As the United States Congress debates this week whether to extend the extra $600 per week federal unemployment benefits introduced by the CARES Act beyond its original July end date, Canada is facing in a similar conundrum.
Many Canadian employers are having a hard time rehiring or finding the workers they need to safely reopen amid the COVID-19 pandemic, according to a survey by the Canadian Federation of Independent Business (CFIB).
Only one-third of small companies said they are at normal staffing levels, and one-quarter are having a hard time finding the staff they need to operate.
“Staffing is one of the many challenges for small businesses trying to get back to normal,” said Dan Kelly, CFIB president. “More than a quarter (27%) of small firms report that some of their laid-off staff have refused to return to work when recalled.”
For those employers that have had staff refuse to return to work, the top reasons are:
- They prefer to stay on the Canada Emergency Response Benefit (CERB) (62%)
- They are concerned about their own physical health or that of their family (47%)
- They are concerned about childcare obligations (27%)
- They do not feel there are enough hours or work available (16%)
- They prefer the Canada Emergency Student Benefit (CESB) (11%)
- They are concerned about taking public transportation (7%)
“It is clear that CERB has created a disincentive to return to work for some staff, especially in industries like hospitality and personal services,” Kelly said. “CERB was created as emergency support for workers who had lost their job due to the pandemic, not to fund a summer break. This is why it is critical that all parties support the government's proposed change to end CERB benefits when an employer asks a worker to return to work.”
The CFIB previously called on the federal government to make changes to the federal aid programs, to ensure Canadians can safely transition from CERB to work using the Canada Emergency Wage Subsidy (CEWS) as a step toward unsubsidized employment.
The CERB program was introduced as part of the COVID-19 Economic Response Plan to support businesses hardest hit by the COVID-19 pandemic. The government has previously expanded its coverage to include more workers and extended the program by another eight weeks. To assist moving Canadians from CERB to CEWS and then toward unsubsidized employment, CFIB recommends:
- Allowing more employers to participate in CEWS by removing or reducing the 30% revenue drop test or by creating a sliding scale to allow those with lower revenue drops to access a smaller subsidy.
- Continuing CERB benefits for those who need them, but requiring recipients to be available and looking for work, and ensuring benefits stop if a worker is offered a new job or their old job back unless they or a family member are sick.
- Allowing CERB recipients to earn more while retaining some of their benefits so they are not discouraged from working more hours.
"Many workers can't go back to work yet for valid reasons, but changes are needed to key support programs to help employers reopen and rehire their teams,” Kelly said. “There is no recovery without getting Canadians back to work.”
Prime Minister Justin Trudeau recently announced that the federal government will be extending the CEWS program until December.