Changes to emergency-relief program coming to expand eligibility, Trudeau says

OTTAWA – More than 300,000 out-of-work Canadians successfully applied for pandemic-related emergency relief in the first few hours after the application process began Monday, and Ottawa says it will soon change the rules to let hundreds of thousands more access the help.

Prime Minister Justin Trudeau did not say how many people have thus far not been approved for the Canada Emergency Response Benefit, which offers $500-a-week payments for workers who have lost all their income during the COVID-19 crisis.

The Liberals were warned last week by experts that the design of the benefit leaves out people whose hours have been slashed, but not eliminated entirely, students who haven’t earned enough to qualify and people who were already seeking jobs before the pandemic, when they saw their options dry up as the economic shock worsened.

Speaking outside his Ottawa residence, Trudeau promised more details on how the government intends to help those whose earnings have plummeted, and those who earn less now than they would if they were receiving the 16-week benefit, citing care workers for the elderly as an example.

“We’re looking carefully at how we can increase their pay a little bit so that they do better off remaining at work rather than going off work and receiving the emergency-response benefit,” he said.

“These are fine-tunings that we knew we would have to do because in any program you’re trying to help as many people as possible, there will be exceptions that we have to fill and we’re going to keep working to make sure we get this right and get everyone the help they need.”

Only people with birthdays in the first three months of the year can apply for the help Monday, with the process opening more widely each day this week. The Canada Revenue Agency, which is running the system, issued a request for patience as it expected large demand for the new benefit the federal government expects to cost $24 billion.

Over the last two-plus weeks, more than 2.5 million people have applied for employment insurance benefits – the same number the system usually sees in a year.

All of them are to be transferred over to the emergency benefit, which will mean a bump in weekly pay for some low-income workers who have been laid off or furloughed – a situation that many didn’t see happening earlier this year, according to a new report from the Bank of Canada.

The survey of consumer expectations released Monday morning said more people anticipated searching for new jobs and expected they would quickly find something new, while fewer thought they would lose their jobs.

Household spending expectations continued to edge up faster than expectations for wage growth, which the bank says suggests by mid-February, consumers weren’t becoming more cautious in their spending.

Results from the business-outlook survey suggest business sentiment had softened in most regions before the pandemic intensified.

Much of that sentiment emanated from the country’s oil-producing regions, where companies were generally less optimistic, pulling back on capital spending and hiring plans as they watched the price of oil fall.

Companies told the central bank they expected the economic shock from low oil prices to be worse than what hit the sector in 2015 and the 2008 economic crisis. As one data point, capital spending was being cut by 30 per cent compared with 2019.

The reason, the bank said, was concern that financing was becoming harder to come by for companies that were also anticipating “a bottoming-out in the sector rather than a negative shock.”

The survey also suggested oil-producing companies foresaw few layoffs because they were already pretty lean operations, unless low oil prices persisted over a longer period.

The belief was the benchmark price for crude, known as West Texas Intermediate, would be between US$30 and US$35 a barrel. The price to start the week was closer to US$28 a barrel.

But oil-field service companies, which employ a large share of the sector’s workforce, reported that “significant staffing reductions were imminent.”

By mid-March, restaurants, hotels and other service industries had seen a collapse in sales, had either closed or expected to soon, and were “drastically laying off staff or reducing staff hours in line with operations.” Others, the bank noted, were moving to food delivery and online sales to find new ways to earn money.

Manufacturers were anticipating temporary shutdowns and declining sales from challenged customers.

Grocery retailers and related transportation companies saw their sales reach “unprecedented levels” as workers were being told to stay at home.

Jordan Press, The Canadian Press