Federal government deposited nearly $26 million in the wrong bank accounts last year

The federal government deposited nearly $26 million into the wrong bank accounts last year — and more than $10 million of it may be gone for good. The misdirected deposits can cause hardship for Canadians whose payments went astray.

Percentage of payments ending up in the wrong accounts rose sharply compared with previous years

Misdirected federal government payments caused hardship for many Canadians, critics say. (hedgehog94/Shutterstock)

The federal government deposited nearly $26 million into the wrong bank accounts during the last fiscal year — and more than $10 million of it may be gone for good.

According to figures tabled in the House of Commons, the government sent 22,170 direct deposits to the wrong bank accounts between April 1, 2020 and March 31, 2021. In the previous fiscal year, it deposited 9,619 payments worth a total $6.6 million into the wrong accounts.

The number of cases reported during the 2020-2021 fiscal year is the highest since at least 2012. The total amount paid into the wrong accounts — $25.9 million — is much higher than the figure reported for the previous year and is the second largest annual amount of misdirected cash reported since at least 2009.

While the government was able to recover $7.1 million in misdirected payments last year, another mislaid $10.2 million is listed in government documents as "not expected to be recovered." The government says it hopes to chase down and recover another $8.6 million in coming years.

The largest single payment misdirected last year — for $3.5 million — was recovered by the federal government.

With billions of dollars in federal government direct deposit payments of all types being made each year, a small percentage of them inevitably end up in the wrong places.

But for those waiting on money from Ottawa, misdirected payments can cause headaches and hardship.

Conservative Treasury Board critic Kelly McCauley said government payments that end up in the wrong bank accounts can cause real problems for the intended recipients. (CBC News)

Conservative Treasury Board critic Kelly McCauley said his office has received a lot of calls from constituents whose benefit payments never arrived and who couldn't get through to the Canada Revenue Agency (CRA), which oversees many pandemic benefit programs.

"The difficulty was trying to get through to CRA for months and months," said McCauley, MP for Edmonton West.

The government says the spike in the number of payments going astray is due to the large rise in the number of payments going to individual Canadians because of the pandemic.

"There was a significant increase in payments issued from April 1, 2020 up to March 31, 2021 to individuals and businesses as a result of the actions taken by the government to support hardship created by the COVID-19 pandemic," wrote Stéfanie Hamel, spokesperson for Public Services and Procurement Canada (PSPC). The department includes the Receiver General's office, which oversees government payments.

"In 2020 to 2021, the Receiver General issued 405 million direct deposits for a value of $494 billion," Hamel continued. "This represents an annual increase of 35 per cent and 56 per cent respectively."

Hamel said the misdirected deposits amounted to only 0.0053 per cent of the total paid out.

In a briefing binder prepared for a committee appearance in March 2020, PSPC said the percentage of direct deposit money that had been misdirected was 0.002 per cent of the total in 2018-2019 and 0.003 per cent in 2017-2018.

Hamel said government payments can end up in the wrong accounts for a number of reasons.

"Some reasons for misdirected deposits may include manual errors, wrong information received from the recipient (ie the recipient provides incorrect banking information), wrong information received from the department, and potentially, fraud," she wrote.

Hamel said the department has "rigorous processes in place" to recover money deposited into the wrong accounts and makes a "sustained effort ... within the parameters of the law" to recover the money.

The process to issue a replacement payment for deposits that go astray can vary by government department, but it often requires the person whose payment was deposited in the wrong account to sign an affidavit in front of a witness to certify they have not received the payment, said PSPC spokeswoman Michèle LaRose. Once the government receives the affidavit form, it can issue a replacement payment. 

"In cases where the department responsible for the payment believes that waiting for this process to complete itself would create undue hardship for the intended recipient (such as in the case of certain socio-economic payments), the department may issue the second payment without the completed form," LaRose added. "In these cases, departments have processes in place to recoup the funds in the event of an overpayment, since these payments tend to be recurring."

McCauley said that while he understands more payments means more chances to make mistakes, this amount of money suggests a bigger problem.

"I think this just goes back to the issues we have seen where the government is opening up the gates with no oversight and no protection for taxpayers of how this money is going out," he said.

McCauley said the auditor general has flagged the fact that it costs the government a lot to recover money paid out by accident.

NDP revenue critic Niki Ashton says the federal government is 'failing Canadians.' (Sean Kilpatrick/The Canadian Press)

He said he understands the need to get things done quickly in March and April 2020, but the problems continued afterward.

"By October, the CRA (Canada Revenue Agency) was telling us they had still not set up better guardrails to protect Canadians — either taxpayers from fraud or taxpayers from having their accounts taken over or money applied (for) on their behalf," he said.

"It just shows a lack of competence from this government or lack of care from the government. They're more interested in making these announcements about having your back as opposed to doing it right."

NDP revenue critic Niki Ashton said Prime Minister Justin Trudeau's government is "failing Canadians."

"Canadians rely on these benefits to survive," she wrote in a statement. "Cost of living is on the rise ... The Liberals' approach to taxation is to let billionaires off the hook while working people pay the price."


Elizabeth Thompson

Senior reporter

Award-winning reporter Elizabeth Thompson covers Parliament Hill. A veteran of the Montreal Gazette, Sun Media and iPolitics, she currently works with the CBC's Ottawa bureau, specializing in investigative reporting and data journalism. She can be reached at: elizabeth.thompson@cbc.ca.

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