Verifying Billions of Possibly Ineligible COVID Subsidy Payments ‘Wouldn’t Be Worth the Effort’: CRA Commissioner

The Canada Revenue Agency headquarters Connaught Building in Ottawa, in a file photo. (The Canadian Press/Sean Kilpatrick)

Verifying billions of COVID-19 wage subsidy claims that the Auditor General previously said could be ineligible is not “worth the effort,” says Canada Revenue Agency (CRA) Commissioner Bob Hamilton.

Hamilton appeared as a witness on Jan. 26 before the House of Commons Standing Committee on Public Accounts alongside Auditor General Karen Hogan, where both faced questions from MPs about estimated numbers of Canadians who collected the Canada Emergency Response Benefit (CERB) and other federal COVID subsidies despite not meeting the eligibility criteria.

Hamilton said the CRA believes the number of ineligible subsidy claims to be “significantly lower” than what Hogan’s office projected in a December 2022 report, which estimated that around $4.6 billion worth of subsidy payments were collected by ineligible individuals and $27.4 billion was collected by people whose eligibility status still needed confirmation.

Part of the Auditor General’s $27.4 billion figure is $15.5 billion of the Canadian Emergency Wage Subsidy (CEWS) that was collected by employers during the pandemic.

“It’s too early in the compliance cycle of this program to provide concrete numbers on total ineligible claims with a degree of certainty,” Hamilton said, adding that “a more definitive estimate of payments to potentially ineligible recipients will only be determined once the comprehensive post payment audit activities are complete.”

Conservative MP Adam Chambers asked Hamilton if he agreed with Hogan’s estimate that around $15 billion of CEWS claims could have been ineligible.

“We think that that is an overestimate,” Hamilton said, later adding that the CRA’s preliminary reviews indicated there is no need for it to focus on verifying the full $15.5 billion.

“In my view, based on what we’ve seen so far, it wouldn’t be worth the effort,” he said, as first reported by the Globe and Mail.

Verification

Hogan told the committee that while she believes the COVID response benefits “helped prevent an increase in poverty” during the pandemic, she also thinks the CRA and Employment and Social Development Canada should have made greater efforts to verify the eligibility of claimants, both before payment issuance and retrospectively.

“The number of post-payment verifications that the department and the agency have planned are insufficient,” she said. “They do not plan to verify payments made to all recipients identified as potentially ineligible.”

Conservative MP Kelly McCauley asked Hamilton why the CRA is unwilling to at least investigate the over $15 billion of potentially ineligible CEWS payments identified by Hogan’s office.

“This is a huge amount of potential money,” McCauley said. “Who in the CRA is making the decision that we’re willing to risk writing off $15 billion, $20 billion, $25 billion of taxpayers’ money?”

“I think we are doing the work that’s necessary to uncover where there are risks,” Hamilton replied.