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Is CERB Coming to an End? 1 Big Change That Could Impact the Future of the CRA’s $2,000/Month Payments

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The Canada Emergency Response Benefit (CERB) was extended last month by the government for another two months. Eligible recipients can receive up to $12,000 in CERB payments, which covers 24 weeks. However, there’s another big change that was recently announced and that could be a sign that the CERB may be coming to an end.

On July 13, Prime Minister Justin Trudeau announced an extension to the Canada Emergency Wage Subsidy (CEWS) that will see the program continue until at least December. It was previously extended back in May to go until August 29. The program provides eligible businesses with funding for up to 75% of their employee wages.

Why does this matter?

What’s notable about the CEWS extension is that it goes far beyond the CERB extension — which goes until October 3. Both the CERB and CEWS extensions come, as there’s growing pressure from the Conservatives and from businesses to make changes to CERB.

There are concerns there’s no incentive for people to go back to work while they’re collecting CERB. It’s inevitable that a change is coming, and by extending the CEWS longer than the CERB, it’s clear the government isn’t ready to make the same commitment to CERB. The two-month extension could be a way for the government to buy time to figure out what to do next.

Finance Minister Bill Morneau recently said that “we need to reduce disincentives to growth” and that “we need to make sure the subsidy is appropriate for the challenges facing enterprises in actually rehiring and getting people back to work.”

As companies learn more about CEWS and make use of it, that could help get people back to work and decrease the number of CERB recipients. The hope is that people transition away from CERB and that at least if employers are benefitting from CEWS, that means people are working.

Conservative leader Andrew Scheer has proposed a different incentive to get people working, called the “Back-to-Work Bonus,” which would allow people who make between $1,000 and $5,000 a month to receive $0.50 for every dollar that they earn that’s above $1,000.

If you’re collecting CERB, you should be preparing for the inevitability that it’ll end soon. One way to keep the money coming in without relying on CERB is by investing.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski has no position in any of the stocks mentioned.

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