supports to workers who have been unable to work due to COVID-19. While vaccination efforts are underway, and provinces and territories have initiated reopening plans, more job losses and delays in re-employment are possible before the economic recovery gains a stronger hold. Since these Regulations extend the entitlements to income supports for the CRB, as well as extend to October 23, 2021, the periods during which the three recovery benefits are available, there will be some lost economic productivity as a result of the provision of the extended eligibility windows. Most of this lost productivity is attributable to the COVID-19 pandemic and the public health measures put in place rather than from the extended eligibility window. However, it is assumed that there would be a small impact on economic productivity from extending the eligibility window. It is assumed that the availability of these extended eligibility windows will result in some workers delaying their return to work, choosing for example, to stay home and collect income support rather than going to work while sick with COVID-19, to stay home and care for their children when schools are closed, or to stay with grandparents who may be more susceptible to the severe symptoms of COVID-19. These decisions are assumed to result in significant health benefits (described later) but they would also result in an economic cost from the lost labour output that these workers may have otherwise contributed.
It is also assumed that there would be a small loss in economic productivity due to some CRB recipients decreasing their work search intensities. However, this loss would only occur in instances where employers were unable to fill jobs that would have been filled had the additional weeks of benefits not been provided. This cost would be mitigated by the requirement that CRB recipients be available and looking for work, and that they may not turn down work offers unless it is reasonable to do so. The lost economic productivity from the CRB is expected to be smaller than the CRCB or CRSB because CRB recipients are involuntarily unemployed because of the pandemic (i.e. they are not taking leave from current employment). It is assumed that the improved social outcomes from increases to the number of weeks available for the CRB and the extension to October 23, 2021, of the periods during which recovery benefits are available under these Regulations significantly outweighs the loss in economic productivity.
Employment and Social Development Canada (ESDC) does not have data on the number of people who would work were it not for the income support provided through the benefits.
The Regulations could impose additional incremental costs on federally regulated employers whose employees may prolong or take new caregiving-related or sickness-related leave (available under the Canada Labour Code) as a result of the extended eligibility window. Employers who use overtime from existing employees to cover the work of employees on leave would incur a cost from the additional 50% of salary paid for overtime work. ESDC does not have data on the number of people in the federally regulated private sector who used the CRCB or the CRSB.
The extension to October 23, 2021, of the periods during which recovery benefits are available and the increase in the maximum number of weeks of the CRB ensures that workers across Canada whose employment continues to be affected by the COVID-19 pandemic continue to have access to income support, if needed.
Based on available CRB claimant usage data, it is estimated that over 1.8 million recipients would directly benefit from the additional weeks of income support and the extension to October 23, 2021, of the periods during which recovery benefits are available, while 0.3 million claimants are expected to exhaust EI benefits and will be able to apply for the Canada Recovery Benefit. Recipients are estimated to receive an additional $2.133 billion in income support, equivalent to the amount of program costs.
The Regulations are also expected to have some health benefits, particularly related to helping to facilitate improved health outcomes. Modelling suggests that the more contagious and severe Delta variant may result in greater than expected resurgence this fall/winter. footnote 6 A number of countries are attributing surges in infections and hospitalization to this variant. Without the extension of eligibility periods for recovery benefits, workers who are ill with COVID-19 or required to self-isolate could be more likely to return to their employment and less likely to self-isolate, increasing the risk of spreading the virus to others. In addition, this will help reduce the deaths related to COVID-19. Monetizing the health benefits identified above is difficult, notably in part due to the uncertainties regarding the path of the pandemic and the public health measures that may be introduced or relaxed as a result. However, it is likely that the monetized value of these benefits would be significant.
These Regulations are also expected to have minor positive environmental benefits. Due to the extension of the eligibility period for recovery benefits, some CRSB and CRCB beneficiaries who would otherwise have gone to work by personal vehicle will remain at home, positively impacting the environment. The value of this benefit is not quantified.
The additional income supports to individuals who, because of the pandemic, are not able to work and would otherwise have no income will provide indirect economic benefits that arise from the spending of these income supports in the economy. This spending will help keep some businesses open that would otherwise have closed, and help keep some individuals employed when they would have otherwise lost their jobs. This in turn helps reduce the demand for these income supports and will likely assist with accelerating the economic recovery coming out of the pandemic. In addition, access to the additional income supports could have indirect societal impacts by reducing the risks of homelessness or childhood poverty.
|Costs and benefits||Amount ($ millions)|
|Implementation costs to Government||2,133.1|
|Program costs to Government||45.1|
|Additional income supports||2,133.1|
|Total benefits − Total costs||−45.1|
While only net costs were monetized, it is expected that if the qualitative benefits of this measure were monetized that the benefits would exceed the costs.
As of 2019, small businesses (those with fewer than 100 employees or less than $5 million in revenue) employed 8.4 million individuals in Canada, or 68.8 % of the total private labour force. footnote 7 These businesses are generally less well equipped to absorb long-term absences of employees as compared to larger businesses and therefore, could be impacted by the loss of economic productivity due to the pandemic and the related public health measures and restrictions on the labour market.
These Regulations do not provide specific flexibility for small businesses. The increase to the maximum number of weeks of entitlement for the CRB and the extension to October 23, 2021, of the periods during which recovery benefits are available will not result in additional administrative burden for small businesses.
The one-for-one rule does not apply to these Regulations, as there is no incremental administrative costs to businesses.
The Regulations do not have implications for international agreements (trade, environmental, human rights, etc.), obligations, or voluntary standards. It is not aimed at minimizing or reducing regulatory differences, nor at increasing regulatory compatibility with another jurisdiction. It does not introduce specific Canadian requirements that differ from existing regulations in other jurisdictions for an international program. It does not seek to enable regulatory alignment with the United States as committed to under the Joint Action Plan for the Canada–United States Regulatory Cooperation Council.
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
The Regulations assist a broad range of workers who, for various reasons related to COVID-19, are unable to work or had a reduction of at least 50% in their average weekly employment or self-employment income. The Regulations do not target persons of a particular gender or identified group; however, some proportional and differential impacts have been identified using preliminary program data, between September 27, 2020, and June 27, 2021.
The administrative data contains information, by benefit type, on the number of recipients by week, total weeks of benefits received, 2019 income of recipients, gender, age group, and province of residence; however, the data did not allow for cross tabulations (e.g. gender breakdown by province). In addition, the data does not contain information on industry or type of work.
Beneficiaries of the Canada Recovery Benefit (CRB) are predominantly men, making up 53% of claimants, while males aged 15 and over also make up 53% of the labour force. Among the beneficiaries of the CRB, 44% of claimants are between the ages of 24 and 45 years old. Further, there was an over-representation among low-wage workers, as 62% of all beneficiaries earned less than $20,000 or had no tax filing in 2019. The CRB is available to workers who are not eligible for EI. This includes workers who have not worked enough hours to qualify for EI and workers who do not pay EI premiums, such as self-employed individuals.
The Canada Recovery Caregiving Benefit (CRCB) targets caregivers and families with children. CRCB beneficiaries are more likely to be women, with 63% of CRCB beneficiaries as of June 2021 being women, and 69% of claimants are between the ages of 25 and 45 years old. As a comparison, men comprise 53% of labour force participants aged 15 and over while women comprise 47%. The majority, some 64% of beneficiaries, earned annual income of less than $20,000 or had no tax filing in 2019. Increasing entitlement to CRCB would benefit low-wage workers to a greater degree than the general population as it replaces a greater percentage of their income.
The Canada Recovery Sickness Benefit (CRSB) has been distributed fairly equally between men (52%) and women (48%), and is highest among claimants aged between 25 and 54 years old (61%). The 25–54 age group makes up 64% of labour force participants. Men make up 52% of this age group and women represent 48% of this age group. footnote 8 Over half of Canadians report not having access to paid sick leave. That proportion is even higher for low-wage earners. Approximately 48% of CRSB beneficiaries earned less than $20,000 or had no tax filing in 2019.
No data for other identity groups is available at this time.
|% of CRB beneficiaries||% of CRCB beneficiaries||% of CRSB beneficiaries||% of labour force|
|Manitoba et Saskatchewan||6%||13%||9%||6.5%|
The CRA administers and enforces the recovery benefits programs on behalf of the Minister of Employment and Social Development. The CRA already has the infrastructure in place but changes to the recovery benefits processing system are needed to allow for additional weeks of CRB to be paid.
Existing implementation and enforcement mechanisms contained in the CRA's adjudication and controls procedures will ensure that these regulatory amendments are implemented properly. These include for instance, functionality to perform client accounting, withholdings, issuance of tax slips to applicants, support for individual eligibility and entitlement tax assessment activities, and support for post-payment compliance and verification activities.
The Regulations come into force upon registration.
CRA provides Canadians with a single point of access to a wide range of government services and benefits, including the processing and payment of the Canada Recovery benefits. Existing service standards will continue to apply to the recovery benefits programs.
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