Rectifying the unintended impacts of pandemic benefits

At the start of the pandemic, the federal government acted quickly to roll out the Canada Emergency Response Benefit (CERB), creating a financial floor for 8.9 million people impacted by earnings or job losses. The subsequent Canada Recovery Benefit (CRB) and Canada Workers Lockdown Benefit (CWLB) have continued to support people who have lost income because of the pandemic.

Considering the expediency with which these benefits were designed, there were bound to be unintended consequences. Indeed, CERB/CRB debt and clawbacks of vital income supports are causing enormous financial stress to low- and moderate-income Canadians who have borne the economic brunt of the pandemic.

In our November 2021 newsletter, we outlined the serious issues facing low-income seniors whose Guaranteed Income Supplement (GIS) payments were clawed back or who lost eligibility for the program entirely.

Since then, the federal government has announced one-time payments for these seniors and has introduced legislation to exclude income from pandemic benefits for GIS calculations. One-time payments will also go to students who mistakenly applied for the CERB instead of the Canada Emergency Student Benefit.

This will go a long way to rectify the problems faced by seniors and students but doesn’t help the hundreds of thousands of low- and moderate-income Canadians who have been asked to repay up to $19,000 in CERB income (and will soon be asked to repay CRB). Nor does it help those whose refundable tax credits, such as the Canada Child Benefit and Canada Workers Benefit, have been clawed back, despite no longer receiving pandemic support.

Prosper Canada will continue to advocate for the federal government to ensure that financially vulnerable people are not plunged into deeper hardship by:

• Implementing a graduated CERB/CRB debt relief program
• Announcing that it will not seek CERB/CRB repayment from people on social assistance
• Refraining from sending out repayment letters until a debt relief program is in place
• Ensuring CRB/CWLB are not clawed back from federal refundable tax credits
• Issuing a one-time payment to people whose refundable tax credits were clawed back because of CERB.

We invite other civil society organizations and concerned Canadians to join us in pushing for these urgently needed solutions and, to this end, we are sharing our briefing notes publicly. We encourage you to contact your MP today to ask what they are doing to ensure low-income Canadians do not need to repay CERB and that vital income from refundable tax credits is no longer clawed back.

To find your MP, visit: https://www.ourcommons.ca/members/en