Auditor General Finds Lack of Oversight in Pandemic Loan Program’s Value for Money
The auditor general of Canada, in a report, highlighted the lack of oversight in the federal government’s pandemic business loans program, leading to loans being given to ineligible recipients. The report found that Export Development Canada (EDC) distributed $3.5 billion in loans to ineligible businesses as part of the Canada Emergency Business Account (CEBA) program.
Audit General Karen Hogan’s report, released on Dec. 2, criticized EDC for not properly managing the program, despite providing $49.1 billion in loans to nearly 900,000 small businesses during the pandemic closures. Approximately 9 percent of the loans were given to businesses that did not meet the eligibility criteria.
The report also pointed out that EDC relied on sole-source contracts with Accenture without sufficient checks and balances. This led to issues where the vendor had excessive control over key contract aspects, compromising the program’s value for money.
Hogan further highlighted that EDC failed to implement basic controls in contract management, resulting in inconsistencies in payments and lack of penalties for substandard work. The report criticized Accenture for being given hourly contracts instead of fixed-price contracts.
Federal departments like Finance Canada and Global Affairs were also criticized for lacking oversight in managing the CEBA program. EDC’s administrative spending was not effectively monitored, leading to delayed program elements.
Responses to Report
In response, EDC acknowledged the shortcomings and stated they were proud of the program’s achievements for small businesses. They agreed with most of the auditor general’s recommendations but expressed challenges in recouping loans impacting 3 percent of recipients.
Hogan expressed concern over EDC’s partial agreement to recover loans and compared it to past issues raised by the auditor general. The federal finance department defended CEBA as a crucial support system for small businesses during the pandemic.
The Conservative Party criticized the CEBA program in light of the report, calling it a “billion-dollar boondoggle” and highlighting concerns about government spending under Prime Minister Justin Trudeau.
