Canada's auditor general says that while the federal government effectively delivered emergency COVID-19 benefits during the pandemic, deciding to not front-end verification resulted in $4.6 billion in overpayments to ineligible individuals.
After sending out an estimated $211 billion in COVID-19 aid, a performance audit tabled in the House of Commons on Tuesday found that the Canada Revenue Agency and Employment and Social Development Canada are "falling short" when it comes to following through on belatedly verifying recipients' eligibility.
The audit notes that, in initially rolling out benefits like the Canada Emergency Response Benefit (CERB) and the wage subsidy starting in 2020, in order to expedite financial assistance to those who needed it the government chose to rely on attestation information provided by applicants and limited federal pre-payment checks before the funding was provided. As the pandemic evolved, these payment verification plans were put off further.
Now that these massive financial aid programs have stopped, Hogan says that the federal bodies responsible for the programs are still tallying up how much money may have gone to those who aren’t eligible. And, with legislated deadlines approaching, the federal government "may be running out of time" to identify and recover the amounts owing.
The auditor general found that, in addition to the billions of dollars in overpayments, another estimated $27.4 billion in payments to individuals and employers should be "investigated further" for potential ineligibility, including $15.5 billion that went out through the wage subsidy program.
Of the $4.6 billion in overpayments to ineligible recipients, the audit found that $3.1 billion was paid to 1.8 million recipients who received an advance lump-sum EI overpayment, while $1.5 billion went to more than 710,000 recipients who received more than one benefit per period.
So far, CRA's efforts to collect overpayments have largely been limited to responding to Canadians looking to voluntarily pay back their COVID-19 benefits, Hogan found. Through these efforts, approximately $2.3 billion has been recovered as of this summer.
"A more definitive estimate of payments made to ineligible recipients and amounts to be recovered by the government will be determined only after the agency and the department have completed their post-payment verifications," reads the report.
The government was aware at the time that money could be going to those who weren’t eligible, according to auditor general Karen Hogan. However, the federal aid did assist in Canada's economic rebound from the global crisis, she notes.
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