CRA head’s statement it’s ‘not worth the effort’ to recover all of $15.5 billion in potential wage subsidy overpayments ‘disconcerting’: PBO

OTTAWA — Canada’s budget watchdog says it was “disconcerting” to hear the head of the Canada Revenue Agency say it was not “worth the effort” to recover all of $15 billion in potential COVID-19 wage subsidy overpayments.

Speaking to the Senate Finance Committee Tuesday, Parliamentary Budget Officer Yves Giroux also noted Canadians aren’t getting the level of service expected from a “world-class” public service and called on the government to “crack the whip” on Employment and Social Development Canada (ESDC).

To his point, he highlighted delays and issues with Employment Insurance, Old Age Security and passports (all administered mainly by ESDC) as well as the federal government’s fledgling access to information system.

“Employment Insurance, where we have never or rarely seen an unemployment rate so low, yet it takes weeks and weeks for people who claim EI to get their review,” he cited as an example.

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“There are pockets of excellence, but there are also pockets of, I would say, nonchalance in the public service. They’re overwhelmed or something is not right,” he added.

Throughout the senate committee meeting Tuesday, Giroux, who was the CRA’s chief data officer and assistant commissioner before taking the job as PBO, lambasted his former agency for its views on COVID-19 benefit overpayment recoveries as well as its lack of cooperation with his office on various studies.

“The CRA doesn’t deem it worthy, appropriate or worth the effort to go after an alleged $15 billion in potential overpayments, which is a bit disconcerting when you hear that and the government is faced with a deficit,” Giroux said.

He was referring to testimony by CRA commissioner Bob Hamilton to MPs in late January that “it wouldn’t be worth the effort” to review and try to recover every dollar of $15.5 billion in Canada Emergency Wage Subsidy (CEWS) payments recently flagged by the auditor general.

In her winter report, auditor general Karen Hogan lambasted CRA for its “lack of rigour” in trying to identify and recoup all of a “minimum” $27.4 billion in suspected emergency aid benefits overpayments, including $15.5 billion for CEWS.

In late January, Hamilton told MPs on the House public accounts committee that the CRA contested how the auditor general had come to that CEWS number, which it considers to be inflated. So, if CRA was to “probe into all” those cases, it would require more effort than it was worth, he said.

That affirmation made MPs such as Conservative Kelly McCauley jump at the time, as it did Giroux.

He also took a swing at his former employer for its repeated lack of collaboration in providing him crucial data for studies he’s conducting. For example, he’s still waiting for disaggregated data on real estate investment trusts he requested in November.

“Every single time we have an interaction with them, we get incomplete information.” And then the data has to be vetted by CRA commissioner Hamilton himself, Giroux told senators.

“That’s from the institution that said to the House committee that it’s not cost-effective to go after $15 billion of potential overspending of pandemic relief. But it is time-effective for them to review information requests that we make. It tells you where priorities are in some institutions.”

Giroux said a real “Christmas gift in advance” from Parliament would be legislative changes so that “CRA would stop hiding behind taxpayer confidentiality” as an excuse to stonewall him from receiving depersonalized data.

“When we asked for information about real estate income trusts, I don’t really want to know specific income trusts information,” he said.

Giroux also expressed unexpected frustration at the government’s Departmental Results Report system, where organizations set objectives for themselves and then assess the following year if they met them or not.

“There is a system that is broken. The challenge function, those who challenge these estimates or these targets, are not very well equipped or don’t have the tools or the willingness to challenge them and ensure that the targets, the objectives themselves, are ambitious enough to make a meaningful difference. That’s one failure in the system, in my humble opinion,” he said.

He told senators he “wouldn’t be surprised” if Passport Canada, which has been buried in criticism over the past year for record delays in processing passport requests, claimed “some sort of success” in its Departmental Result Report “despite the disaster.”