Nearly $10 Billion in COVID Relief Benefits Paid to Ineligible Applicants: CRA

The Canada Revenue Agency building is seen in Ottawa on April 6, 2020. The Canadian Press/Adrian Wyld

Nearly $10 billion worth of COVID pandemic relief payments were sent to ineligible applicants, and to date, less than 20 percent of the amount has been recovered, a report by the Canada Revenue Agency (CRA) recently confirmed.

In a brief submitted to the Senate national finance committee on May 14, the CRA broke down that total amount into two categories, indicating that it was based on 544,000 cases the agency had audited up until the 2023 year-end of people who received federal COVID-related benefits.

“As it relates to individual programs, the CRA had completed reviews and thus far had found that $7.96B in payments had been ineligible (all amounts as of December 31, 2023),” the agency told Sen. Pierre Dalphond in the brief in a response to his questions on the matter, as first reported by Blacklock’s Reporter.

That amount refers to the agency’s estimate of what needs to be collected from individuals for COVID-related programs, the CRA said, noting that the total is more than that.

“In addition, through initiatives like double dipping, recipient-driven adjustments and adjustments between programs (i.e., where a recipient was deemed ineligible for one program, but eligible for another), an additional $1.73B had been identified as owing,” the brief said.

Only a fraction has been recovered thus far, with additional losses anticipated through ongoing audits, according to the tax authority.

“Of these amounts, $1.93B has been recovered, resulting in a net amount owing of $7.77B,” the CRA wrote. Ongoing audits by the end of 2024–25 “will undoubtedly result in ineligible amounts being added to the outstanding debt related to COVID-19 benefits,” the agency added.

That $10 billion figure does not include benefits paid to ineligible businesses. As of Dec. 31, 2023, the claims related to business programs total $510 million, the CRA calculated. This includes 150 million for the Canada Emergency Rent Subsidy and $360 million for the Canada Emergency Wage Subsidy.

‘Work Is Ongoing’

Parliament passed the “Canada Emergency Response Benefit Act” in March 2020, shortly after the World Health Organization declared the spread of COVID-19 to be a global pandemic. Other relief programs were subsequently introduced, including the Canada Recovery Benefit (CRB), Canada Recovery Caregiving Benefit (CRCB), and Canada Recovery Sickness Benefit.

Of these programs, the Canada Emergency Response Benefit (CERB) has the largest amount of outstanding debt ($3.89 billion) owed by the ineligible claimants, followed by CRB ($2.55 billion) and CRCB ($1.19 billion), as of Dec. 31, 2023, according to the CRA brief.

The House originally budgeted about $24 billion for the CERB program, but the actual cost was more than triple that amount, coming in at $81.6 billion.

The CRA’s response to Mr. Dalphond followed questions from the senator regarding the recovery of funds during a hearing at the Senate national finance committee on April 30.

“[O]f the 544,000 files that have been audited, how many have received notice of an outstanding claim?” Mr. Dalphond asked. “How much money have you collected from those who have been asked to repay the money?”

“The work is ongoing,” said Assistant Revenue Commissioner Marc Lemieux who testified before the committee.

“I don’t have precise statistics on the number of cases that have been ruled ineligible. What I can say is that, up to December 2023, we estimated that nearly $8 billion needed to be collected from individuals for COVID-related programs.”

The commissioner added that his agency aimed to audit about 875,000 people who received payments under those emergency programs.

Recovery of funds seems to be complicated, as the CRA said in its May 14 brief that as of Dec. 29, 2023, the agency has received approximately 39,291 individual insolvencies for taxpayers who had collected the pandemic relief cheques.