Achingly Close – Part 3 – Salt on the wound

In two earlier blog entries, I talked about the Federal Court case lost by Amanda Coscarelli. Her earned income in 2019 fell $7.26 below the $5,000 threshold required for eligibility for the Canadian pandemic benefits called the CRB.

In the first blog, I made the case explaining why Amanda should have been found eligible on appeal and in the second, I attempted to counter a number of thoughtful arguments in support of her remaining ineligible as well as Court requirements for high standards of bookkeeping for very low-income earners.

I raised several issues about fairness, evidence, double standards and conjectured that Amanda may have been eligible for pandemic benefits if, in 2019, she had received even $10 in the form of an eligible Honourarium.  

For example, I personally receive several Honourariums each year for volunteering, sitting on panels, delivering PowerPoint decks or assisting in Church basements.

She likely made $5,000 and no one knows.

But thus far in these entries, I have had very little to say about policy. In this third piece, I break my silence.

I have taught policy at the community level, to ODSP and OW recipients, at Foundations, for governments, agencies and volunteers. At most of these venues, I have also taught benefit design and just to make it easy on myself, I have written a deck on understanding benefit design and the 10 principles of good benefit design.

The CERB and CRB do not observe 4 of the ten principles and in many ways, I don’t blame the designers. I contend that all the best minds in benefit design would not have done any better. It is impossible to design such a large suite of programs without making mistakes and taking a lot of shortcuts.

Canada was justly lauded for the magnitude, the effective delivery and the speed at which its pandemic benefits were rolled out. When speed is one of the most important objectives, canvassing principles of effective delivery of benefits is not necessarily top of mind.

But as I noted in my first entry, two wrongs don’t make a right. What you get wrong going out the door, you certainly have the opportunity to make right on appeal. That’s what the government has done for students, the self-employed and low-income seniors and that is at the heart of my objections in this series.

So let’s look at the violations as the CERB and CRB were blown out the door.

My first principle is to align program objectives with design. The overriding program objective of pandemic benefits was to keep people safe and indoors during the early part of the pandemic. Another objective was to help people who lost their jobs and who were unable to go back to work. The CERB and the CRB used the $5,000 threshold of 2019 earnings as a proxy to provide pandemic benefits for people who suffered job loss.

The CERB and CRB do not meet the first principle as people whose earnings were less than $5,000 also suffered job loss and many were forced to keep working during the most dangerous part of the pandemic. But the amount of $5,000 – at bottom -was arbitrary.

The second principle is to align Canadian values with design parameters. I don’t know where I would find a Canadian value that stipulates that pandemic benefits should be restricted to people who earned over $5,000. Yes, Canadians believe in helping people who have lost their jobs or we would not have EI or welfare programs. But the $5,000 threshold is nowhere to be found in the value ecosystem of Canadians.

Therefore, the second design principle is not met mostly because the $5,000 threshold came from out of the blue.

The third principle is to understand benefit structure. The CERB and CRB were incredibly innovative and it’s difficult to know whether they were paid to the people who the government intended to pay. We do know that the rules kept changing after the benefit was in pay – what counted as income – to whom – when and how. But it’s hard to say that the CERB and CRB violate the principle of understanding benefit structure. There was simply too little time to study it.

The fourth principle is perhaps the most important: Understanding the four elements of an income test. In the case of the CERB and CRB – the recovery or tax back rate on income is simply entirely missing. There is no on ramp or off ramp. You are either eligible or you are not. Miss the threshold by even one cent and you are ineligible. Add a cent and you are eligible.

No other income tested benefit has no on and off ramps: GIS, the CCB, the CWB, all income assistance programs. The lack of on and off ramps – even if you are designing in a hurry is a violation of a fundamental principle of design.

The fifth principle is to pay attention to program interactions. The CERB and CRB did not. Whether rent geared to income housing (RGI, social assistance, or the GIS, little attention was paid to program interaction except after the fact as in the case of the GIS.

But we were in a hurry. There was no time to pay attention to program interactions. The principle in this case is less violated than it was pre-empted.


The sixth, seventh and eighth principles were not violated. The CERB and CRB were always statutory benefits.   There were clear time limits on the benefits but they ended before the pandemic had ended. But they were always advertised as time limited.

The eighth principle of involving people with lived experience was pre-empted as opposed to being violated in the rush to get the benefits out the door.

The ninth and tenth principles related to ‘walking decision makers through the benefit design’ e.g. inclusive design, proof of concept and airing out all the options – we will never know. All we will know is that they were in a hurry.

The verdict?

Out of ten principles, three or four were clearly violated and the others were either pre-empted or we will never know unless a full evaluation is undertaken.

So where does that leave us?

It leaves us with a system that is treating the CERB and CRB as if they were carefully designed programs with safety valves and all the second chances that are features of our income security system.

Fast and furious?

So what!

The CRB and CRB were the largest income security programs ever implemented in Canada and the only ones to be summarily dismantled just over a year later.

This is important.

But pundits of all stripes continue to target non-compliance and cheaters as if our pandemic relief programs were the product of sober and careful benefit design.

They weren’t.

The pandemic we are told was a once in a century event.

If that’s true, then let’s start treating it that way.

And if you shut down the program – then retire the debt.

And here’s the thing.

If businesses chowed down on pandemic benefits and swelled their profits in the bargain, then go after them for the dough. They have it and you can get it back.

But for those who applied in good faith and missed by a few bucks, stop the nonsense and let them go.

You’re not going to get any money in any event.

Technical Epilogue

Just another brief visit to principle #4 on income testing and how best to implement a proper income test..

If the Federal government had implemented an income test that looked like any other income test they have ever implemented, they might have implemented a 100% recovery rate on all earned income under $5,000. That way, Amanda would have lost $7.26 off of a CRB entitlement of $14,000.

They also could have reduced the CRB by $1,000 for each $100 or part thereof in earnings someone made under the $5,000 threshold if they wanted to restrict eligibility to low income earners. That way Amanda’s $7.26 deficit would have resulted in a $1,000 haircut and a CRB payment of $13,000.

But no – she was $7.26 short of a yearly threshold of $5,000 and got nothing.

Js Feb 10