CRA head: Not worth effort to review all ineligible COVID aid

CRA head: Not worth effort to review all ineligible COVID aid

Canada Revenue Agency (CRA) head says it would “not be worth the effort” to fully review $15.5 billion in potentially ineligible pandemic payroll benefits reported by Canada’s Auditor General.

“We generally take an approach almost exclusively within the agency to focus on risk-based assessment,” CRA Commissioner Bob Hamilton told Members of Parliament on Thursday afternoon. “So look at the information that we have, try to figure out where the highest risks are and go into those and the highest risk and potential for cure and don’t cover 100 percent of people.”

Hamilton appeared before the Standing Committee on Public Finances on Thursday, along with Comptroller Karen Hogan.

“We do not question the risk-based approach [CRA]did,” Hogan said during the two-hour meeting. “It’s really the amount of work, the scale of the work, that we feel is insufficient to reach that threshold of fairness of treating every taxpayer — whether they can be an individual or a corporation — fairly.”

In December, Hogan’s office presented a performance audit that uncovered an estimated $4.6 billion in overpayments of benefits to ineligible individuals. The audit also highlighted approximately $27.4 billion in payments to individuals and employers that should be “investigated further” for possible ineligibility, including $15.5 billion paid through the Canada Emergency Wage Subsidy program (CEWS), the subject of Thursday’s committee meeting was .

“The first step is to identify payments to unauthorized recipients, then the decision can be made to go after collection or not,” Hogan told lawmakers. “I just encourage the government to be a lot more transparent with what they’re doing and I think they need to do more.”

For his part, Hamilton questioned calculations in the audit, saying the true amount of ineligible payments is likely to be “significantly lower” than the Auditor General’s “overestimate” based on sales tax data.

“It is too early to estimate the amount of money overpaid,” Hamilton once said, speaking through an interpreter in French. “But we have experience [and] We can say that about six percent of the companies or individuals received money but were not eligible.”

CEWS reached out directly to employers to keep employees on the payroll during the COVID-19 pandemic. The $100.7 billion program accounted for nearly half of the estimated $210.7 billion Liberals have spent on COVID-19 relief, which includes the Canada Emergency Response Benefit (CERB) and its successor program, the Canada Recovery Benefit (CRB), were owned, to which they went directly, by individuals.

“In my view, based on what we’ve seen so far, it wouldn’t be worth the trouble,” Hamilton said of investigating all of the $15.5 billion in potentially ineligible wage subsidies outlined by the Auditor General. “Based on our evidence to date, we see that companies are generally complying… We have some groups of people who have been intentionally misleading and we are pursuing those.”

Focusing on “claims that are most likely to be ineligible or overstated,” Hamilton explained, “streamlines recovery and ensures that high-risk claims are addressed while making efficient use of a CRA’s resources.”

In December, the Office of the Auditor General aimed for the government to rely on certifications and the honesty of applicants for eligibility, saying authorities were “insufficient” in post-payment verification.

“In this case, there were very limited prepayment controls with the intent to do rigorous postpayment work,” Hogan said Thursday. “The only way to find out if a company is eligible or not is to do this postpay work because there is no other information to verify eligibility.”

Former Liberal Treasury Secretary Bill Morneau has been a vocal critic of the government’s pandemic-related spending. In his new book, Where to From Here, Morneau claims Prime Minister Justin Trudeau and his advisers regularly overruled his department’s recommendations in favor of larger pandemic payouts and policy points, contributing to Morneau’s resignation from his post in August 2022 be. Citing CEWS’ examples, he saw the Prime Minister announce a funding amount that was “significantly higher” than what he had assumed.

“It was one of the worst moments of my political life,” writes Morneau. “During the period of the largest government spending-to-GDP ratio in the shortest period since the beginning of World War II, Treasury Department calculations and recommendations in favor of winning a popularity contest were basically ignored.”

With files from CTV News Senior Digital Parliamentary Reporter Rachel Aiello

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