Over the past week, the Canadian government has announced changes to existing income support programs as well as new initiatives to assist Canadian businesses and workers impacted by the COVID-19 pandemic. Notably, the federal government has expanded the availability of employment insurance (EI) sickness benefits, temporarily lifted certain rules relating to the Work-Sharing Program, introduced two new emergency income support programs for workers, and created a wage subsidy program for small businesses.
EI Sickness Benefits
EI Sickness Benefits provide financial support to eligible workers who are unable to work for medical reasons. Eligible employees receive 55 percent of their insurable earnings to a maximum of $573 per week for up to 15 weeks. The federal government has introduced the following changes to expand the availability of EI Sickness Benefits in light of the COVID-19 pandemic:
- Waiting Periods. Normally, there is a one-week waiting period for EI Sickness Benefits during which a claimant would not receive pay. As confirmed in our recent Comment entitled COVID-19 Impact: Avoiding Constructive Dismissal Claims, the federal government has waived the one-week waiting period for new claimants in imposed quarantine or who have been directed to self-isolate so they can be paid for the first week of their claim.
- Medical Certificates. Claims for EI Sickness Benefits must ordinarily be supported by a medical certificate signed by a qualified medical professional. The federal government has waived the requirement for a medical certificate during the quarantine period.
The Work-Sharing Program is designed to help eligible employers avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. Employees agree to work a reduced schedule by sharing the available work for the duration of the work-sharing agreement and receive EI benefits as income support. The federal government has implemented the following temporary measures relating to the Work-Sharing Program to support employers and employees affected by the downturn in business caused by COVID-19:
- Duration of Work-Sharing Program. A work-sharing agreement must have a minimum duration of six weeks and, as a result of COVID-19, may last up to 76 weeks (normally the maximum duration is 38 weeks).
- Waiting Period. Employers must normally serve a waiting period equal to the number of weeks of the previous work-sharing agreement, up to a maximum of 38 weeks, before they are eligible to begin a new work-sharing agreement involving the same employees. The government has waived the mandatory waiting period so that employers with a recently expired agreement may immediately apply for a new agreement. Note that although the waiting period between work-sharing agreements has been waived, employers are still required to apply for a work-sharing agreement at least 30 days in advance of the requested start date of the work-sharing agreement.
- Recovery Plan. A recovery plan, outlining the steps an employer will take during the period of the work-sharing agreement to alleviate the work shortage and return the work-sharing unit to normal working hours, must be submitted with all work-sharing applications. The government has advised that it will ease the recovery plan requirements for the duration of the work-sharing agreement.
Emergency Care Benefit and Emergency Support Benefit
The federal government has introduced a new Emergency Care Benefit, providing workers with up to $900 every two weeks for up to 15 weeks if they must stay home and do not have access to paid sick leave. This benefit will be administered through the Canada Revenue Agency (CRA) and provide income support to the following groups:
- Workers (including self-employed workers) who are quarantined or sick with COVID-19 or who have been directed to self-isolate but do not qualify for EI Sickness Benefits.
- Workers (including self-employed workers) who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not quality for EI Sickness Benefits.
- EI-eligible and non-EI-eligible working parents who must stay home without pay because of children who are sick or who need additional care because of school closures.
This is the first time the federal government has extended an income support program of this nature to self-employed workers.
For Canadians who lose their jobs or face reduced hours as a result of COVID-19 and are not eligible for EI, the federal government is also introducing an Emergency Support Benefit to be delivered through the CRA. The monetary amount that workers will receive through the Emergency Support Benefit has not yet been disclosed, but the government has advised that it is investing up to $5 billion into the program.
Applications for the Emergency Care and Emergency Support Benefits will open in April 2020. Canadians may apply for benefits through their CRA MyAccount or My Service Canada Account or by calling a toll-free number that has not yet been made public.
Wage Subsidy Program
To support small businesses facing revenue losses and to help prevent job losses, the federal government will provide a temporary wage subsidy for a period of 90 days. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Employers that will be eligible to participate in the wage subsidy program will include corporations eligible for the small business deduction as well as non-profit organizations and charities.
The Employment & Labour Group at Cassels will provide further updates on governmental initiatives to support Canadian employers and their employees in the wake of the COVID-19 pandemic as they become available.