No Canadians will be left behind with the extension of the Canada Emergency Response Benefit (CERB). The federal government announced the continuation of the taxable benefit on June 16, 2020. CERB payments will extend for another eight weeks to bring the new total to $12,000.
Recipients who are due to max out their CERBs can re-apply to receive the additional $4,000. The presumption is that your circumstances are the same since your first claim. It means you’re still unemployed or unable to return to work due to the COVID-19 pandemic.
Help through the summer
Yves Giroux, the Parliamentary Budget Officer, estimates the extension to cost $17.9 billion. CERB payments as of June 4, 2020 topped $43.5 billion out of the $60 billion original budget.
By the time the program extension lapses, total government spending for CERB would be around $71.4 billion. The first batch of CERB recipients will run out of financial relief in early July. But with the extension, people will have a lifeline through the summer.
In the new phase, there’s a newly imposed requirement. Eligible (and authentic) claimants must sign an attestation acknowledging the government is encouraging them to look for work. Applicants must also consult with the Canada’s job bank.
The government can only determine the final cost of CERB depending on the take up of the Canada Emergency Wage Subsidy (CEWS). The Trudeau administration is planning to retool CEWS.
During the extension period, the federal government can find other ways to retool CERB too. It can be a retraining program of recipients for other jobs or better job prospects. The recommendations are from a group of experts assembled by the C.D. Howe Institute.
An update of the Employment Insurance (EI) system might be necessary before the expected surge in EI applications in September 2020.
Stability in the pandemic
The coronavirus brought millions of Canadians to the edge of the income cliff. But CERB and other emergency programs will eventually end as the economy reopens. When the situation allows, save an amount equal to the $12,000 CERB then invest. Dividend earnings can provide much-needed stability even in a recession. There are investment choices with shields against market disruptions.
Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) in the infrastructure space is a profitable option for income investors. This $16.6 billion diversified utility company pays a high 4.67% dividend, enough to deliver a passive income of $560.40 from a $12,000 worth of shares.
This company belonging to the Brookfield family operates a mix of assets that generates resilient long-term cash flows. The unique collection of assets includes regulated utilities, ports, toll roads, railroads, and natural gas pipelines as well as technology infrastructure like data centres.
The infrastructure is spread globally and operating in the continents of North America, South America, and Europe plus the Asia Pacific region. The advantage with this stock is that the company derives revenue from regulated utilities and long-term contracts. Assets such as toll roads and ports are irreplaceable.
When the going gets tough again, make sure you have a dependable income provider like Brookfield Infrastructure. You should also know this utility stock has increased dividends for 13 straight years.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners.