Canada paid out billions of dollars in CERB to people who lied about needing it
Canada's federal government won plenty of praise in early 2020 when lockdowns suddenly took away the livelihoods of millions of workers in industries such as hospitality, retail and anything else reliant on non-virtual labour.
The Canada Emergency Response Benefit (CERB) was launched just a few weeks after States of Emergency were declared across the nation, providing swift help to those who'd lost their incomes due to the pandemic.
Roughly 8.9 million Canadians applied for the taxable benefit, which provided $2,000 per month to eligible unemployed workers, and they received that relief money fast, thanks to the government's decision to take people at their word and an almost complete lack of verification measures.
After multiple extensions to the initially four-week-long program, CERB ended in September of 2020 and was replaced with an enhanced EI benefit.
Additional supports were rolled out as the pandemic dragged on through 2021, such as the Canada Emergency Wage Subsidy, Canada Worker Lockdown Benefit, Canada Recovery Benefit and the Canada Sickness Recovery Benefit.
In the end, the federal government distributed $210.7 billion ($74.8 billion in CERB alone) to Canadians who were unable to work — or rather, those who told the government they couldn't work.
A report released on Tuesday by Canada's auditor general, Karen Hogan, reveals that at least $4.8 billion of government money went to people who were not eligible for COVID benefits, and that the recipients of another $27.4 warrants "further investigation."
The government's decision to take workers at their word, without any sort of screening, was criticized by some when the pandemic first hit, but Prime Minister Justin Trudeau argued that getting payments out swiftly was more important than verification.
Officials promised at the time that they would conduct extensive post-payment verifications to claw back anything taken by scammers or ineligible recipients, but according to Hogan, they have yet to sufficiently do so.
"In 2020, the government decided to rely on information provided by applicants and limit pre-payment controls to expedite helping people and employers affected by the pandemic," said the AG in an opening statement when presenting her findings in the House of Commons on Tuesday.
"In doing so, it recognized that there was a risk that some payments would go to ineligible recipients. We found that overpayments of $4.6 billion were made to ineligible individuals, and we estimated that at least $27.4 billion of payments to individuals and employers should be investigated further."
Hogan noted that some $2.3 billion of errantly-distributed funds had been recovered as of this summer, thanks mostly to voluntary repayments from individuals who'd received them.
Aside from that, she found that any further efforts to "collect amounts owing have been limited," focusing mostly on asking people to pay the money back.
"I am concerned about the lack of rigour on post-payment verifications and collection activities," she said, noting that current post-verification efforts are "insufficient."
"The Canada Revenue Agency and Employment and Social Development Canada need to act now to expand their post-payment verification plans to include all recipients identified as being at risk of being ineligible for benefits, then the department and the agency need to carry out their plans and recover COVID‑19 benefit amounts owed."
In her report, the 11th COVID audit compiled so far, Hogan said that the department and agency failed to "develop rigorous and comprehensive plans to verify the eligibility of recipients" following the health crisis.
It is her recommendation now that the government steps up its game before it's too late.
"There have also been delays in conducting post‑payment verifications and the collection of amounts owing has just started," she wrote. "The department and agency are at risk of not completing all planned post‑payment verifications within the applicable timelines. This means they may be unable to identify and recover amounts owing."
"Billions of dollars have gone or may have gone to ineligible recipients," she said on Tuesday.
"To preserve the integrity and fairness of Canada’s tax system, the government is required under current legislation to take action. If it chooses a different approach, then it must be clear and transparent with Canadians."
Bank of Canada
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