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Laid off due to COVID-19? Here’s what you need to know about CERB

6 million people have now applied for CERB after being temporarily laid off due to the spread of COVID-19. 90% of those people have now been processed. The Canada Emergency Response Benefit is propping up many Canadians as the unemployment rate reaches 7.8% . During Canada’s great depression, the unemployment rate was 17%

If you find yourself in this unfortunate situation, we’ll guide you through the Emergency Response Benefit, find out if you should seek legal advice, and offer up some ideas on where else you might find relief during the pandemic.

When to apply for the Canada Emergency Response Benefit (CERB)

Benefits will start within 10 days of submitting your application. There is no waiting period before the money is paid out to you, unless you opt to receive the benefits by cheque, then you’ll wait for the mail delivery. The direct deposit option is much faster.

How to apply for CERB

You can do it online with CRA My Account. Or you can call the automated toll-free line at 1-800-959-2019. In either case, have your social insurance number (SIN) and your postal code ready.

You need to apply and confirm eligibility every 4 weeks.

How the Canada Emergency Response Benefit (CERB) works

If you have recently applied for EI (or are in the midst getting through), the Federal Government is passing legislation for the CERB that will supersede COVID-related EI claims. The CERB is a more accessible combination of Emergency Support Benefit and Emergency Care Benefit.

CERB pays $2,000 per month and lasts up to 4 months. If after that period, you’re still unable to work, know that you’re still eligible for your full EI claim to begin once CERB funds run out. Canadians would begin to receive their CERB payments within 10 days of application. The CERB is paid every four weeks and be available from March 15, 2020 until October 3, 2020.

If your EI application is in process, you will be funnelled into CERB automatically.

The qualification for the Canada Emergency Response Benefit is “any resident of Canada who is 15 years old or older, and who, for 2019 or in the 12-month period preceding the day on which they make an application has a total income of at least $5,000 (from employment or self-employment)”

If you are self-employed, under contract, or temporarily laid off, you can apply. If you’re already receiving EI regular and sickness benefits, you will continue to receive their benefits and should not apply to the CERB until EI has run out.

The portal is open to apply as of April 6th. But, to reduce wait times the government is asking to apply based on your birth month (calendar above).

Sadly, the CERB will not help everyone.  For instance, students who weren’t working before the pandemic are stuck. But, the program was recently updated to allow for seasonal workers and part time workers who make $1000 or less per month.

Find out more about this benefit, here is Canada’s official news release.

If that still doesn’t answer your questions, consider this document outlining the full act.

Check out our comprehensive guide – personal finances during COVID-19

How EI works

Before COVID-19, you could apply for EI benefits after 1 week of unemployment, and there was a 2-week waiting period before the money rolled out. Depending on how long you worked for your employer, you may be eligible for up to 45 weeks of pay

Here’s how EI has changed due to COVID-19

During COVID-19, the federal government eliminated the 1 week of unemployment and the 14 days of waiting. But other rules are still in place. While the application process is simple, many are having a hard time getting EI due to volume. Some are experiencing online difficulties, waiting hours on the phone, or even standing in line. Make sure to get your application in within 4 weeks, though, so try applying online in off-peak hours. The CERB benefit, however, has seen waiting times reduced and payments arrive within a few days. 

How it worked before Canada Emergency Response Benefit

Being laid off vs. temporary layoffs

A temporary layoff can only legally last for a short period. It’s not out of the norm either, think of seasonal workers at landscaping companies that will return to the same company the next year.

As an employee, you have to agree to be temporarily laid off, or it needs to be in your contract. Otherwise, you might want to consult a lawyer but do your research first. You can take a stance that you’ve been terminated and file for severance, but if you like working there, work with your employer to find another possible solution. For instance, yes, your company can tell you when to use your vacation pay. You may not like it, but it’s an option. Know that you have some rights, and there are some provincial differences. Remember, there is a 10% wage subsidy for small businesses your boss might access to help you both out. 

First, at the federal level, the Canada Labour Code allows for temporary layoffs lasting up to 3 months or less. Your employer can extend the duration between 3-6 months if there is a fixed date when you’ll be returning to work. 

For example, under Ontario’s Employment Standards Act, a temporary layoff is “a layoff of not more than 13 weeks in any period of 20 consecutive weeks.” That’s the same in BC, whereas in Alberta, layoffs can’t go for more than 60 days in a 120-day period. Littler, an employment law firm, has put together a useful resource outlining all the provincial differences. 

Where all the federal aid is going and how it might help you

  • $2B to help parents with an extra $300 more per child, on top of the $450 already with the Child Care Benefit (CCB). They also boosted the GST/HST tax credit for low to modest incomes.
  • $2000 per month for Emergency Support Benefit to help the unemployed who don’t qualify for EI.
  • 6 month Canada student loan suspension, interest-free.
  • You don’t have to submit your taxes until June 1st and don’t have to pay them until after August 31st, 2020.
  • More funding for shelters where self-isolation is not possible. 
  • 10% wage subsidy for small businesses to help them support their workers.

What about the federal wage subsidy?

There are two wage subsidies employers can use to help pay their employees during COVID-19. There is a 10% wage subsidy and a 75% wage subsidy, here’s how each of them work.

How the 10% wage subsidy works

The 10% wage subsidy is simple and many payroll companies can add it in as a line item on your paycheque. It lasts from March 18th to June 19th. Each eligible employee can get up to $1,375, up to a maximum of $25,000 per employer. If you’re doing the math, for everyone to max out it’s 18 employees. Large employers divvy up the benefit resulting in each employee getting less.

To qualify, your employer must have a business number, and a CRA payroll program account. Any sole proprietorship, partnership, incorporation, profit, or charity can apply.

How the 75% wage subsidy works

As an employer, your revenue must have dropped by 30% as a direct result of COVID-19. It runs between March 15th and June 6th. It covers 75% of wages, up to a maximum per employee benefit of $847 per week. The employer is responsible to top up the remainder of the paycheque as much as possible.

Say, for example, you’re a server at a restaurant making $800 a week. You can’t work because the restaurant is only offering take away service, resulting in at least a 30% drop in revenue, which is the reason they qualify. If your employer claims the wage subsidy, $600 will come from the government through your employer, the other $200, or 25%, or whatever they can afford, will come directly from your employer as a top up.

You cannot apply for CERB if you are getting the wage subsidy.

Here is the Government of Canada’s website for wage subsidy for more details

Other possible sources of benefits or aid


The federal government asked lenders to allow for mortgage deferrals. If you own a home and are in a tight situation, it’s worth it to speak with your bank or lender. While it’s not yet clear how each bank will handle deferrals, there are other solutions, such as skip a payment or using your home equity (if you have one), that may already be in your mortgage contract.

Read our blog,“COVID-19 and your mortgage”


Currently, no specific aid is available for renters. If you still need to come up with rent April 1st, speak with your landlord. While they might not need the mortgage deferral, maybe they can use it to help you. Another option to ask your landlord is to use your last month’s rent you may have paid when you first moved in. Alternatively, look for other solutions like deferring your own payments.

Know that many provinces have instituted an eviction freeze, use it as a last resort.

Read our blog,“Renting and COVID-19”

Look to your savings and investments

It’s situations like these that we look to our emergency fund with 3-6 months of pay inside it.But, It’s not always easy to have one, especially if you’re living paycheck to paycheck. But, maybe you have a TFSA you could pull from to pay for a few months worth of expenses. Withdrawing from your RRSP incurs substantial penalties. For instance, if you withdraw up to $5,000, you’ll pay a 10% withholding tax, or $500 on $5,000. It keeps going up. Between $5,001 and $10,000 the rate is 20%, and for more than $15,000, the rate is 30%. If you live in Quebec, these rates are halved – 5%, 10%, and 15%. 


The government pushed back the submission and payment deadline to help those who would owe on their taxes. Many Canadians get a refund. If you qualify for a refund, you don’t have to wait to submit your taxes.


Stay at home, right? Get outside to walk or bike (a safe 2m apart), but use the money you’re saving not commuting for essentials like food and rent. Gas prices are at an all-time low, you’re not paying for extra parking but beware of cancelling or putting your car insurance on hold. The potential return isn’t worth the risk.

Read our blog,“Can you put your car insurance on hold?”

Credit cards

On top of the mortgage deferrals, the bankers association also mentioned, “the opportunity for relief on other credit products.” We don’t yet know that that means, but we could speculate about payment plans or reducing interest rates. Right now, some credit card providers (like BMO) are offering payment deferrals, so check in with your provider with what to do. 

You do have the option to use your travel points to pay off a portion of your balance, but your points may be worth over 30% less, but it’s better than missing the minimum payment.  If you’re planning on using a credit card, it’s volatile territory and should be used as a last resort. Using a low-interest rate credit card could at least subdue some interest charges if you think you’ll carry a balance. It might be the time to stick to debit to avoid accruing interest. 

Read our blog,“Credit card payment deferrals: your options”

Quick ways to cut back on spending under quarantine

  • Call your cell phone and internet provider and ask for a cheaper plan or payment deferrals
  • Call your utility companies and ask if there are programs to help you out.
  • Pause your Netflix, many Canadian networks have their content online for you to watch.
  • Turn your Spotify into a free account (with ads), and review other subscription services.
  • Libby, by Overdrive, is an excellent app for ebooks to borrow from libraries across the country
  • Call your car loan company, some automakers are offering reliefto buyers
  • Stay home – it’s the motto of COVID-19, so live it. Prepare your meals at home.
  • Use discount codes and coupons. Apps like Flipp are great.
  • Only buy what you need.
  • Read more, How to spend smart and avoid stress shopping through COVID-19

The bottom line

You can ask your friends and family for some financial support, but they might also find themselves in a similar situation. This, too, shall pass, but your mental health will feel its effects, so try to make time for yourself in this challenging time. The government may announce more benefits, and we’ll update this post when they do.