More than one million Canadians have to repay CERB — and in some cases EI is being clawed back to do it

With a young child at home and facing the closure of her workplace early in the pandemic, B.C. resident Rae Clair did what she thought was best: She applied and was approved for Employment Insurance (EI). Later, Clair was switched onto the Canadian Emergency Response Program (CERB).

The emergency benefit was a godsend," for Clair, given that at the time she was a single mom with $1,500 in rent to pay.

She was surprised to receive a letter from the Canada Revenue Agency stating she was overpaid for the CERB she received in 2020 and had to pay back $2,000.

Clair is just one of approximately 1.7 million Canadians who recently received a Notice of Debt from the federal agency advising they must pay back the emergency benefit.

It's not the repayment that's bothering Clair, but the way the CRA hopes to collect it.

Clair, who recently gave birth to her second child and is on maternity leave collecting EI, was told by a CRA representative that the federal agency would claw back 50 per cent of her EI to repay what she owes.

I'm fine paying it because I understand that no money is free money," Clair said. What I am mad about is that they are taking from EI." (In general, parents collecting maternity or standard parental benefits are entitled to 55 per cent of their earnings, up to $638 per week.)

In a statement, the CRA told the Star individuals receiving EI benefits will have their CERB debt recovered automatically at 50 per cent of their EI benefit rate," noting those who need a lower payment should contact the CRA. The agency also said people who repay COVID-19 benefits they were not eligible to receive can claim the repayment as a deduction on their tax return.

Clair said she called the CRA to make a payment arrangement and was told that the agency would need a minimum 25 per cent of her EI. She went on maternity leave in April and has yet to receive any EI payments.

A representative for Employment and Social Development Canada (ESDC) did not comment on Clair's specific case, but in a general statement said that people who have an EI debt, including CERB, may be subject to debt recoupment through their EI.

The ESDC representative said the agency reactivated its debt recoupment program on March 21. This means that active EI claimants with outstanding EI debt may begin to see changes in the amount of their benefit payment," the statement said.

Meanwhile, the ESDC representative said that everyone who applied for EI after March 15, 2020 had their claim processed by CERB, meaning people who applied for EI early in the pandemic received CERB instead.

Advocates who previously spoke to the Star argue that many people who have received NoRs are not in a position to repay, as the funds that were dispersed to them are already long gone, used to pay for necessary expenses.

Clair, once a single mom, feels lucky to have a partner who can help cover expenses but she worries what the situation looks like for people who don't have similar help.

People are relying on that money to make rent and buy food," Clair said of EI. Especially with the current price of housing, food and gas, this is going to make it impossible for people to survive."

Jenna Moon is a Toronto-based business reporter, focused on personal finance and affordability. Follow her on Twitter: @_jennamoon