Corbella: New EI program will be a disaster for Canada and our youth

Deputy Prime Minister and Minister of Finance Chrystia Freeland responds to a question during a news conference Thursday, Aug. 20, 2020 in Ottawa.

When Dan Kelly was in Grade 9 back in 1983, the now-president of the

Canadian Federation of Independent Business

 worked three hours every Friday night washing dishes at a Winnipeg

pizza restaurant.

Changes announced Thursday by Canada’s new Finance Minister Chrystia Freeland and Minister of Employment Carla Qualtrough would make young workers — similar to Kelly all those years ago — eligible to collect Employment Insurance benefits for six months after only working 120 hours, or 40 Friday nights in Kelly’s case.

The ministers also announced that they were e

xtending the Canada Emergency Response Benefit (CERB)

for four more weeks to give government time to revamp the Employment Insurance program to allow more Canadians to receive financial aid during COVID-19.

“Every day I hear from worried business owners that they’re having troubles competing with the CERB to get workers,” said Kelly, whose organization represents small business owners who employ 60 per cent of working Canadians.

“But the EI changes that they’re making, in fact, make it even more worrisome in some respects because they’re lowering the bar to only 120 hours of work to collect a minimum of $400 a week for 26 weeks. That’s just three weeks of work to collect six months of EI!”

Kelly says his part-time job at the Boston Pizza franchise “would have qualified me now to get $10,000 in benefits by refusing to work.”

Or, imagine someone working for $15 an hour for 120 hours who would make $1,800. What incentive will they have to continue working if they can collect $10,000 over the next six months? Very little, says Kelly.

You don’t have to be a renowned economist to recognize the dangers to society and the negative effect to the country’s bottom line this plan could cause, but let’s consult with one anyway.

Jack Mintz,

President’s Fellow of the School of Public Policy at the University of Calgary

, called the changes “really, really bad policy,” with all kinds of “disastrous” unintended consequences.

“The federal Liberals do not care about how much anything costs and it shows,” said Mintz, who was reached in Toronto.

Mintz points to the controversial $543.5 million Canada Student Service Grant program that was to be administered by WE Charity, initially announced to be a $912 million program, before it collapsed under a cloud of scandal and conflict-of-interest allegations against Prime Minister Justin Trudeau and Bill Morneau, who

resigned Monday

as federal finance minister.

“They were already giving students $8 billion. Why did they have to create another billion dollar program?” asks Mintz.

Conservative Party Finance Critic Pierre Poilievre has a theory shared by many. He says it was created so Trudeau could help out his friends at the WE Charity — which was in financial trouble — so they could keep

hiring his mother and brother

to speak at their events, where they made $500,000 in pay and expenses over four years for very little work.

“When you make it too easy, it’s not good for society,” says Mintz. “Maybe this is their way of moving towards a guaranteed annual income.”

 Dan Kelly, president of the Canadian Federation of Independent Business.

Mintz points out that the “CERB doesn’t discriminate between full and part-time work. So I could be working 10 hours a week and I get the same payment — $2,000 a month — as someone who was working full time. No wonder people don’t want to go back to work.”

Mintz says he has heard from numerous business owners that some of their employees are indicating they’ll only go back to work until their pay reaches $995 in any given month so they can keep on receiving the CERB — which stops being paid to people who make more than $1,000 per month.

“People forget, we’re going to have deficits next year and the year after and people do not realize the hole that we are digging and the fact that we are going to be making economic recovery that much harder to do with the way things are going right now,” says Mintz


Christian Thomas, a 23-year-old who works for a chartered bank in Toronto (and, for the purposes of full disclosure, a friend of one of my sons), says he was getting twice weekly physiotherapy sessions via Skype for a strained MCL in his right knee when towards the end of May his physiotherapist asked him to delay paying his bill for five days.

Thomas asked why, and the physiotherapist said because it would put him over the $1,000 he’s allowed to earn in order to continue collecting the CERB.

Thomas says he was sympathetic at first, since he knows the therapist was not working as much as usual, as a result of government-mandated COVID-19 restrictions. But since then, he’s heard troubling stories about people gaming the system to collect the CERB while working just enough before hitting the CERB cutoff. He’s heard stories of people collecting the CERB while in Bermuda and others working just enough and then calling in sick, so they can keep collecting the CERB.

Mintz also says he’s heard from numerous business owners that they’re working 12-hour days in their coffee shop or other small business because they can’t find people willing to work, thanks to the CERB.

Freeland says changes are coming so that people can keep more of their benefits even while they’re working, eliminating the earnings cliff created under CERB that acted as a disincentive to work.

Thomas says he recognizes that some kind of an emergency payment was essential but he’s concerned about how the CERB was structured and the changes to EI that are coming down the pipe, not just for the country as a whole but for individuals missing out on valuable work experience.

“I’m concerned about the losses of productivity and motivation for young people right now,” says Thomas, a commerce grad from Dalhousie University in Halifax. “I don’t want my generation to get comfortable on EI and get caught in a rut…A lot of people my age are returning home, living with their parents and living rent free while collecting $2,000 a month.

“I think a lot of people are wasting a lot of time right now sitting on the couch playing video games rather than getting valuable work experience and contributing to the productivity of the country and, of course, I worry about Canada’s accumulating debt.”

Thursday’s announcements are expected to cost an additional $37 billion with an annual deficit expected to hit more than $343 billion.

As for Kelly, he says the lessons he learned all those years ago earning $3.33 an hour have helped him throughout his life and he wouldn’t trade it for anything. Sadly, this new EI program is causing others to do just that.

Licia Corbella is a Postmedia columnist in Calgary. [email protected]

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