Canadians oppose amnesty for 'undeserving' CERB applicants: report

Taxpayers oppose amnesty for undeserving Canadians who claimed $2,000 pandemic relief cheques they weren’t entitled to, says in-house research by the Canada Revenue Agency. Authorities have yet to explain why the Canada Emergency Response Benefit (CERB) program went 200 percent over budget.

"There is general consensus that overpayment of emergency benefits and related income taxes should be paid back to the Revenue Agency regardless of people’s personal situation," wrote researchers. The CRA polled the question "to gather background contextual information," it said.

Parliament on March 25, 2020 passed the Canada Emergency Response Benefit Act to pay $2,000-a month cheques to jobless workers facing eviction or foreclosure due to loss of income. The Department of Finance originally estimated the program at $24 billion. Final payments totaled $81.6 billion when the program expired last October.

Researchers said Canadians in focus group sessions "expressed concern with people having accessed benefits they were not entitled to." Access To Information records showed 317,900 high school students claimed benefits worth $635.9 million.

In late-May, roughly 30,000 Canadians were able to keep their CERB payments totaling $240 million due to unclear information given by the government. The debt of self-employed Canadians who claimed an average of $8,000 in CERB overpayments would be forgiven, totaling $240 million.

Around 6,500 had already reimbursed taxpayers at the time, upon receiving an "educational letter" from the Canadian Revenue Agency back in December. They were warned of suspected ineligibility. Those that sent in the money and met all other eligibility requirements, would be reimbursed for CERB payments, totaling around $52 million.

Blacklocks reported that the total CERB claimants of 8.9 million people outnumbered the jobless. Access To Information files indicated in one hamlet, Old Crow, Yukon, more than half the adult population received a cheque though the region had a jobless rate of twelve percent.

Other communities with suspiciously high claims included Leaf Rapids, Manitoba, where forty percent of working-age residents received payments. In Iqaluit, a total 28 percent of adults claimed benefits. In Wabush the rate was just eight percent.

The StatCan labor-force survey for April, completed April 18, found that three million Canadians lost their jobs and another 2.5 million were currently working less than half the normal hours since the outbreak of the virus — 5.5 million total. But then on April 19, the federal government received 6.7 million CERB claims, a difference of more than one million people.

"The concerns around the quick distribution of incentives primarily related to some people having purposefully abused the program, and other recipients who were not ill-intended potentially experiencing problems repaying the benefits later this year," wrote the Agency report Annual Corporate Research Qualitative Findings. Pollsters said taxpayers had "little appetite to allow longer repayment periods for those who had taken advantage of the situation."

"There was an eloquent argument made that the tax system must have accountability, integrity and fairness and that included an obligation to pursue repayment of money that is owed," wrote the report. "For example, it was felt if ineligible recipients were not asked to repay benefits it would be unfair to those who did not apply because they knew or thought they were not eligible."

Findings were based on sixteen online focus groups and telephone questionnaires with 1,600 people nationwide. The Revenue Agency paid Narrative Research $173,552 for the surveys.

The Department of Employment that designed the CERB program testified April 15 at the Commons public accounts committee that it was aware that at least $500 million in payments went to claimants who didn’t qualify. "We knew when we were launching," testified Graham Flack, deputy minister.

"No one is being held accountable for this half billion dollar error," said Conservative MP Raquel Dancho. "Can you provide information to this committee on who you believe is responsible for this? Where does the buck stop?"

"I’m happy to take on that accountability myself," replied Deputy Flack. "It wasn’t an error. It was a known design criteria. We knew when we were launching the benefit that it was not possible at the time we had to have real-time reconciliation."

In early-August, the federal government extended pandemic aid programs an additional month at current benefit levels, with an estimated $3.3 billion in additional costs. Two-thirds will go to recovery benefits, and the remaining one-third to support businesses.

As of July 18, $87.1 billion in taxpayer-funded wage subsidies and $5.24 billion more in rent relief have been paid since the programs launched. As of July 25, the three recovery benefits paid $26.9 billion to eligible recipients. By extending benefits until October and maintaining wage and rent subsidies rates until September, the federal government locked in changes before an expected election call next month that would cease policy-making decisions.

However, following the results of the federal election, benefits could be extended further. Budget measures approved by Parliament in June allow the government to extend pandemic aid by another month to the end of November.