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How CERBs has Helped Canadians during the COVID-19 Pandemic

Policy Brief by Anson Shen

The world has just marked the anniversary of the COVID-19 pandemic. Unfortunately, Canada greeted the date with the country's second wave of COVID-19 cases and with the second wave, an increase of emergency aid applicants followed. The COVID-19 pandemic has left many adversities for the global economy and society; yet, the world is merely experiencing the beginning of its effects. Many provinces were forced to temporarily shut down businesses in order to manage the gathering of individuals in public places and this sent the Canadian economy into deep contraction. Stimulus packages have become the main source of income for many individuals in Canada. Since the introduction of Canadian Emergency Response Benefit (CERB), the Federal government has made changes to the CERB to provide emergency aid for those who have lost all or more than 50% of their income, students, seniors, and businesses, to help mitigate the economy’s lack of income. Financial aid has been a major conversation over the past year, and the Canadian government has worked diligently in communicating it’s plans and efforts in mitigating the many issues that the country is facing.

In a report released in the Fall of 2020, Canada was reported to have entered the pandemic with the strongest fiscal position amongst the G7 countries and are still maintaining that position today [1]. As of the end of 2020, the Canadian Federal government has supplied:

  • $270 billion in direct support to Canadians and businesses;

  • Up to $85 billion in tax and customs duty payment deferrals to meet liquidity needs of businesses and households; and

  • The federal government has provided more than 8 out of every ten dollars invested by governments in Canada to fight COVID-19 and support Canadians [2]

The key part to note is that the benefits are considered taxable income. The fiscal policies will allow the government to generate revenue and offset the expenses of the benefit while stimulating the economy.

The success of stimulus packages can be measured by the positive response the stock market received soon after [3]. Keynesian economists argue that government intervention is imperative during dire economic times; therefore, the financial benefits given to individuals are a productive source of economic stimulation. The COVID-19 Emergency Response Act (Bill C-13) enacts the Canada Emergency Response Benefit Act (CERB) to allow individuals who lost a source of income due to COVID-19 to collect income support payments [4]. When the Canadian economy was at a standstill, the CERB provided individuals with the means to support themselves and stimulate the economy. We can look towards the Great Financial Crisis (GFC) for answers and advice as it was another point in history where the economy experienced a major recession. The GFC has taught us that “strong government interventions are needed to prompt economic recovery” [5]. Strong government intervention refers to fiscal policies enacted by Bill C-13 to stimulate purchasing behaviours and in turn raise the economy from a trough. On the other hand, it has been brought to light that stimulus packages can lead to major debt issues; however, studies show that the market will begin to correct itself after government intervention because the market is “consistent with government overreactions and reaction-corrections” [6]. Expansionary fiscal policies have long been believed by Keynesian economists to stimulate an economy in recession; therefore, the increase of government spending and debt will correct itself after the demand is driven up. Not only has the stimulus packages helped stimulate the economy out of a deep contraction, it has helped raise unemployment rates after quarantine periods were over [7].

The Canadian stimulus packages have either directly or indirectly affected Canadians during this pandemic. Currently, eligible Canadians are able to apply for the CRB through CRA for a maximum of 19 periods that provide participants with $1800 for two-week periods. Although the true effects of these welfare benefits cannot be measured at this time, they have truly helped support Canadians and the socio-economic well being of the country. Previous historic events can tell us the importance of stimulus packages for an economy and future events will be able to look at the current Trudeau administration for research and for their efforts in stimulating an economy during a global pandemic.

  1. Canada. Department of Finance. Fall Economic Statement 2020. [Ottawa], 2020. .

  2. Ibid.

  3. Phan, Dinh Hoang Bach and Paresh Kumar Narayan. 2020. “Country Responses and the Reaction of the Stock Market to COVID-19—a Preliminary Exposition.” Emerging Markets Finance and Trade 56, 10. 2138-2150.

  4. Parliament of Canada. 2020. “Bill C-13.” March 25, 2020.

  5. Boin, Arjen, Kathy Brock, Jonathan Craft, John Halligan, Paul ‘t Hart, Jeffrey Roy, Geneviève Tellier, and Lori Turnbull. 2020. “Beyond COVID-19: Five Commentaries on Expert Knowledge, Executive Action, and Accountability in Governance and Public Administration.” Canadian Public Administration 63, 3. 339-368.

  6. Phan, Dinh Hoang Bach and Paresh Kumar Narayan.

  7. Press, Jordan. "Economy blows past expectations, adds 259,000 jobs in February," CTV News, March 12, 2021,

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