UPDATE 2-Canada to transition people off COVID-19 emergency benefits in September

(Updates throughout)

OTTAWA, July 31 (Reuters) - Canada will start transitioning people off its main emergency income support program and onto traditional unemployment benefits in September, the government said Friday, as the country looks to wind down the costly COVID-19 aid plan.

Prime Minister Justin Trudeau told reporters the government will also create a parallel benefit for people who do not qualify for traditional employment insurance (EI), such as gig or contract workers.

“We intend to cover every Canadian who is looking for work with a better, 21st-century EI system. That is our goal,” Trudeau said at a news conference.

Canada rolled out the Canada Emergency Response Benefit (CERB) to offer broad support to the millions of Canadians who lost their jobs amid coronavirus shutdowns. It has so far paid out C$62.8 billion ($46.9 billion), and is budgeted to cost C$80 billion through the end of August.

Employment Minister Carla Qualtrough told reporters the majority of people would move to the EI program in September. Officials have been working on revamping the program since the crisis started in mid-March.

“It’s been tested and tried and tested, and I can assure Canadians it’s ready to take in probably around 4 million applications at the beginning of September,” Qualtrough said at a news conference.

“We can take in those high volumes of people without a disruption of benefits,” she said.

The government put the CERB program in place because the EI system could not handle the rapid influx of new applicants as millions of people were laid off, or lost work hours, due to COVID-19. Many people also did not qualify for traditional EI.

Qualtrough said the entry requirements have been relaxed to benefit more people.

Canada also announced that an emergency commercial rent support program will be extended by one month to help eligible small businesses continue to pay rent for August. ($1 = 1.3386 Canadian dollars) (Reporting by Julie Gordon in Ottawa; Editing by Kevin Liffey and Jonathan Oatis)