Taxpayers fuming after audit flags suspicious $27.4B in COVID-19 benefits

Taxpayers fuming after audit flags $27.4 billion in COVID-19 benefits as suspicious

Canadian taxpayers are shocked and angry to find that a minimum of $27.4 billion paid in COVID-19 benefits require further investigation into their legitimacy.

The Auditor General of Canada Karen Hogan, with the assistance of the Canada Revenue Agency (CRA) and Employment and Social Development Canada (ESDC), published a bombshell report on Tuesday after investigating the federal government’s COVID-19 benefits programs.

The audit found that Canada fell short on efficiently verifying applicants’ eligibility as it prioritized offering speedy financial relief to Canadians to prevent a rise in poverty, economic instability, and income inequality.

Applicants included individuals as well as employers, and the CRA and ESDC, “relied on personal attestations” instead of carrying out robust filtering measures, the report states. The two bodies “decided early on to focus less on confirming the eligibility of applicants up front and more on reviewing eligibility after payments were issued and recovering overpayments or payments made to ineligible recipients.”

The audit verified that $4.6 billion was overpaid to ineligible individuals, but it might have been a much, much higher amount.

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“We estimated that at least $27.4 billion of payments to individuals and employers should be investigated further,” reads the statement from the Office of the Auditor General.

Canadians will have to wait while the CRA and ESDC complete post-payment verifications to find out exactly how much of the funding fell into the wrong hands.

“The department and agency did not develop rigorous and comprehensive plans to verify the eligibility of recipients,” the audit summary reads. “We found that their post-payment verification plans did not include verifying payments made to all identified recipients at risk of being ineligible for all COVID-19 benefit programs.”

“We expected the department and the agency to perform extensive post-payment verifications to identify payments made to ineligible recipients.”

The audit also determined that these post-payment verifications will likely not be completed within the application timelines, which means the funds that need to be recovered may never see the light of day.

So far, the CRA and ESDC have only been able to recuperate around $2.3 billion.

Late Tuesday afternoon, the CRA also published a statement in response to the audit report.

“As CRA and ESDC continue compliance efforts, they will continue to take a responsible approach to pursue fraud and a compassionate approach that is responsive to the individual circumstances of Canadians and small and medium-sized businesses,” the statement reads. “Through this work, for example, CRA’s audit results to date show that the vast majority of applicants met the requirements of the Canada Emergency Wage Subsidy program.”

The CRA also said that while it accepts the recommendations from the Office of the Auditor General, it recognizes that the programs administered were “timely and effective in meeting the objectives of contributing to the reduction of poverty and inequality while supporting the economy.”

Read the full audit report here.