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Benefits of the coronavirus pandemic: PBO costs for program extensions

OTTAWA – An extension of both sickness and care benefits next spring – as proposed in Measure C-2 – would cost the government an estimated $873.6 million, Parliament Budgeting Officer (PBO).

New cost reports released Tuesday highlight that extending the Canada Recovery Sickness Benefit (CRSB) by 28 weeks or until May 7, 2022 and extending the claim period from four to six week will come with a price tag of $507 million.

Meanwhile, expanding the Canada Rehabilitation Care Benefit (CRCB) with the same timeframe and claim period from 42 to 44 weeks will cost $366.6 million.

Last week, Deputy Prime Minister and Finance Minister Chrystia Freeland formally introduced a new “targeted” pandemic aid bill, extending some benefits and amending others.

Freeland said she hopes this is the last extension.

“I see this legislation as very much the final step in our COVID-19 assistance programs. That’s what I really hope and really believe is the bottom line,” she said on Nov.

Members of Parliament have begun debating the proposed law – the Liberals hope to pass it before the House of Commons rises on the holiday on December 17.

The PBO has also spent the expected support through the new Tourism and Hospitality Recovery Program and the hardest-hit Business Recovery Program.

The office predicts an additional $676 million in grants will be paid in addition to those already approved. Of that, $134 million is expected to flow through the Tourism and Hospitality Recovery program and $542 to flow through the hardest-hit business recovery program.

“With this extension, we expect the total cost of [Canada Emergency Rent Subsidy] is $8.3 billion. This represents a net cost to the federal government of $7.2 billion after accounting for corporate income tax recoveries,” the report reads.

CRSB provides income support to working and self-employed Canadians who are unable to work because they are sick with COVID-19 or are self-isolating. Eligible applicants can receive $500 in a one-week period.

CRCB provides income support to working and self-employed Canadians who are unable to work because they are caring for a child under the age of 12 or a family member in need of supervised care. Eligible applicants can receive $500 in a one-week period.

The Tourism and Hospitality Recovery Program applies to hotels, tour operators, travel agencies and restaurants with subsidy rates up to 75%, while the Business Recovery Program is disabled. The hardest hit applies to other businesses already facing “wormholes”, with subsidy rates up to 50%.

To qualify for the former, businesses would have to show a 12-month revenue loss of at least 40%, and a similar drop in current-month sales. For the latter case, businesses would have to show a 12-month revenue loss of at least 50%, and a similar decline in current month sales.

The government is also proposing a Canadian Worker Containment Benefit, an alternative to the Universal Response Benefit of Canada. It’s geared toward people whose jobs are directly impacted by the lockdown and will offer $300 a week benefits. PBO does not charge a personal fee for this program.

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