CRA Plans to Spend More Than $500 Million Tracking Down Incorrect Pandemic Relief Payments

The landing page for the Canada Emergency Response Benefit is seen in Toronto on Aug. 10, 2020. (Giordano Ciampini/The Canadian Press)

The Canada Revenue Agency (CRA) says it will spend roughly $538 million tracking down ineligible claimants of pandemic relief payments.

The CRA has already spent $387.6 million on staff time and resources in an attempt to recover incorrect payments from the Canada Emergency Response Benefits (CERB) program, documents tabled in the House of Commons show.

The CERB program offered $2,000 per month, or $500 per week, to those whose working income was hindered due to COVID-19. Another $150 million has been budgeted for the recovery effort over the next two years, according to the documents that were first reported on by Blacklock’s Reporter.

The numbers were submitted in response to an inquiry by NDP MP Bonita Zarillo.

As of Sept. 29, the CRA knew of about $3.56 billion worth of incorrect payments from the CERB program as well as $2.3 billion in ineligible payments made from the Canada Recovery Benefit (CRB) program, the documents show.

Canadians who were employed or self-employed and not able to claim employment insurance could receive some support through the CRB program.

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Auditors for the CRA were looking to recover incorrect payments from the programs worth as much as $28,000 and as little as 10 cents, the documents said.

Access to information records obtained by Blacklock’s showed that $635.9 million in benefit payments were sent to high school students, including 40,630 claims by Grade 9 students. Workers inside the CRA who received pandemic support payments are also being investigated.

On Dec. 20, the CRA said it had already fired 185 employees who took CERB payments when they were ineligible. The organization said it was reviewing 600 cases of employees who took the payments. Those who were found to be ineligible would be expected to pay the money back, CRA said.

As of July, the organization had successfully recovered $2 billion in payments made to those who were ineligible for CERB.

A briefing note obtained by Blacklock’s Reporter showed that more than 1.1 million Canadians had fully repaid their CERB debts, totalling in excess of $2.1 billion.

“A balance of $1 billion remains unpaid,” said the note.

Employer Wage Subsidy Program Payouts

CRA has also cracked down on employers who were involved in the wage subsidy program that started during the pandemic.

In November, it announced it had denied or adjusted $458 million in funds dispersed to program participants following a partially completed auditing process.

CRA’s Canada Emergency Wage Subsidy (CEWS) program offered subsidies of up to 75 percent of staff wages to help businesses retain workers during the pandemic.

The program paid out approximately $100 billion in subsidies to businesses; however, auditor general Karen Hogan previously warned that thousands of companies that received the money may not have been entitled to the assistance.

CRA said by the end of September, it had applied $15 million in penalties in relation to these files.

The audit of the CEWS program is expected to run into 2025.

Peter Wilson and The Canadian Press contributed to this report.