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Why Do Provinces Often Confiscate Federal Benefits From People Who Clearly Need Them?

By Laurie MonsebraatenSocial Justice Reporter
Toronto Star, May 22, 2020

Amanda Demerse lost her part-time job as a rink attendant with the City of North Bay in March when the municipality closed recreation facilities due to the COVID-19 pandemic.

What happened next, amid a global health emergency, is an example of what goes on every day for vulnerable people living on the fault lines of creaking federal and provincial income support systems, social policy experts say.

Since Demerse is on provincial social assistance, she is required to apply for Employment Insurance (EI), a federal benefit that Ontario and most other provinces claw back dollar for dollar.

But millions of other Canadians thrown out of work when the country went into lockdown applied for EI, too, quickly crashing the cumbersome system and prompting Ottawa to introduce a temporary emergency benefit to keep people financially afloat while ordered to stay at home to prevent spreading the virus.

Ottawa said those, such as Demerse, who applied for EI and lost their jobs on March 15 or later, would be transferred automatically to the Canada Emergency Response Benefit (CERB). The emergency federal benefit pays $2,000 a month for four months to those out of work or making less than $1,000 due to the pandemic and who have earned at least $5,000 in the past year.

To date, some 7.8 million Canadian workers have applied for the CERB, including as many as 75,000 Ontarians on social assistance who lost part-time jobs.

In April, Carla Qualtrough, Minister for Employment, Workforce Development and Disability Inclusion, urged provinces to exempt the emergency federal benefit from social assistance clawbacks “to ensure vulnerable Canadians do not fall behind.”

B.C., Yukon and the Northwest Territories obliged.

Ontario, Alberta, Manitoba and Quebec agreed to partial clawbacks.

The rest of the provinces ignored Qualtrough; they claw back the entire amount.

Under a temporary measure introduced by Doug Ford’s Ontario government last month, laid-off workers on social assistance are able to keep $1,100 of the CERB on top of their provincial welfare benefits.

But due to an EI reporting anomaly the last shift Demerse worked was March 8. Ottawa never transferred her application to the CERB.

And because Demerse is on social assistance and receiving EI, she is allowed to keep nothing.

Demerse, 31, who has an intellectual disability and is unable to work full-time, relies on Ontario Disability Support Program (ODSP) benefits to supplement her part-time wages.

Without those wages, she is struggling to make ends meet, said her father Johnny, who is his daughter’s financial guardian.

“She lost her job because of COVID,” he said in an interview. “She should be on CERB like everybody else. It’s craziness that they put her on EI where she can’t keep any of it.”

The North Bay woman’s circumstances form just one example of the many cracks in federal and provincial emergency support systems for vulnerable Canadians laid bare by the coronavirus crisis, experts say.

As governments turn their focus to reopening the economy, it will be important to deal with the “tectonic plates” of federal and provincial income support that too often collide with one another and cause “earthquakes” for vulnerable people, they say.

A spokesperson for Qualtrough, said Ottawa has expanded eligibility for the CERB to include workers who have exhausted their EI benefits since Dec. 29, 2019.

But, in an email exchange with the Star, Marielle Hossack was silent on whether laid-off workers such as Demerse would be allowed to transfer to CERB before their EI benefits run out.

Toronto social policy expert John Stapleton says Ottawa’s silence on cases such as that of Demerse is disappointing, but not surprising.

“The easiest thing would be for Minister Qualtrough to deem EI as CERB for anyone who has lost their job to the pandemic,” said Stapleton, a former provincial social services bureaucrat.

“Now that CERB is in place and is a replacement for EI, why would Ottawa not offer the same break to people receiving EI who were unlucky enough to have their jobs end earlier but who need to self-isolate in the same way?”

This begs the question why provinces, which treat social assistance as a program of last resort, continue to claw back federal supports from people who are clearly in need, Stapleton said.

Maximum monthly benefits for Demerse and others receiving ODSP are $1,169, and just $733 for people without disabilities, amounts that fall as much as 60 per cent below the poverty line.

“Why do we continue having a destitution-model social assistance system?” Stapleton asked.

“Why is it that as soon as you start to dig yourself out, the government takes everything away from you?

“It’s high time this was changed,” he said.

Demerse is among 884 people on social assistance who reported EI benefits in April, according to provincial officials. Treating these workers the same as those receiving CERB on a temporary basis ? would not be costly for the province, Stapleton said.

“But EI is only one of the tectonic plates of federal and provincial income support,” Stapleton said.

“If we exempt EI, why not CPP-Disability, veterans’ benefits, workers’ compensation and other income-replacement programs? Why would you not offer this same break to people receiving those benefits?” he asked.

The reason is likely cost and equity.

Taken together, as many as 52,000 people on social assistance receive federal and provincial benefits that are subject to complete clawbacks, Stapleton estimated.

Those clawbacks poured about $34 million into provincial coffers in April, said Palmer Lockridge, a spokesperson for Ontario’s ministry of children, community and social services.

Ontario isn’t ready to give any of that money back to people such as Demerse by treating EI the same as CERB during the pandemic.

Lockridge suggested it was up to Ottawa to transfer the North Bay woman’s EI onto the CERB.

“Given the intent of the (CERB), we encourage the federal government to show flexibility so the people who need it can access it,” he said in an email.

Reducing social assistance clawbacks for all federal and provincial income replacement programs was a key recommendation of a 2017 expert panel report on income security reform. The report also recommended boosting social assistance by up to 22 per cent within three years, with a goal of allowing people to reach the poverty line by 2027 through a combination of federal and provincial income supports.

But that report, commissioned by the previous Liberal government, was scrapped when Doug Ford’s Progressive Conservatives were elected in 2018.

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