Regulations Amending the Canada Worker Lockdown Benefit Act (Lockdown Order Definition): SOR/2022-19

Canada Gazette, Part II, Volume 156, Number 5

Registration
SOR/2022-19 February 11, 2022

CANADA WORKER LOCKDOWN BENEFIT ACT

P.C. 2022-101 February 10, 2022

Her Excellency the Governor General in Council, on the recommendation of the Minister of Employment and Social Development, pursuant to paragraph 10(a) of the Canada Worker Lockdown Benefit Act footnote a, makes the annexed Regulations Amending the Canada Worker Lockdown Benefit Act (Lockdown Order Definition).

Regulations Amending the Canada Worker Lockdown Benefit Act (Lockdown Order Definition)

Amendment

1 The definition lockdown order in section 2 of the Canada Worker Lockdown Benefit Actfootnote a is replaced by the following:

lockdown order
means an order, regulation or other instrument made by a competent authority
  • (a) imposing, in the region specified in the order, regulation or other instrument, for reasons related to COVID-19, among other measures,
    • (i) during the period beginning on December 19, 2021 and ending on March 12, 2022,
      • (A) the closure to the public of premises where persons carry out commercial activities or provide services, that are not essential to preserving life, health, public safety or basic societal functioning,
      • (B) restrictions reducing by at least 50% the maximum number of persons that can enter or occupy premises where persons carry out commercial activities or provide services whether essential or not essential to preserving life, health, public safety or basic societal functioning, or
      • (C) a requirement that persons stay at home except for reasons that are essential to preserving life, health, public safety or basic societal functioning, or
    • (ii) during any other period,
      • (A) the closure to the public of premises where persons carry out commercial activities or provide services that are not essential to preserving life, health, public safety or basic societal functioning, or
      • (B) a requirement that persons stay at home except for reasons that are essential to preserving life, health, public safety or basic societal functioning. (ordre de confinement)

Coming into Force

2 These Regulations come into force on February 13, 2022.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

In October 2021, the Government of Canada announced the intention to introduce targeted benefits for workers who lose employment income in regions where public health lockdowns are occurring. The Canada Worker Lockdown Benefit Act (the Act), which received royal assent on December 17, 2021, was created to provide financial assistance in specified regions, for specified periods of time, as designated by order of the Governor in Council, on a case-by-case basis.

The Canada Worker Lockdown Benefit (CWLB) was initially intended to be a targeted benefit used regionally in the circumstances of full closures or stay-at-home orders. However, the rise in COVID-19 cases in mid-December 2021, driven by the highly transmissible Omicron COVID-19 variant, has resulted in enhanced public health measures in multiple provinces and territories concurrently. The CWLB was not designed to respond to the scale and nature of the current public health measures due to the Omicron variant, given the narrow definition of “lockdown order” that did not account for the impact of widespread capacity restrictions.

To reflect the evolving COVID-19 context and the real-time impact of multiple public health measures affecting workers across the country, the Regulations Amending the Canada Worker Lockdown Benefit Act (Lockdown Order Definition and Minimum Lockdown Period) were enacted on December 29, 2021. Those Regulations amended the Act to ensure that public health orders limiting capacity in essential and non-essential public places to 50% or less could temporarily (December 19, 2021, to February 12, 2022) qualify as “lockdown orders.” In addition, a requirement was also introduced on December 29, 2021, which required public orders not issued by a province, territory or Indigenous government to be acknowledged by provincial or territorial authorities in order to qualify. As provincial and territorial orders end, this legislated requirement adds extra steps and additional time to designate a region.

The Omicron wave is continuing to affect regions across Canada where capacity-limiting public health orders are still in place. To continue to support Canadian workers affected by capacity restriction orders and to address localized outbreaks in the future, an extension of the current definition via the Regulations Amending the Canada Worker Lockdown Benefit Act (Lockdown Order Definition) [the Regulations] is needed. These amendments allow the Governor in Council to designate regions with 50% capacity restrictions until March 12, 2022. Without this extension, only regions where lockdown orders which require full closure of businesses or a requirement to stay at home are in effect would meet the definition past February 12, 2022.

The Regulations directly support the Government of Canada’s response to COVID-19 and the analytical requirements have been adjusted to permit a timely and effective response.

Objective

To extend the end date and amend the current definition of “lockdown order” to reflect the nature of public health restrictions remaining in place and being introduced. This measure is intended to provide income support to Canadians as they follow measures to stay safe in response to COVID-19 variants.

Description and rationale

Recognizing that workers would still require financial support if a lockdown was imposed in a region to prevent the spread of COVID-19, the Government of Canada introduced Bill C-2, An Act to provide further support in response to COVID-19, which received royal assent on December 17, 2021. Bill C-2 enacted the Act, which provides for the CWLB, available until May 7, 2022.

This benefit was designed to provide targeted and temporary income support to workers whose employment is interrupted by a designated COVID-19 public health lockdown. These payments provide income support to workers who have lost their employment, are unable to perform work as a self-employed person, or who have a reduction in income of at least 50% due to measures in a lockdown order.

The Act specifies that the Governor in Council, on the recommendation of the Minister of Employment and Social Development (the Minister), may designate by order any region in Canada as a lockdown region, for a specific period. The Minister may make the recommendation to the Governor in Council only if the Minister is of the opinion that it is in the public interest and that measures referred to in the definition of “lockdown order” in section 2 of the Act have been in place in the designated region for at least seven consecutive days.

When it was first introduced, the Act defined a “lockdown order” as an order, regulation or other instrument made by a competent authority for reasons related to COVID-19, where non-compliance with the measures is an offence or may result in the imposing of a sanction or penalty, and requires

This definition aligned with the original concept of the CWLB as a localized benefit that would only be available when needed to provide income support to workers whose employment is interrupted by government-imposed public health lockdowns. However, the arrival and unprecedented spread of the Omicron COVID-19 variant has shifted the Canadian pandemic context: modelling from the Public Health Agency of Canada (PHAC) on January 14, 2022, forecast over 150 000 COVID-19 cases per day by mid-January 2022 — higher levels than seen during all of 2021. footnote b

Since December 19, 2021, several jurisdictions have introduced province/territory-wide public health measures in an effort to limit the spread of COVID-19. As such, regulations were made to amend the definition of “lockdown order” to temporarily include restrictions requiring a reduction of at least 50% to the allowable capacity in premises where commercial activities or services are carried out. This new definition applied for the period beginning on December 19, 2021, and ending on February 12, 2022.

In addition, the process for designating regions for the CWLB was designed for limited usage in targeted communities. With an increase in volume of public health measures across the country, the need to assess each public health order issued by a competent authority and monitor how these public health orders change, followed by the necessary legal process to designate regions under “lockdown order” risked substantial lags to CWLB availability. To address this, past amendments made to the definition of “lockdown order” also introduced a temporary requirement that public health orders must be issued by a province or territory (P/T) or Indigenous government, or be issued by a municipality or public health authority and acknowledged to the Government of Canada by the P/Ts as meeting the definition of “lockdown order” under the Act.

To continue to respond to the nature and volume of these new measures, and to ensure that affected workers continue to receive the financial support they need, the two following regulatory changes are proposed.

Extension of capacity restrictions in the definition of “lockdown order”

The amendment extends the end date of the expanded definition of “lockdown order” in section 2 of the Act to March 12, 2022. This will allow regions where public health orders limit public capacity of businesses and services to 50% or less on their premises to continue to be eligible to be designated as “lockdown regions.” Paragraph 10(a) of the Act provides the Governor in Council the authority to make this amendment through regulations.

The other measures in the definition of “lockdown order” will continue to remain part of the expanded definition. These include the following: the closure to the public of premises where persons carry out non-essential commercial activities or provide services, or a stay-at-home order.

The expanded definition will be used to assess public health orders made during the period between December 19, 2021, and March 12, 2022, in support of the immediate public health response to the rise in the Omicron variant.

Removal of legislative requirement for provincial or territorial acknowledgement from the “lockdown order” definition

The Regulations remove the requirement in the definition of “lockdown order” that orders made by municipalities or public health authorities be acknowledged to the Government of Canada by a P/T. Instead, the definition will stipulate that, as originally specified in the legislation, orders made by a competent authority can meet the definition until the legislated end of the CWLB.

The acknowledgement requirement was originally implemented as part of the temporary change to the definition of “lockdown order” to leverage P/T expertise. The removal of the requirement would allow all local orders made by competent authorities to be considered quickly for designation by the Governor in Council without the need for a formal acknowledgement from a P/T or by an Indigenous government.

These Regulations do not alter other parameters of the CWLB, and the benefit continues to be available retroactively (i.e. eligible workers can apply for benefits for up to 60 days following the end of the week for which they are eligible).

Consultation

Bill C-2, An Act to provide further support in response to COVID-19, received royal assent on December 17, 2021. Members of Parliament and senators examined the Bill as part of the legislative process and asked witnesses to provide their views on aspects of the CWLB contained in the legislation, including the process to designate lockdown regions. Generally, parliamentarians acknowledged the need to continue providing financial support to workers during the ongoing COVID-19 pandemic.

The CWLB has received public and media attention since it was announced on October 21, 2021. Initial reaction was primarily neutral and factual. There was some reaction to the announcement that the benefit would not be available to those who lost work due to non-compliance with their employer’s vaccination policies. As COVID-19 surged due to the Omicron variant, public health officials implemented stricter public health restrictions across the country. Following these restrictions, there was increased attention on the CWLB. Namely, there was concern within the media that the current structure of the benefit is too restrictive and workers affected by public health restrictions may not be eligible.

The Regulations respond directly to the continuing extraordinary economic circumstances posed by the COVID-19 pandemic. These measures need to be in place expeditiously to be effective. Consequently, consultations were not undertaken, and the Regulations were granted an exemption from prepublication in the Canada Gazette, Part I.

Cost-benefit analysis

The methodology to assess the costs of future designated regions was refined based on current data. The original “lockdown order” definition assumed that there would be full economy-wide lockdowns, as at the start of the pandemic when the Canada Emergency Response Benefit (CERB) was introduced. As such, the original methodology assumed a similar percentage of the labour force would access CWLB as CERB. However, recent data has indicated that has not been the case to date with the CWLB.

As a result, a new methodology has been developed using administrative data on the number of people accessing the CWLB. The low estimate uses the number of applications for the first week (December 19–25, 2021) since the definition change on December 19, 2021, as a percentage of the labour force to estimate the cost. This estimates a minimum percentage of the labour force that may apply for a single week. The higher estimate uses the number of unique applicants since the benefit has started as a proxy for the number of applicants to estimate the cost. The total number of unique applicants represents all those who claimed at least one week of benefits since the CWLB was introduced. As such, the total number of unique applicants is viewed as the population who are vulnerable to the lockdowns and may apply to CWLB.

Given that there are currently public health measures in place in provinces and territories, which meet the temporary expanded definition, but not the initial narrower definition of “lockdown order” under the Act, a general estimate of the costs per week of the regulatory amendments can be determined. Using this methodology, based on the number of applications for the first week of the definition change (205 000 applicants), the low estimate of the cost of the CWLB would be $61.5 million per week. The high estimate, using the number of unique applicants as of January 29, 2022 (374 390) and the above methodology would be $112.3 million per week.

This methodology will be used to present the estimated costs of any future lockdown region designations.

Estimates for the costs for the Canada Revenue Agency (CRA) to administer and enforce the CWLB on behalf of the Government of Canada are not available. There are also additional costs to Employment and Social Development Canada for the ongoing monitoring of public health orders to support the administration of the CWLB.

Small business lens

Analysis under the small business lens concluded that the Regulations will not impact Canadian small businesses. No regulatory administrative or compliance burden on small businesses have been identified.

One-for-one rule

The one-for-one rule does not apply, as there is no incremental change in administrative burden on businesses.

Regulatory cooperation and alignment

The Regulations do not have implications for international agreements (trade, environmental, human rights, etc.), obligations, or voluntary standards. They are not aimed at minimizing or reducing regulatory differences, nor at increasing regulatory compatibility with another jurisdiction. They do not introduce specific Canadian requirements that differ from existing regulations in other jurisdictions for an international program. They do not seek to enable regulatory alignment with the United States as committed to under the Joint Action Plan for the Canada-United States Regulatory Cooperation Council.

Implementation

The CRA administers and enforces the CWLB on behalf of the Government of Canada.

Existing implementation and enforcement mechanisms contained in the CRA’s adjudication and control procedures ensure proper implementation. These include, for instance, functionality to perform client accounting, withholdings, issuance of tax slips to applicants, support for individual eligibility and entitlement, tax assessment activities, and support for post-payment compliance and verification activities.

A monitoring process for lockdown orders will be managed operationally with partners and supported by continued monitoring in collaboration with Health Canada and Indigenous Services Canada to receive the information needed to designate regions. To ensure timely designation of regions and access to the CWLB, a Health Canada intake email address (CWLB.PCTCC@hc-sc.gc.ca) has been established to serve as a single point of contact to communicate COVID-19–related public health orders by competent authorities to the Government of Canada.

All of the program and operating costs will be sourced from the Consolidated Revenue Fund (CRF) until March 31, 2026, in accordance with section 29 of the Act.

The Regulations come into force on February 13, 2022.

Contact

George Rae
Director
Employment Insurance Policy
Skills and Employment Branch
Employment and Social Development Canada
140 Promenade du Portage, 7th Floor
Gatineau, Quebec
K1A 0J9
Email: george.rae@hrsdc-rhdcc.gc.ca