Special Report: The End of the CERB

Canada is transitioning away from the Canada Emergency Response Benefit (CERB) and towards two new pillars of support to ease the economic disruption caused by the pandemic. Pillar 1 includes three pared-down “recovery” benefits and Pillar 2 focuses on a new “Simplified” Employment Insurance regime. The CERB has been extended by another four weeks but will end on September 26. 

These announcements made late on August 20 have already stirred controversy, as the new EI benefits will require only 120 qualifying work hours – just 3.2 weeks - for recipients to receive up to 26 weeks of benefits. 

The new Canada Recovery Benefit, on the other hand, features a hefty 50% clawback when net income exceeds $38,000. We’ll share an example of a taxpayer who could experience marginal tax rates as high as 87%; which makes RRSP planning a critical year end strategy for low- and middle-income earners this year.

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