Civil service saw COVID-19 benefit programs as ‘Dunkirk’-style rescue effort

OTTAWA – It was a sunny March 18 when Prime Minister Justin Trudeau presented the government’s first big attempt at containing the economic fallout from COVID-19 in the form of an $82-billion rescue package.

The viral pandemic’s effect in Canada was already bad: Schools were closing, workplaces shutting down, employees being laid off or having their hours cut deeply.

The $82-billion response was immense by any standard. But the jobless numbers would overwhelm it, and they were still rising.

On the Monday before Trudeau spoke, there had been 71,000 claims on the employment-insurance system – surpassing the previous single-day record of 38,000 set during the global financial crisis just over a decade ago.

On the day Trudeau announced the first relief plan, 87,000 claims were filed, almost 10 times the usual daily volume for mid-March.

By Thursday morning, officials overseeing the safety-net program started sensing the magnitude of what was coming. Just processing all the incoming claims in the usual way would take months.

They needed to explain it to a half-dozen senior civil servants in a boardroom and the remainder on videoconference for a regular morning briefing.

“Dunkirk” was the comparison that stuck.

Early in the Second World War in the face of an unexpected attack from Nazi Germany, an Allied army retreated to the French town on the English Channel. An immense sealift saved some 340,000 British, French and other soldiers so they could fight another day.

Rescuing them took hundreds of vessels, including fishing boats and pleasure craft whose civilian crews set out from the south of Britain. Naval officers commandeered riverboats and took them to sea to take part in the mightiest such effort in history.

“Dunkirk.” That was the scale of what was coming, what would be needed. Everyone in the room perked up.

“There was no way we could continue to deliver the EI program the way that it typically is delivered,” said one official in the room, who spoke on the condition of anonymity because they were not authorized to speak publicly about the behind-the-scenes talks.

Within an hour, there were briefings to key ministers and the clerk of the Privy Council, the most senior federal civil servant. By the afternoon, Employment Minister Carla Qualtrough was telling the rest of the cabinet.

The Liberals had promised a benefit for people staying home to care for a child or ill family member, and a second for those who had to go into quarantine or self-isolation. Qualtrough said the multiple programs were already complicated for Canadians to navigate and for the government to explain.

Officials cloistered in meetings starting on Thursday afternoon and lasting into the weekend decided simply to roll everything into a single benefit, especially if an EI recipient was going to get less than the new consolidated benefit, which the Canadian Centre of Policy Alternatives estimated to be 84 per cent of recipients in early April.

Eligibility was set at having earned $5,000 in the previous 12 months, and now having an income of zero as a result of COVID-19. But gaps emerged. Students didn’t have enough earnings to qualify. Nor would people whose hours were slashed but still had some income.

“It wasn’t like a week later we said, ‘Oh, boy, we didn’t realize this.’ In some cases there was a choice, in some cases not so much,” Qualtrough said in an interview. The idea was to spread a broad net at first and then widen it to catch more people.

The core system that delivers EI payments is over 40 years old, having gone through myriad changes over the years. It’s fragile, already in need of replacement, and changing too much about how it works risked a debacle.

Delivering the benefit through EI was out.

By the end of the weekend, the Canada Revenue Agency had been called in to develop a delivery system because it handles millions of tax returns annually. Most Canadians already have tax accounts. Automation was agreed upon to limit manual work that would add to processing and payment times.

At the same time, Employment and Social Development Canada found some 3,000 laptops for employees ordered to work at home – it’s now closer to 7,000 – and boosted department bandwidth to handle thousands of remote users.

(This week, there were 19,500 remote users on the network, keeping the system running mostly from their homes, on top of those who were still in the office.)

By the start of the week after Trudeau made his first announcement, new legislation was being drafted and a budget put in place: spending was going up with one, instead of two, emergency benefits.

All that was left was a launch date for the benefit, and a deadline to deal with the backlog of EI claims: April 6. Applications for the CERB launched that day.

“It all came together, but it was through government doing things very differently, through decision-makers assuming a level of risk that was probably unprecedented,” Qualtrough said.

By the end of March, before the emergency benefit kicked in, the government had about 2.2 million EI claims. Now, there are over seven million people, or more than one-third of the Canadian workforce, on the benefit. The government says they have received about $26 billion.

There have been hiccups:

-Duplicate payments for those who applied for EI and then applied as well for the CERB.

-Pregnant women whose EI files have yet to be migrated over to the CERB and receive their first payments

-Single mothers who can’t qualify for help because the drops they’ve seen in child support payments aren’t counted in the income test.

The first has been fixed and the other two will be, the government says, although the antiquated accounting system makes it more difficult.

There are also hours-long wait times to get through to a special CERB call centre that was set up in nine days, including training 1,500 volunteers from ESDC to man the phones.

“Our officials are doing everything that they can . . . to make sure we are serving Canadians promptly,” Social Development Minister Ahmed Hussen, who is in charge of Service Canada call centres, told a Commons committee Thursday, “but we’re dealing in a context of really unprecedented demand in terms of people calling in.”

Qualtrough said the government is now watching how the $35-billion CERB interacts with a separate $73-billion wage-subsidy program, which funnels money through employers to help keep people on payrolls.

Even though officials considered the interplay between the two programs, Qualtrough said policy details are still being worked out, such as how a worker transitions between programs, and avoiding duplicate payments.

“We knew that these things had to work together. We’re not retroactively saying, ‘Oh crap, we’ve got to make sure these things work together,’” Qualtrough said.

“So right now we’re dealing with the reality of who is not captured, will they be captured elsewhere, who do we still need to capture … and who applies for what.”

Jordan Press, The Canadian Press