Canadian taxpayers may be on the hook for $2.4 billion due to a projected write-off of debts from a pandemic loan relief program, federal records show.
The expected loss stems from the $42.9 billion Canada Emergency Business Account (CEBA) program, which offered loans to business owners affected by lockdown orders during the COVID-19 pandemic.
The amount was disclosed as a result of a request by Conservative MP John Williamson, who represents the riding of New Brunswick Southwest, according to Blacklock’s Reporter.
The MP asked for figures on “the dollar amount of Canada Emergency Business Account loans projected to be written off as bad debt or other reasons such as fraud.”
Cabinet, in an Inquiry of Ministry tabled in the House of Commons, put the figure at $2.4 billion, though loans are not repayable until Dec. 31, 2023.
“The dollar value of loans written off to date is $1.3 million,” the Inquiry of Ministry said. “Financial institutions administer the program and can only write off if the loan is to a borrowing customer and the financial institution is writing off some or all of its own loan.”
‘Lack of Clarity’
According to Blacklock’s Reporter, the cabinet gave no rationale for the multi-billion write-off. The federal finance department has likewise declined to explain loans offered to businesses that never qualified in the first place, said the media outlet.Tory MP Marty Morantz who requested the data said at the time he would request the finance department to release more records for clarity.
“Given the lack of clarity on what types of organizations fall under the ‘public administration’ category, I will be submitting a further Order Paper question,” he said.
Access to Information documents show Finance Minister Chrystia Freeland’s office could not disclose further details of the loan borrowers.
“Examples of such businesses cannot be provided without prior consent from the financial institution and the borrower,” staff wrote in a Dec. 9, 2020 email, obtained by Blacklock’s Reporter.
Federal managers were “working closely with Canadian financial institutions to deliver these loans to qualifying businesses,” it said.