Canadian Manufacturing

Extending pandemic measure designed to avoid layoffs will cost federal treasury $600M: PBO

The extra spending will cover a one-year extension for provisions to make it easier to access the work-sharing program that provides an employment insurance top-up to workers who reduce their hours to avoid layoffs.

July 8, 2021  The Canadian Press

The parliamentary budget officer says extending a pandemic measure designed to avoid layoffs at companies will cost the federal treasury almost $600 million over three years.

Most of the extra spending, about $404 million, will take place in this fiscal year under the costing estimate the budget office put out on Jul. 8, with $174 million next year and a final $15 million the year after that.

The extra spending will cover a one-year extension for provisions to make it easier to access the work-sharing program that provides an employment insurance top-up to workers who reduce their hours to avoid layoffs.

The extension will mean that work-sharing arrangements at a company can last up to 76 weeks from the pre-pandemic maximum of 38, not requiring a “cooling off” period between times that companies and workers can access the program, and expanding eligibility criteria.

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Budget officer Yves Giroux’s report says the decision will push the cost of benefits this year to $882 million, instead of $512 million, and the three-year total to nearly $1.2 billion rather than $643 million.

But the budget office notes the numbers could shift depending on how long it takes the labour market to recover from last year’s historic plunge in jobs.