Question Period Note: Fish Harvester Benefit And Grant Program

• In 2020 we launched the Fish Harvester Benefit and Grant Program, to support non-deferrable business expenses and income support to self-employed fish harvesters and self-employed crew.
• The Program issued about $162 million to more than 18,000 people in the fishing sector to help them through COVID-19.
• The Program concluded operations on March 31, 2023. All file processing is complete, and the status of all files is final.
• Over the course of the Program, some individuals received funds in excess of their entitlements, and will have to repay their overpayment amounts.
• Over 5,600 harvesters currently have amounts owing, totaling $28.4 million. In June 2024, Fisheries and Oceans Canada sent a final notice of collection letter to recipients in overpayment situations before it seeks income tax refund set-off with Canada Revenue Agency. The collection letter is the final stage to attempt to recover cases of overpayment.
• Approximately $949 thousand in repayments have been recovered since the final collection notice issuance through the Fisheries and Oceans Canada Collections.

BACKGROUND

• The Fish Harvester Benefit and Grant (FHBG) Program was part of the Government of Canada’s COVID response strategy. Launched in 2020, it provided support for non-deferrable business expenses and income support to self-employed fish harvesters and self-employed crew, not including the offshore sector.
• The FHBG Program was delivered in two phases. Phase One (2020) involved the issuance of one-time grant payments to provide emergency business expenses, and the first part of the benefit payment (60 per cent) to provide income assistance to eligible self-employed fish harvesters and self-employed crew. Phase Two (2021) involved confirming that applicant-attested information provided in phase one aligned with Canada Revenue Agency (CRA) data. If eligible, and with the successful submission of the phase two application, the Program issued the second part of the benefit payment (the remaining 40 per cent).
• Benefit payments were made at 75 per cent of income losses beyond a 25 per cent threshold for the 2020 tax year (when compared to 2018 or 2019). Payments were not to exceed a total combined first and second instalment amount of $10,164.
• To receive the Benefit, eligible fish harvesters were required to have:
o self-employed fishing income declines greater than 25 per cent in 2020, compared with their best year of 2018 or 2019, as reported to the CRA;
o a minimum of $2,500 in reported self-employed fishing income to the CRA in either 2018 or 2019;
o submitted an application for the second benefit payment, which was mandatory; otherwise automatically in an overpayment situation.
• Grant payments were based on a percentage of self-employed fishing income (in 2018 or 2019, as reported to CRA) up to $10,000. To receive the grant, eligible applicants must have had:
o self-employed income from commercial fishing activity in 2018 or 2019 of at least $5,000;
o a valid commercial fishing licence for 2020 (DFO or P/T), with landings reported against this commercial fishing licence for 2018 or 2019;
o a Unique Identifier issued by DFO to vessel master identified by an Indigenous communal commercial fishing enterprise.
• In some cases attested information did not align with the information applicants had previously filed with CRA, meaning that individuals had received FHBG funds for which they were not eligible. In all cases, there was a right to appeal findings.
• In January 2023, recipients in an overpayment situation were sent a reminder letter that they owed a portion or all of their initial benefit and/or grant payment, and were provided with instructions on how to inquire or proceed for repayment.
• In February 2023, with the assistance of Service Canada, recipients were called to remind them to repay the overpayment or how to obtain additional information.
• In June 2024, the department sent a final collection letter to recipients in overpayment situation before it seeks an income tax refund set-off with CRA. CFO sector will start sending files for CRA set-off at the end of September 2024 for recipients that have not responded or refuse to pay. Recipients that are raising concerns such as claiming that the payments have never been received will be thoroughly investigated and discussed with the recipient before files are officially sent for CRA set-off.
• Since the beginning of recovery efforts (2021–2022) over $5.7M from 1,122 individuals has been recovered. The current effort (collection letters) have yielded over $949k in repayments either in full repayment or through repayment plans.
 

If pressed on repayment notice
• Pursuant to Section 7 of the Financial Administration Act, the Treasury Board Directive on Public Money and Receivables requires departments to take timely and cost-effective collection actions to pursue receivables.
• The actions of the department are aligned with other collection efforts ongoing for other departments related to COVID relief programs such as the Canada Emergency Business Account program.
• Assisted by Employment and Social Development Canada, in January and February 2023, the Program conducted outreach efforts by mail and telephone to remind individuals who had past due overpayments about their repayment obligations.
• Overpayments occurred for a variety of reasons, including to individuals whose income losses were less than they had forecast, or for those found to have been ineligible for the Program. All had a right to appeal their overpayments. All appeal reviews are complete and considered final.
• Final repayment reminder notices advised debtors about remaining amounts owing, and that the Canada Revenue Agency set-off action is being considered for files that remain unpaid.
• The government set-off program was introduced as part of the government’s fiscal responsibility package in 1992 that allows an individual’s tax refunds and certain federal, provincial and territorial tax credits to be applied (“set-off”) against debts the individual owes to the Crown.
• The Chief Financial Officer expects to start sending files for Canada Revenue Agency set-off at the end of September 2024. A cautious approach will be used whereby it will start with confirmed overpayments where claimants have acknowledged receipt of funds but indicated they have no intention of repaying.
• Reported cases of fraud, payments never having been received, and appeals having overturned overpayments will all be thoroughly investigated by Fisheries and Oceans Canada and discussed with the recipient before files are officially sent for Canada Revenue Agency set-off.
• Amounts owing do not include the addition of any interest charges so as to minimize any confusion about amounts due and remain consistent with amounts indicated in previous communications;