$4.6 Billion in COVID-19 Relief Payments Went to Ineligible Recipients, Says Auditor General

Auditor General Karen Hogan attends a news conference in Ottawa, on March 25, 2021. Adrian Wyld/The Canadian Press

Auditor General Karen Hogan says $4.6 billion of the federal government’s previous COVID-19 relief payments were collected by recipients who didn’t meet the eligibility criteria, and at least another $27.4 billion went to individuals whose eligibility status still requires confirmation.

Hogan’s office wrote in a performance audit tabled in the House of Commons on Dec. 6 that the issue came about from the federal government’s decision to prioritize sending the payments out quickly rather than first vetting applicants to ensure they met the eligibility criteria.

“The Government of Canada set an objective of helping Canadians as quickly as possible,” read the performance audit, adding, “To expedite issuing payments, the Canada Revenue Agency [CRA] and Employment and Social Development Canada [ESDC] relied on personal attestations.”

The report also said federal departments decided to “focus less on confirming the eligibility of applicants up front and more on reviewing eligibility after payments were issued and recovering overpayments or payments made to ineligible recipients.”

This resulted in relief payments going out to a large number of Canadians now known to be ineligible and an even greater number of individuals whose eligibility status is still unknown.

“We found $4.6 billion of overpayments made to ineligible recipients of benefits for individuals,” said the audit report. “In addition, we estimated that at least $27.4 billion of payments to individuals and employers should be investigated further.”

Previous Report

Hogan’s figures differ slightly from the amount cabinet declared in a recent Inquiry of Ministry tabled in the House of Commons, which said that $5.3 billion worth of COVID relief payments were sent to ineligible recipients.

In the same Inquiry, cabinet said it was aware of at least 2.5 million Canadians who collected Canada Emergency Response Benefit (CERB) cheques—which totalled $2,000 and could be collected monthly for a period of time—despite not meeting eligibility criteria.

Hogan’s performance audit tabled in the House today further said that federal departments should’ve planned for more post-payment eligibility checks to ensure that ineligible recipients be required to return the relief money they collected.

“We found that their [CRA and ESDC] post‑payment verification plans did not include verifying payments made to all identified recipients at risk of being ineligible for all COVID‑19 benefit programs,” said the audit report.

“Given the limited pre‑payment controls and the early decision to focus on post‑payment verifications, we expected the department and the agency to perform extensive post‑payment verifications to identify payments made to ineligible recipients.”

Cabinet said in a previous Inquiry of Ministry that the federal government has attempted to recoup some of its losses from ineligible COVID relief payments.

As of September, the government said repayment notices had been sent to around 1.7 million ineligible Canadians who collected the relief payments. However, Minister of National Revenue Diane Lebouthillier also said at the time that the “intended total recovery amount” couldn’t be accurately predicted.

Going Repayment

Federal ministers today responded to the auditor general’s report tabled in the House.

Minister of Employment Carla Qualtrough addressed the large amount of COVID payments that went out to ineligible recipients during the pandemic, saying they “kept the economy afloat at a time of unprecedented risk.”

Qualtrough said the process of verifying whether or not recipients were eligible “remains ongoing” and said ESDC has sent out over 50,000 letters to “potentially ineligible recipients requesting proof of eligibility.”

“We’ve also issued 1.8 million overpayment notices to individuals to reconcile advanced payments of emergency benefits and we’ve recovered $1.3 billion to date,” Qualtrough said.

“We have a strong plan to conduct post-payment verification and we are carrying out this work methodically.”

Andrew Chen and The Canadian Press contributed to this report.