There is a debate under way as to whether Canada responded well — and well enough — to the need for financial assistance in response to the COVID-19 crisis. Ottawa initially introduced a two-pronged approach and subsequently merged the two programs: Employment Insurance and the Canada Emergency Response Benefit for those not eligible for EI.
Turns out, the latter comprised a large group. That should have come as no surprise. For years, shortcomings had been identified in EI and the programs for working-age Canadians, known as “adult benefits.”
While by no means perfect, Canada has a generally good system of seniors’ benefits that replace lost income. Canada also has an effective system of child benefits for families.
While most households receive some payment from the Canada Child Benefit, it pays higher benefits to lower-income families. Unlike seniors’ programs, child benefits don’t replace household income. They supplement income so families can pay for the basics for their children.
With the two ends of the age spectrum covered through relatively solid systems, financial security for those in the middle rests on more shaky ground. In broad terms, this group comprises 18- to 64-year-olds who are employed or seeking work.
Two main programs provide financial assistance to this “missing middle”: the Canada Workers Benefit (CWB) and EI. The CWB supplements low earnings while EI replaces lost earnings. This package is supposed to ensure income security for Canadians workers.
They don’t. We have known this for some time.
As a wage supplement, the CWB is intended as a work incentive. Unfortunately, few Canadians have ever heard of it and most don’t realize they may be receiving it. The benefit is so modest and the design so narrow as to be negligible in its assistance.
EI design based on regional balances has created serious eligibility problems. When EI sickness benefits expire after 15 weeks, there is no alternative but provincial welfare. These are just a few examples of the wide-ranging problems in EI.
While some important improvements have recently been introduced, the fundamental gap remains. It took a pandemic to bring this problem to the fore.
The shortcomings of EI became starkly clear during the frantic rush to create an emergency benefit to assist the millions of Canadians with no coverage. These include workers with insufficient hours, the self-employed, temporary foreign workers, students seeking permanent or part-time work, and others excluded from the EI tent.
Ottawa acted swiftly to introduce an emergency benefit in response to COVID-19. The hastily constructed platform miraculously survived the tidal wave of applications. Day-by-day, the new program opened its doors to the lineup of those excluded from the initial iteration.
Canada will survive the crisis. But when we’re on the other side, we will need more than lifeboats to keep the missing middle afloat. We will need to shore up the system of “adult benefits” that had long been sinking and is in need of major repair.
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