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Feds expand CERB, planning pay increase for some essential workers

Last Updated Apr 15, 2020 at 1:42 pm EDT

The federal government is making changes to its COVID-19 programs to send emergency aid to seasonal workers without jobs and those whose hours have been drastically cut but who still have some income.

The changes will also allow people who are making up to $1,000 a month to qualify for the Canada Emergency Response Benefit, as well as those whose employment insurance benefits have run out since the start of the calendar year.

The changes begin to address key concerns about who qualifies for the $2,000-a-month benefit, which was quickly put in place earlier this month to deal with the pandemic’s economic fallout.

In the last month, the national economy has contracted sharply as businesses have been ordered closed and Canadians told to stay home.

Preliminary data from Statistics Canada on Wednesday showed economic activity collapsed in March, suggesting the drop could be a record nine per cent.

Some six million people have applied for the help since the middle of March when businesses were ordered closed and workers to stay at home as a public health precaution.

Employment Minister Carla Qualtrough said it was too early to say how many people will apply for the help, or how much it will add to the cost of the $24-billion program.

She said much will rest on how many companies use an upcoming $73 billion wage subsidy program, which will cover up to 75 per cent of employee salaries. The government is expecting companies to take advantage of the program to keep workers tied to an employer, meaning fewer of them would be in receipt of the CERB.

For those doing jobs deemed essential and making less than $2,500 a month, Prime Minister Justin Trudeau said the federal government will top up their pay to encourage them to keep going into work during the health and economic crisis.

He says the government is still weeks away from seriously considering loosening public health restrictions to reopen the domestic economy, something that will be done in phases with some regions and industries starting sooner than others.

The Bank of Canada is warning that the downturn tied to COVID-19 will be the worst on record and that the economic recovery will depend on the effectiveness of current measures to bring the pandemic under control.

The bank announced that it is keeping its key interest rate target on hold at 0.25 per cent, saying that it is effectively as low as it can go to combat the economic impacts of COVID-19.

If conditions improve quickly, the economic shock is likely to be “abrupt and deep, but relatively short-lived” and followed by a strong rebound for most, but not all, sectors of the economy.

A more severe scenario would likely see a “significant number” of businesses closing for good and longer spells of unemployment as workers look for new jobs.

A longer downturn would also mean households, businesses and governments could have higher debt by the time the recovery takes hold.

No matter the scenario, all the possibilities suggest “the near-term downturn will be the sharpest on record,” the report reads.

“The outlook is highly conditional on how long the containment measures remain in place, and how households and firms adapt,” governor Stephen Poloz said in his opening remarks during a morning teleconference.

He added that “substantial monetary stimulus needed to be in place to lay the foundation for the post-containment economic recovery.”

The monetary policy report is the last one Poloz is to be a part of, with his tenure at the head of the central bank scheduled to come to a close on June 2.

He was involved in the first monetary policy report published 25 years ago. Poloz said that he wished the circumstances for his last were “more favourable.”

Watch the prime minister’s full comments below.

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