Thousands of Canadians still on the hook for pandemic benefit repayments
$1.2B still needs to be repaid, according to CRA documents tabled in the House of Commons
Thousands of Canadians who received federal COVID-19 emergency benefits for which they weren't eligible — including the $2,000-per-month Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB) — are still on the hook to pay the money back to the government.
In May, the Canada Revenue Agency (CRA) sent notices to over 260,000 Canadians indicating that they had received money to which they were not entitled and would have to pay back.
But as of September, only about 19,000 of those people — less than a tenth of the total — have made repayments to the CRA, according to documents tabled in the House of Commons earlier this week. Roughly $16 million has been repaid since May, but $1.2 billion is still outstanding, the documents say.
Ron Anicich, a sound technician from Toronto, received one of the notices from the CRA warning him he would have to repay his CERB benefits. He said he felt "confused, but mainly panicked" because he thought he was eligible for the money.
"I'm sure I would be homeless if that hadn't been available to me at that time," he said.
Programs like the CERB were based on an attestation — applicants themselves had to determine if they were eligible based on the criteria.
At the time, the government promised that those who applied to the programs in good faith and made a mistake about their eligibility wouldn't face any penalties, but would still have to repay. The CRA told CBC there is no deadline for people to repay and it's committed to being flexible.
Anicich said he's not sure he'll be able to repay the money soon.
"The crushing debt that I have absolutely no way to pay and can't see any way out of this situation in my immediate future — it's depressing, quite frankly," Anicich said. "It's pretty rotten."
Thousands repaid voluntarily
The CRA did say in its documents that before the notices were sent out, 341,000 Canadians voluntarily repaid about $910 million in benefits they were ineligible to receive.
NDP finance critic Daniel Blaikie said the federal government should take a closer look at those 260,000 Canadians who still owe, determine which of them are low-income and provide those people with debt amnesty.
"What we don't know is how much of that debt is actually recoverable. Because if it's people making less than $20,000 a year or $24,000 a year in the current economy, they have no money left over to pay back government debt," Blaikie said.
"Chasing them for that money and spending money to pay people to chase them is not going to bear fruit."
Blaikie argued that the government should instead work to recoup money from fraudsters who took advantage of the pandemic programs.
A spokesperson for National Revenue Minister Diane Lebouthillier said that all Canadians who incorrectly received pandemic benefits will still have to pay the money back, but insisted the government will be flexible with those who can't pay it back right away.
"The Canada Revenue Agency will work with Canadians in an empathetic and flexible manner while ensuring that public funds went to those who were eligible," Lebouthillier's press secretary Chris MacMillan said in an email.
Conservatives say more guardrails needed
Conservative MP Kelly McCauley agreed that those who incorrectly received benefits should still have to repay the money — but accepted that it may take some time to recover all the funds.
"I would like to see that taxpayers' money that was paid out incorrectly is recovered, whether that's done tomorrow or a month from now or six months from now," McCauley said, adding it's likely to be a "a several year process."
While he said he recognized the urgent need to quickly roll out benefits like the CERB early in the pandemic, McCauley criticized the Liberals for not using that experience to set up guardrails for other programs.
McCauley pointed to the $4 billion boost to the Canada Workers Benefit — a tax credit for low-income workers — in the recent Fall Economic Statement.
The extra funding is to cover advance payments being made to Canadians who qualified for the program last year.
But the Parliamentary Budget Officer reported this week that by automatically applying the payments to all those who qualified last year, the benefit likely will go to people who are no longer eligible this year because their yearly income has risen above the program's threshold.
"The substantial cost of this … measure is largely due to the government's policy decision not to recoup these advance payments when recipients' incomes rise and they become ineligible for benefits," the PBO report says.
CBC News reached out to Finance Minister Chrystia Freeland's office for a response to the PBO report but didn't receive an official response before publication.
McCauley said the government should have more guardrails in place to ensure only those who are eligible receive the benefit.
"Instead of planning properly and ensuring that those who deserve it and need it the most are getting paid, it seems to be a continual Liberal plan of [throwing] as much money out the door without seeing who really qualifies for it," McCauley said.