Case Study: Costing government’s Work-Sharing program for those affected by COVID-19.
Suppose, to mitigate the economic impact of COVID-19, the Government of Canada announced a
temporary measure of the Work-Sharing (WS) program to support employers and employees affected
by COVID-19. Effective April 1, 2020 to March 31, 2021, and not limited to one specific sector or
industry, employees who agree with their employers for temporary work hour reductions are entitled to
receiving Employment Insurance (EI) payment of 55% of their weekly insurable earnings prorated to
percentage reductions in work hours. The EI benefits employees receive are subject to an effective
personal income tax rate of 13%. Empirical evidence suggests that work hour reductions will be about
the average of reductions in Finance, Real Estate, Education (except university), Construction and
Resources industries.
Estimate the WS program cost for the fiscal year 2020 – 2021.
∙ What methodological approach would you take?
∙ What data would you use?
∙ What assumptions would be required?