Politics

Some self-employed Canadians caught up in CERB confusion won't have to repay: PM

Some self-employed Canadians are being let off the hook on repayment of thousands of dollars received through the Canada emergency response benefit (CERB).

Source says those who meet criteria and already voluntarily repaid will see the money returned to them

Minister of Employment, Workforce Development and Disability Inclusion Carla Qualtrough (right), is seen at a press conference with Minister of Finance Chrystia Freeland on Parliament Hill in Ottawa last year. (Sean Kilpatrick/The Canadian Press)

Some self-employed Canadians are being let off the hook on repayment of thousands of dollars received through the Canada emergency response benefit (CERB).

Prime Minister Justin Trudeau made the announcement in a news conference outside his residence at Rideau Cottage today.

"For people who accessed CERB based on their gross income instead of net income — as long as you met the other eligibility criteria, you will not have to return your CERB payments," he said.

"When we rolled out CERB last March, it was because people needed help in the face of a global, once-in-a-generation crisis."

A government source not authorized to speak publicly said that self-employed Canadians who applied for CERB, and who would have qualified based on their gross income, will no longer be required to repay — provided they met all the other eligibility requirements. This policy applies regardless of whether applicants accessed CERB through the Canada Revenue Agency or through Service Canada.

Those who meet that description and have already voluntarily repaid their CERB will see the money returned to them, according to the source.

WATCH | Thousands caught in CERB confusion won't have to pay:

Ottawa won’t ask thousands to repay CERB over confusion

The National

15 days agoVideo
1:58
Hundreds of thousands of self-employed Canadians will not have to give back the Canada emergency response benefit they received because of the confusion over income eligibility criteria. Some say the income threshold wasn’t clear and others say they received incorrect information from the CRA. 1:58

The information was first reported by The National Post.

In November and December of last year, some 441,000 Canadians received so-called education letters from the CRA saying they may not have met the requirements for the thousands of dollars in CERB payments they had received and might have to pay the money back.

Some self-employed Canadians said they were being told by the tax agency that the problem was related to how they calculated whether they met the benefit threshold: $5,000 in income in 2019 or in the last 12 months.

Many reached out CBC News to say they believed that meant all income, since there was no mention of expenses. The CRA insisted self-employment income always refers to "net, pre-tax income," or gross income minus expenses.

PM had been unclear on repayments 

But the CRA didn't always explain it that way to taxpayers. The Union of Taxation Employees revealed that its members had been given the wrong information on how income would be calculated — and passed that incorrect information along to CRA callers for about three weeks before the problem was corrected.

At the time, Employment Minister Carla Qualtrough said her government wasn't considering debt forgiveness for those affected.

"There's not a conversation happening right now where we would forgive people, where we would not require people who were not eligible to pay it back. No," she told CBC News in December.

The prime minister was less clear in a year-end interview with CBC's chief political correspondent Rosemary Barton.

"We're gonna work with them and I don't want people to worry over Christmas. The system needs to be fair but it also needs to be there to support the most vulnerable. That's the decision we took from the beginning — we'll have Canadians' backs."

The prime minister was asked repeatedly if some CERB applicants might not have to repay. He said the government was looking at "a range of possibilities."

"Everyone's in different situations. We're going to work with people, we're going to look at what the options are, but I don't want people to worry about repaying this holiday season," he said.

Changing direction

Qualtrough told CBC News Network's Power & Politics in an interview airing today that the passage of time has allowed the government to reconsider its initial position.

"I didn't think was in the position to say that I could do anything at the time,"  she told host Vassy Kapelos. "Subsequent to that, the prime minister went out and said, 'Nothing's off the table.' I went out and kind of took a step back and said, 'Nothing's off the table' and here we find ourselves now having worked through a solution that I think is probably the best that we could come up with."

The minister said she did not know how many people were affected by the education letters because many Canadians have yet to file their taxes.

Qualtrough also said that she regretted causing any Canadians hardship as the federal government worked through the process.

"Any time that something that I do or say causes anybody stress, I regret that, but at the time we were still gathering information," she said. "We think we have taken the time necessary to get this right because there's a lot of complexities here."

Sickness benefit changes

Qualtrough also told Kapelos that her government had not closed the door on possible changes to the federal sickness benefit. 

The Canada recovery sickness benefit (CRSB) was designed to make it easier for workers to follow public health advice urging people to stay home if they are sick. It provides $450 after taxes per week for up to two weeks.

But critics, workers' advocates, public health professionals and policy experts say the program is flawed and an insufficient replacement for having employers guarantee paid sick leave — which they argue would give low-wage and essential workers the income protection and job security they need to stay home when ill.

"Some provinces like B.C. and the Yukon have stepped up and provided additional targeted support and I would suggest that their work is not duplicative as some other provinces have suggested rather its complimentary," Qualtrough said.

"We wish provinces would step up and follow the example of some of their peers because we think this is an excellent foundation for sick leave and there's an opportunity for provinces and territories to build upon it."

Qualtrough was asked whether, in cases where provinces are refusing to provide additional financial supports, the federal government would step in to help.

"Nothing is off the table," said Qualtrough. "We are now hopefully … veering down the second wave. We may have a third wave. We are always talking about what additional supports have to be put in place and again, no decision has been made on the sickness benefit."

The federal government also announced today that Canadians with pandemic benefit debt will have up to a year to repay the amounts owing without accumulating any interest.

The move applies to those who made up to $75,000 in taxable income in 2020 and received one of the federal government's five pandemic relief benefits or employment insurance benefits.

With files from the CBC's Peter Zimonjic and Vassy Kapelos

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