Katherine Gustafson is an author and personal finance expert from Portland, Oregon. She writes about investing for Wealthsimple as well as having written for Forbes, Business Insider, TechCrunch, and LendingTree. Katherine is a past recipient of the Izzy Award for outstanding achievement in independent media. She has a BA from Amherst College and an MA from Boston University.
The COVID-19 pandemic has upended many aspects of economic and social life, including employment. Canada’s economy shed almost 2 million jobs in April 2020. Throughout the following summer, many were struggling to find work or make enough to sustain themselves.
Students and those graduating from college in 2020 could be excused for being concerned about their prospects. Many were unable to work or to find suitable or well-paying work for pandemic-related reasons. For these individuals, help was available in the form of the Canada Emergency Student Benefit (CESB).
Read on to learn everything you need to know about this benefit program that helped students and recent graduates get through a challenging year, as well as what the critics had to say about it.
What is the Canada Emergency Student Benefit?
The CESB is a government program that offered emergency financial aid to students and recent graduates who couldn’t work or couldn’t find work during 2020 for reasons related to COVID-19. Those who were working but whose paychecks were less than $1,000 before taxes over a four-week period were also eligible to receive the relief. The program closed on September 30, 2020.
Who was eligible for the CESB?
Students of any age, including those studying abroad, were eligible to receive aid under the CESB. Applicants had to attest that they were facing one of the following three conditions due to COVID-19:
They were unable to work
They were looking for work but couldn’t find any
They were working but didn’t make more than $1,000 (before taxes) in the four-week period for which they applied
Those looking for work or facing low earnings could keep reapplying for more aid during each CESB period in which they were eligible. Those who were looking for a job had to keep actively seeking work to remain eligible. The Canada Revenue Agency (CRA) reserved the right to seek detailed information from applicants to verify that they had been looking for work during each period for which they were applying.
Three types of students were eligible for CESB:
Students enrolled in a post-secondary education program full- or part-time, or in a summer program
Students who graduated from or ended their post-secondary studies in December 2019 or later
Students who completed high school in 2020 and applied for a post-secondary educational program that began before February 1, 2021
Eligible post-secondary programs were those that constitute a series of courses that last at least 12 weeks and lead to a degree, diploma, or certificate. The program had to be at an institution listed on the Government of Canada’s Master List of Designated Educational Institutions or the Master List of Certified Educational Institutions, or Quebec’s Répertoire des Établissements d’enseignement et des Programmes d’études; or be an Indigenous Institution recognized by a province or territory.
Students who were receiving the Canada Emergency Response Benefit (CERB) or Employment Insurance benefits during the same eligibility period were not eligible for CESB benefits. Others who were not eligible were international students, temporary workers who have a SIN beginning with “9”, and non-resident students with international tax numbers.
What was the benefit?
Eligible applicants could receive $1,250 per month in aid from the CESB. Those with dependents or a disability could also receive an additional $750 per month, for a total of up to $2,000 per month. In order to get the extra $750 per month, applicants had to attest to either having a disability or supporting a dependent.
For the purposes of eligibility, a disability could be an impairment of physical, mental, intellectual, cognitive, learning, communication, or sensory nature. Or it could be a limitation that prevented the person’s full and equal participation in society, whether that limitation is intermittent or ongoing, and whether it is discernible to others.
For the purposes of eligibility, a dependent was classified as a child under 12—including a biological child, adopted child, stepchild, or foster child—or a person with a disability who is wholly dependent on the applicant and/or the applicant’s spouse or common-law partner.
How did it work?
CESB was available to applicants for four four-week periods, from May 2020 through August 2020. Students who missed those windows could retroactively apply until September 30, 2020, when the program closed.
Applicants could receive the CESB benefit during one four-week period at a time. Students had to reapply for each four-week period for as long as they were eligible and had to continue to attest to being eligible to continue receiving benefits.
Students did not have to submit documentation as part of their application, but they were advised to have documents to support their eligibility ready to submit if asked.
CESB controversy and criticism
The idea of the CESB was to distribute $5.25 billion to students who needed help. Although the program gave benefits to more than 700,000 students in the summer of 2020, it only spent $2.94 billion of its budget, leaving $2.31 billion unspent.
This underwhelming funds distribution caused national deputy chair of the Canadian Federation of Students Nicole Brayiannis to declare the program “across the board, a letdown and a disappointment.” She saw flaws in the program’s rules, including a lower-than-ideal benefit amount and the exclusion of international students and certain recent graduates.
Government officials say that it is difficult to estimate ahead of time how much such programs created in unusual times will be able to disburse. Other benefit programs including the federal wage subsidy and the commercial rent program also had higher allocated budgets than experts expected these programs to be able to distribute to recipients.
“I think it’s a matter of the very high level of uncertainty, because most of these programs were never tried before, or the conditions under which these were developed were quite difficult,” Parliamentary Budget Officer Yves Giroux said.
Other critiques took issue with how the program was structured. LGBTQ advocate and newspaper columnist Adam Zivo complained that the CESB “was designed in a way that enabled astronomical sums of public funds to be transferred to the well-off.” He stated that funds were dispensed without any method of confirming an applicant’s true need, backing up the claim with data from the Fraser Institute showing that $1.6 billion in funds from the program went to students whose families have at least $100,000 in annual income.
The goal of helping students during the pandemic is definitely a worthy one, but it seems that the design and implementation of the CESB may have fallen short of the Canadian government’s ideals.
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