How Ottawa pressed the provinces not to claw back pandemic benefits

Federal Employment Minister Carla Qualtrough.

It took federal Employment Minister Carla Qualtrough an agonizing 19 days to inform the public that she wanted Canada’s Emergency Response Benefit (CERB) to be exempt from clawbacks under provincial and territorial social assistance and disability support programs.

She did not make the announcement on television. In fact, she didn’t make it at all. It was made through her spokesman to the Toronto Star on April 13.

Some of us had been asking for this for more than two weeks and now it’s time to start asking the hard questions:

Why the wait? Why did they not say this at the time? Why the silence from the Prime Minister? And why did the minister not make the statement herself?

After all, this is federal money meant to go to the people who are eligible for it. It is not being made available to help provinces and territories balance their books on the backs of Canada’s poorest people.

So how are we to understand the lack of moral suasion with the provinces and territories?

The first place to look is the pedigree of the CERB payment itself. It is an offshoot of Employment Insurance and an earnings replacement program. Traditionally such programs are deducted dollar for dollar from social assistance programs.

But on April 2, just eight days after the CERB was introduced, the B.C. government stepped away from these traditional clawback polices as they correctly determined that the purpose of CERB was to help people stay safe, not just to replace earnings.


B.C. went it alone but the expected gush of congratulation from Ottawa simply did not follow.

The silence was deafening. Another week passed, an eternity in politics, until the government of Newfoundland made a public announcement that the CERB would be clawed back.

It issued a statement saying people wouldn’t be allowed to receive both provincial income support and the CERB at the same time.

Then the floodgates opened. News reports and government announcements from Manitoba, Yukon, the Northwest Territories, Nova Scotia, P.E.I. and Alberta followed suit. It seemed the die had been cast.

But Ontario had yet to make a move by the time Qualtrough’s office issued its statement. And then everything changed.

The Ontario Minister, Todd Smith, wanted to talk to Qualtrough to understand her position better. A week later, on April 20, Smith announced the CERB would be treated in the same way as earnings with a generous exemption that would allow recipients to receive more than half of the CERB without clawback.

For good measure, he announced that clawed-back funds would be reinvested in social assistance and no one would be cut off.

Then something curious happened late in the week of April 20. Both Alberta and Manitoba announced they would adopt the same policy as Ontario and apply their earnings exemptions to the CERB. Manitoba even announced it would not cut anyone off assistance during the crisis.

Now the pressure is on the other provinces and don’t think for a moment they aren’t feeling the pressure mount when three conservative and one NDP province, representing over two-thirds of Canada’s population, are fully or partially exempting the CERB.

But what turned the tide? It’s clear it was Qualtrough’s statement.

For many, this answer will be inadequate. But for those who believe that moral suasion and direction on the part of federal ministers does not work, there is overwhelming evidence that it does. Especially when it comes to social assistance clawbacks.

Former Liberal minister Monique Begin used it twice on child benefits and seniors’ benefits in the 1970s and 1980s. Another Liberal, Ken Dryden, used it three times with the Canada Learning Bond, education grants and RESPs in 2004 and 2005. Conservative Jim Flaherty used it twice with the Working Income Tax Benefit and the Registered Disability Savings Plan in 2007 and 2008.


Seven instances of federal moral suasion resulted in seven successes.


Minister Qualtrough is in the process of making it number eight.

John Stapleton is Innovations Fellow at the Metcalf Foundation and a former social assistance policy analyst with the Ontario government.

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