Regulations Amending the Canada Recovery Benefits Act: SOR/2021-219

Canada Gazette, Part II, Volume 155, Number 23

Registration
SOR/2021-219 October 22, 2021

CANADA RECOVERY BENEFITS ACT

P.C. 2021-912 October 22, 2021

Her Excellency the Governor General in Council, on the recommendation of the Minister of Employment and Social Development and the Minister of Finance, pursuant to section 24.1 ^{footnote a} of the Canada Recovery Benefits Act ^{footnote 1}, makes the annexed Regulations Amending the Canada Recovery Benefits Act.

Regulations Amending the Canada Recovery Benefits Act

Amendment

1 The Canada Recovery Benefits Act ^{footnote 1} is amended by replacing “October 23, 2021” with “November 20, 2021” in the following provisions:

• (a) the portion of subsection 10(1) before paragraph (a);
• (b) subsection 11(1);
• (c) the portion of subsection 17(1) before paragraph (a); and
• (d) subsection 18(1).
  

Coming into Force

2 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

Since September 27, 2020, many workers who have been unable to work due to COVID-19 have been relying on Employment Insurance (EI) benefits and the recovery benefits — consisting of the Canada Recovery Benefit (CRB), which is available for up to 54 weeks; the Canada Recovery Sickness Benefit (CRSB), which is available for up to 4 weeks; and the Canada Recovery Caregiving Benefit (CRCB), which is available for up to 42 weeks. The recovery benefits are set to end on October 23, 2021.

Economic recovery and labour market conditions are showing improvement with vaccination efforts fully underway ^{footnote 2} and employment regaining pre-pandemic levels. ^{footnote 3} However, the path of the COVID-19 pandemic remains uncertain, and the virus still puts some workers at risk of continuing to need support past October 23, 2021, to manage interruptions in their employment due to quarantine, sickness, and caregiving responsibilities.

The Regulations Amending the Canada Recovery Benefits Act (the Regulations) directly support the Government of Canada’s response to the COVID-19 pandemic and the analytical requirements for cost-benefit analysis have been adjusted to permit a timely and effective response.

Background

The COVID-19 acute respiratory disease is a condition in which affected individuals develop fever, cough and/or difficulty breathing. In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and death. Human-to-human transmission is the main driving force of the current COVID-19 pandemic.

As part of Canada’s COVID-19 Economic Response Plan, the CRB, the CRSB, and the CRCB were introduced through the Canada Recovery Benefits Act to help workers unable to work due to COVID-19 during the period beginning on September 27, 2020, and ending on September 25, 2021 (later extended to October 23, 2021).

The maximum entitlement for the CRB and CRCB was initially set at 26 weeks, while the maximum entitlement for the CRSB was 2 weeks. In March 2021, the CRB and CRCB were extended to 38 weeks and the CRSB, to 4 weeks, through amendments to the Canada Recovery Benefits Regulations.

Budget Implementation Act, 2021, No. 1, which received royal assent on June 29, 2021, amended the Canada Recovery Benefits Act to

• increase entitlement to the CRB by 12 additional weeks, for a maximum of 50 weeks, and increase entitlement to the CRCB by 4 additional weeks, for a maximum of 42 weeks;
• provide the Governor in Council with the authority to extend the period during which the recovery benefits are available from September 25, 2021, to a date no later than November 20, 2021, on the recommendation of the Minister of Employment and Social Development and the Minister of Finance; and
• allow for the Minister of Employment and Social Development to make a benefit payment to avoid a one-week gap for EI exhaustees between their EI and CRB claims, in situations where an EI claimant exhausts their EI benefits at the end of the first week of a two-week CRB period.

The CRB, the CRSB and the CRCB were initially scheduled to end on September 25, 2021. In August 2021, the Regulations Amending the Canada Recovery Benefits Act and the Canada Recovery Benefits Regulations came into force to extend the three recovery benefits until October 23, 2021, which also increased the maximum entitlement under the CRB to 54 weeks of income support.

The CRB supports workers ineligible for EI who, for reasons related to COVID-19, are not employed or self-employed, or had a reduction of at least 50% in their average weekly employment or self-employment income. It provides for up to 54 weeks of income support, which is payable at $500 a week for the first 42 weeks (if claimed for a period starting before July 18, 2021) and payable at $300 per week for any week paid beyond 42 weeks or to all first-time claimants claiming for a period starting on or after July 18, 2021.

The CRSB provides income support to workers who are unable to work at least 50% of the time they would have otherwise worked in the week because they contracted COVID-19 or must self-isolate for reasons related to COVID-19, or have underlying conditions, are undergoing treatments or have contracted other sicknesses that would make them more susceptible to COVID-19. It provides $500 a week, paid on a weekly basis, for a maximum of four weeks.

The CRCB provides income support to employed or self-employed individuals who are unable to work at least 50% of the time they would have otherwise worked in that week because they must care for a child under the age of 12 or a family member who requires supervised care because the school, program or other facility that the child or family member normally attended was unavailable or closed; the child or family member has contracted or might have contracted COVID-19, or is required to self-isolate, or is at risk of serious health complications because of COVID-19. It provides $500 a week, paid on a weekly basis, up to 42 weeks per household.

Objectives

The objectives of these regulations are to

• (1) extend the benefit window for the CRSB and the CRCB to November 20, 2021; and
• (2) ensure that there is no gap in payment for claimants.

Description

The Regulations Amending the Canada Recovery Benefits Act are being made to extend the period during which the CRSB and the CRCB are available from October 23, 2021, to November 20, 2021.

Regulatory development

Consultation

The Regulations respond directly to the continuing and extraordinary economic circumstances posed by the COVID-19 pandemic. The measures set out in the Regulations need to be in place expeditiously to be effective. Consequently, consultations were not undertaken and the Regulations were granted an exemption from prepublication in the Canada Gazette, Part I.

Instrument choice

The Canada Recovery Benefits Act provides the Governor in Council, on the recommendation of the Minister of Employment and Social Development and the Minister of Finance, the authority to extend the periods during which recovery benefits are available to no later than November 20, 2021.

Using existing regulatory authorities is the only feasible method to ensure that the CRSB and CRCB continue to be available to workers after October 23, 2021.

Modern treaty obligations and Indigenous engagement and consultation

An assessment of modern treaty implications on the measures set out in the Regulations was conducted in support of their proposal. There are no implications for modern treaty obligations or Indigenous engagement in these Regulations.

Regulatory analysis

Benefits and costs

The benefits and costs of the Regulations were assessed for the 2021–2022 and 2022–2023 fiscal years. Estimates are presented in 2021 dollars and are discounted to present values using a 7% discount rate.

The extension of the CRSB and CRCB to November 20, 2021, through these Regulations provides critical income support to workers who are unable to work because they are sick or need to self-isolate, or because they must care for their child under 12 years of age or a family member who needs supervised care due to COVID-19. The monetized benefits for workers, which are also the direct costs of these Regulations, are estimated to be $259 million. The Regulations are also expected to provide health benefits. However, these benefits are not quantified in this analysis. The Government of Canada will incur a total cost of $12.1 million to administer the program.

The Regulations directly support the Government of Canada’s response to COVID-19 and the analytical requirements for cost-benefit analysis have been adjusted to permit a timely and effective response.

Baseline scenario

Under the baseline scenario, the current end date for the recovery benefits remains at October 23, 2021, and the maximum number of weeks of entitlement remains unchanged at 4 weeks for the CRSB and 42 weeks for the CRCB. As of September 26, 2021, 684 830 workers have accessed the CRSB and 458 990 workers have accessed the CRCB. Workers will cease to have access to these benefits as of October 24, 2021, under the baseline scenario.

The CRSB allows individuals who have contracted COVID-19 or who are self-isolating due to COVID-19 exposure to stay home from work. The CRCB allows individuals to care for children who need to self-isolate or who are sick, also reducing the risk of exposure to others. In the absence of additional CRCB entitlement, parents may be more likely to send their children to childcare facilities when they should be self-isolating, risking exposure to others.

Regulatory scenario

Under the regulatory scenario, the eligibility period for the recovery benefits is extended from October 23, 2021, to November 20, 2021, and the maximum number of weeks of entitlement remains unchanged at 4 weeks for the CRSB and 42 weeks for the CRCB. The regulatory scenario will result in additional program and operating costs for the Government of Canada. The benefits of the regulatory scenario go beyond the direct income support provided to workers and are expected to result in economic and societal benefits that can be indirectly attributed to extending the end date of the benefits.

If the current trend persists, extending the periods during which the CRSB and the CRCB are available to November 20, 2021, is expected to benefit 114 000 CRSB claimants and 404 000 CRCB claimants.

Costs

The incremental costs of the Regulations are estimated to be $271.1 million (present value). These costs include $259 million for program costs to provide additional income supports to CRCB and CRSB recipients, which will be sourced from the Consolidated Revenue Fund (CRF) in accordance with the Canada Recovery Benefits Act, as well as $12.1 million (present value) in operating costs for the Canada Revenue Agency (CRA).

Program and operating costs

Additional program payments resulting from the Regulations are expected to amount to $259 million. Operating costs to the CRA to administer the additional weeks of benefits under the programs are expected to amount to $12.1 million over fiscal years 2021–2022 to 2022–2023. Incremental administration costs are intended to support a number of functions across the CRA, of which the majority of the effort is focused in the following functions: collections and verifications, and taxpayer service and assistance.

Table 1: Breakdown of program and operating costs

Program	Program costs (present value)	Operating costs (present value)
CRSB	$57 million	$6.4 million
CRCB	$202 million	$5.7 million

All of the program costs will be funded from the CRF.

Productivity costs associated with benefits and leave related to COVID-19

COVID-19 and the subsequent public health measures mean that workers who are unable to work because they are sick or need to self-isolate or care for a family member must stay home to reduce the spread of the virus. During this period, the Government has provided income supports to workers who have been unable to work due to COVID-19. While vaccination efforts are underway and provinces and territories have initiated reopening plans, the fourth wave has created regional outbreaks in some parts of the country.

There are minor expected productivity costs directly associated with the extension of the period during which the CRSB and the CRCB are available to November 20, 2021. Most of the loss of productivity would be attributable to the COVID-19 pandemic and the public health measures put in place rather than to the extended eligibility window of these benefits. However, it is assumed that the extended availability of these benefits will entice some workers to remain at home (for example to take care of a child) rather than go to work and find alternative care options (such as from friends or family members). Similarly, workers may be more likely to stay home when they have mild symptoms of COVID-19 rather than take the chance and go to work where they could potentially spread the virus further. As a result, the long-term health, social, and economic benefits from these measures are likely to outweigh the short-term productivity loss.

Additional costs to federally regulated employers

The Regulations could impose additional incremental costs on federally regulated employers whose employees may prolong or take COVID-19 sickness-related leave or caregiving-related leave (available under the Canada Labour Code) as a result of the extended eligibility window. There is no data on the number of people in the federally regulated private sector who used the CRSB or the CRCB.

Benefits

Recovery benefits additional income support

The extension to November 20, 2021, of the periods during which the CRSB and the CRCB are available ensures continued access to income support, if needed, for workers across Canada who are unable to work because they are sick or must self-isolate due to COVID-19, or who have to take care of a child or family member requiring supervised care who is unable to attend their school or care facility due to COVID-19.

Based on available CRSB and CRCB claimant usage data, it is estimated that over 518 000 recipients would directly benefit from the additional weeks of income support and the extension to November 20, 2021, of the periods during which recovery benefits are available. It is estimated that recipients will receive an additional $259 million in income support as a result of this extension.

Health benefits

The Regulations are also expected to have some public health benefits, particularly related to helping to facilitate improved health outcomes. Modelling suggests that the more contagious and severe Delta variant will remain a serious problem in the fall and winter. Provinces and territories are attributing surges in infections and hospitalization to this variant. Without the extension of eligibility periods for the CRSB and the CRCB, workers who are ill with COVID-19 or required to self-isolate, for example, could be more likely to return to their employment and less likely to self-isolate, increasing the risk of spreading the virus to others. Monetizing the health benefits identified above is difficult, notably in part due to the uncertainties regarding the path of the pandemic and the public health measures that may be introduced or relaxed as a result. However, it is likely that the monetized value of these benefits would be significant.

Environmental benefits

The environmental benefits of the Regulations are negligible.

Indirect economic benefits

The additional income supports to individuals who, because of the need to self-isolate or to care for sick children or family members, are unable to work and would otherwise have no income will provide indirect economic benefits that arise from the spending of these income supports in the economy. This in turn will likely assist with accelerating the economic recovery coming out of the pandemic. In addition, access to the additional income supports could have indirect societal impacts by reducing the risks of homelessness or childhood poverty.

Cost-benefit statement

• Number of years: two years (2021–2022 to 2022–2023)
• Base year for costing: 2021
• Present value base year: 2021–2022
• Discount rate: 7%

Table 2.1: Summary of costs

Description of cost	Amount ($ millions)
Implementation costs to Government	12.1
Program costs to Government	259
Total costs	271.1

Table 2.2: Summary of benefits

Description of benefit	Amount ($ millions)
Additional income supports	259
Total benefits	259

Table 2.3: Summary of costs and benefits

Impacts	Amount ($ millions)
Total costs	271.1
Total benefits	259
Net impact	−12.1

Quantified (non-$) and qualitative impacts

Positive impacts:

• Public health benefits that arise from individuals staying home when sick; therefore, reducing transmissions and fatalities from COVID-19.
• Improved care for children or other family members who are unable to attend their regular school or care facility due to COVID-19.
• Income support for a total estimated 518 000 recipients who are expected to directly benefit from the extension of the CRSB and the CRCB.

Negative impacts:

• Minor reduction in economic productivity due to some CRSB and CRCB recipients delaying their return to work to stay home when sick or care for their children when schools or care facilities are closed.

While only net costs were monetized, it is expected that if the qualitative benefits of this measure were monetized the benefits would exceed the costs.

Small business lens

As of 2019, small businesses (those with fewer than 100 employees or less than $5 million in revenue) employed 8.4 million individuals in Canada, or 68.8% of the total private labour force. ^{footnote 4} These businesses are generally less well equipped to absorb long-term absences of employees when compared to larger businesses and, therefore, could be impacted more by the loss of economic productivity due to the pandemic and the related public health measures and the economic climate.

These Regulations do not provide specific flexibility for small businesses. The extension to November 20, 2021, of the periods during which the CRSB and CRCB are available will not result in additional administrative burden for small businesses.

One-for-one rule

The one-for-one rule does not apply to these Regulations, as there is no incremental administrative burden on businesses.

Regulatory cooperation and alignment

The Regulations do not have implications for international agreements (trade, environmental, human rights, etc.), obligations, or voluntary standards. It is not aimed at minimizing or reducing regulatory differences, nor at increasing regulatory compatibility with another jurisdiction. It does not introduce specific Canadian requirements that differ from existing regulations in other jurisdictions for an international program. It does not seek to enable regulatory alignment with the United States as committed to under the Joint Action Plan for the Canada-United States Regulatory Cooperation Council.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus (GBA+)

The Regulations assist a broad range of workers who are unable to work at least 50% of the time they would have otherwise worked in the week for various reasons related to COVID-19. The Regulations do not target persons of a particular gender or identified group; however, some proportional and differential impacts have been identified using preliminary program data, between September 27, 2020, and July 11, 2021. Applicants for the CRSB and CRCB have been predominately women.

The administrative data contains information, by benefit type, on the number of recipients by week, total weeks of benefits received, 2019 income of recipients, gender, age group, and province of residence; however, the data did not allow for cross tabulations (e.g. gender breakdown by province). In addition, the data does not contain information on industry or type of work. Work is underway to estimate this data by linking with T4 tax data.

Canada Recovery Sickness Benefit

The Canada Recovery Sickness Benefit (CRSB) has been distributed fairly equally between men (52%) and women (48%), and is highest among claimants aged between 25 and 54 years old (67%). The 25 to 54 age group makes up 64% of labour force participants. Men make up 52% of this age group and women represent 48% of this age group. ^{footnote 5} Over half of Canadians report not having access to paid sick leave. That proportion is even higher for low-wage earners. Approximately 37% of CRSB beneficiaries earned less than $20,000 or had no tax filing in 2019 indicating that this benefit may be of particular benefit to low-wage earners.

Canada Recovery Caregiving Benefit

The Canada Recovery Caregiving Benefit (CRCB) targets caregivers and families with children. CRCB beneficiaries are more likely to be women, with 63% of CRCB beneficiaries as of July 2021 ^{footnote 6} being women, and 69% of claimants are between the ages of 25 and 45 years old. As a comparison, men comprise 53% of labour force participants aged 15 and over while women comprise 47%. Some 50% of beneficiaries earned an annual income of less than $20,000 or had no tax filing in 2019. Increasing entitlement to CRCB would benefit low-income workers to a greater degree than the general population as it replaces a greater percentage of their income and based on applicant data to date, women between the ages of 25 and 45 years old.

No data for other identity groups is available at this time.

Table 3: Provincial and territorial breakdown (as of August 29, 2021)

	% of CRSB beneficiaries table 5 note a	% of CRCB beneficiaries table 5 note b	% of labour force
Atlantic	4%	5%	6.1%
Quebec	17%	17%	22.5%
Ontario	37%	41%	39.1%
Manitoba and Saskatchewan	9%	13%	6.5%
Alberta	19%	14%	12.1%
British Columbia	13%	8%	13.7%
Territories	< 1%	1%	N/A
Table 5 note(s) Table 5 note a Detailed data about CRSB applications Return to table 5 note a referrer Table 5 note b Detailed data about CRCB applications Return to table 5 note b referrer

Implementation, compliance and enforcement, and service standards

Implementation, compliance and enforcement

The CRA administers and enforces the recovery benefits programs on behalf of the Minister of Employment and Social Development. The CRA already has the infrastructure in place but changes to the recovery benefits processing system are needed to allow for additional weeks of CRSB and CRCB to be paid.

Existing implementation and enforcement mechanisms contained in the CRA’s adjudication and controls procedures will ensure that these regulatory amendments are implemented properly. These include for instance, functionality to perform client accounting, withholdings, issuance of tax slips to applicants, support for individual eligibility and entitlement tax assessment activities, and support for post-payment compliance and verification activities.

The Regulations come into force upon registration.

Service standards

CRA provides Canadians with a single point of access to a wide range of government services and benefits, including the processing and payment of the Canada Recovery benefits. Existing service standards will continue to apply to the recovery benefits programs.

Contact

Benoit Cadieux
Director
Employment Insurance Policy
Skills and Employment Branch
Employment and Social Development Canada
140 Promenade du Portage, 7th Floor
Gatineau, Quebec
K1A 0J9
Email: benoit.cadieux@hrsdc-rhdcc.gc.ca