An internal Canada Revenue Agency audit of more than $5-billion in CERB and other emergency payments to individuals during the pandemic has determined that about 65 per cent went to ineligible recipients who must pay back the money.
The agency says it targeted the audits to focus on high-risk cases and “fully expected” that a high percentage of the payments would be ruled ineligible. The audited amount is a small fraction of the tens of billions of dollars paid to individuals during the pandemic.
The figures are contained in a CRA document sent to the House of Commons public accounts committee that includes new information on the agency’s efforts to review pandemic benefit payments.
With respect to the Canada Emergency Response Benefit (CERB) and other similar pandemic programs for individuals, the CRA says it has reviewed $5.29-billion in payments, which has resulted in $3.42-billion in debts, meaning 65 per cent of the payments were deemed ineligible.
As of Feb. 2, the CRA says it has recovered approximately $997-million of the amount owed.
The Liberal government and the CRA have been on the defensive for weeks after Auditor-General Karen Hogan released a report in December warning that billions of dollars in ineligible COVID-19 benefit payments are at risk of going uncollected.
That report found $4.6-billion in overpayments to ineligible recipients and an additional $27.4-billion that Ms. Hogan said should be investigated further. In addition to those amounts, Ms. Hogan said the government should also look into $1.6-billion in CERB payments to 190,254 individuals who quit their jobs, $6.1-million in CERB payments to 1,522 people who were in prison and $1.2-million to 391 deceased people.
Liberal ministers and the CRA have pushed back on Ms. Hogan’s conclusion that the government isn’t doing enough to collect ineligible payments.
Since then, members of Parliament have been holding hearings into the Auditor-General’s findings and asking senior CRA officials to respond to the Auditor-General’s concerns.
The Auditor-General’s report said the federal government paid a total of $210.7-billion in benefits to individuals and businesses during the pandemic. Nearly half went to employers, through the Canada Emergency Wage Subsidy, while the rest went to individuals, through CERB and similar programs.
Conservative MP Adam Chambers said the CRA needs to be more transparent about how it decides which payments will be audited and which amounts it will seek to recover.
“This high rate of error signals that far more payments need to be reviewed,” he said, adding that the results raise questions as to why the government pushed back on Ms. Hogan’s recommendation that more effort should go toward identifying and collecting ineligible COVID benefit payments.
“Canadians have a right to know how their tax dollars were spent,” he said. “All of these programs were funded by debt that future generations are now responsible for.”
COVID-19 benefits compliance
Results of a targeted Canada Revenue Agency review of pandemic
payments, which found $3.42-billion went to ineligible individuals
Total of audited payments: $5.29-billion
Payments to individuals deemed ineligible: $3.42-billion
Recovered: $997-million (as of Feb. 2)
the globe and mail, Source: Canada Revenue
Agency
COVID-19 benefits compliance
Results of a targeted Canada Revenue Agency review of pandemic
payments, which found $3.42-billion went to ineligible individuals
Total of audited payments: $5.29-billion
Payments to individuals deemed ineligible: $3.42-billion
Recovered: $997-million (as of Feb. 2)
the globe and mail, Source: Canada Revenue Agency
COVID-19 benefits compliance
Results of a targeted Canada Revenue Agency review of pandemic
payments, which found $3.42-billion went to ineligible individuals
Total of audited payments: $5.29-billion
Payments to individuals deemed ineligible: $3.42-billion
Recovered: $997-million (as of Feb. 2)
the globe and mail, Source: Canada Revenue Agency
Mr. Chambers said it is possible that some people made honest mistakes and there may be an argument for waiving debt in some cases, but he said it’s up to the government to provide data to make that case.
The CRA media-relations team was asked if the high rate of ineligible payments has prompted the agency to expand its review.
“The verification of eligibility for Canadians who claimed the benefits is ongoing, and is expected to continue until 2025,” the agency replied via e-mail. “The CRA’s compliance plans are evergreen and will continue to be adjusted as work continues and results are analyzed. We expect to have more conclusive results on postverification work once this work nears completion.”
The CRA documents do not break down why individuals were deemed ineligible for the amounts they received.
The CERB paid $500 a week to people who were not able to work because of the pandemic.
NDP finance critic Daniel Blaikie said he’s been unable to get clear answers as to how the government decides where it will target its auditing and debt-collection efforts. He also said the government should consider a low-income amnesty for Canadians who will struggle to repay benefits.
“It’s just not a good investment of taxpayer resources to be spending a lot of time pursuing people that don’t have the money to pay back that debt and took the government at its word when it said, ‘Look, if you’re in crisis, during this unprecedented time, and you need financial help, apply for CERB,’ ” he said.
CRA Commissioner Bob Hamilton addressed this point in general terms during a recent committee appearance.
“It is important to note that our compliance work can involve vulnerable populations, many of whom are struggling,” he said, later adding that the agency will work out a payment plan for individuals facing financial hardship. “We engage in a discussion with them, trying to be empathetic to whatever financial situation they are in, because we know that if we’d try to get all that money right away, it’s not going to work.”
The CRA document also says that 10 agency employees “were subject to internal investigation,” in response to a question from an MP last month who asked how many cases of CRA employees incorrectly claiming COVID benefits had been identified.
The CRA declined to provide additional information when asked by The Globe.
“While some of these cases at the Canada Revenue Agency have led to a termination of employment, being more specific could lead to a breach of the Privacy Act,” the agency said in an e-mail.
Employment and Social Development, the other department responsible for delivering pandemic benefits, recently provided more specific figures.
Assistant deputy minister Mary Crescenzi told the public accounts committee last month that ESDC has terminated 49 employees “in regard to misrepresentation of their situation when they were applying for CERB.”