Over $10 Billion in COVID Relief Funds Wrongly Distributed to Ineligible Beneficiaries by CRA
Nearly $10 billion worth of COVID pandemic relief payments were sent to ineligible applicants, and to date, less than 20 percent of the amount has been recovered, a report by the Canada Revenue Agency (CRA) recently confirmed.
That amount refers to CRA’s estimate of what needs to be collected from individuals for COVID-related programs, the CRA said, noting that the total is more than that.
“In addition, through initiatives like double dipping, recipient-driven adjustments and adjustments between programs (i.e., where a recipient was deemed ineligible for one program, but eligible for another), an additional $1.73B had been identified as owing,” the brief said.
Only a fraction has been recovered thus far, with additional losses anticipated through ongoing audits, according to the tax authority.
“Of these amounts, $1.93B has been recovered, resulting in a net amount owing of $7.77B,” the CRA wrote. Ongoing audits by the end of 2024–25 “will undoubtedly result in ineligible amounts being added to the outstanding debt related to COVID-19 benefits,” the agency added.
Of these programs, the Canada Emergency Response Benefit (CERB) has the largest amount of outstanding debt ($3.89 billion) owed by the ineligible claimants, followed by CRB ($2.55 billion) and CRCB ($1.19 billion), as of Dec. 31, 2023, according to the CRA brief.
The House originally budgeted about $24 billion for the CERB program, but the actual cost was more than triple that amount, coming in at $81.6 billion.
The CRA’s response to Mr. Dalphond followed questions from the senator regarding the recovery of funds during a hearing at the Senate national finance committee on April 30.
“I don’t have precise statistics on the number of cases that have been ruled ineligible. What I can say is that, up to December 2023, we estimated that nearly $8 billion needed to be collected from individuals for COVID-related programs.”
The commissioner added that his agency aimed to audit about 875,000 people who received payments under those emergency programs.
Recovery of funds seems to be complicated, as the CRA said in its May 14 brief that as of Dec. 29, 2023, the agency has received approximately 39,291 individual insolvencies for taxpayers who had collected the pandemic relief cheques.