Canada to Expand Employment Benefits as Covid Support Plan Ends

(Bloomberg) -- Prime Minister Justin Trudeau on Friday unveiled a plan to wind down his flagship Covid-19 income support benefit and bring recipients into an expanded employment insurance system.

At a press conference in Ottawa, Trudeau said the Canadian Emergency Response Benefit will be phased out as the first people to receive the C$2,000 ($1,494) monthly payments start losing eligibility at the end of August. Those who don't immediately qualify for employment benefits will receive a stipend while the government reworks the country's employment system.

“Here's the bottom line: we intend to cover every Canadian looking for work with a better 21st-century employment insurance system. That is our goal,” he said, adding that details will be released by the end of next month.

The move is part of an effort by the government to wean Canadians off the monthly aid and get them back into the workforce -- a delicate task for the governing Liberals. Pushing people off too quickly could come at a political cost and hamper the economic recovery. Moving too slowly could be just as risky, giving people a disincentive to get back to work.

As of June, only 40% of the 3 million jobs lost in March and April had been recovered.

About 8.5 million Canadians, more than 40% of the labor force, received at least one CERB payment. The program has already delivered C$63 billion in benefits.

Trudeau said premiums for employment coverage wouldn't increase during the crisis.

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