Question Period Note: PUBLIC ACCOUNTS OF CANADA 2024 FOR EMPLOYMENT AND SOCIAL DEVELOPMENT CANADA

Can
you explain the total amount of $594.1 million in debts written off, forgiven or remitted
that were reported by the Department in 2023-2024?

 The Department has many processes in place to collect outstanding
debts.
 The Department collects outstanding debts by offsetting them against
program benefits.
 The Department also uses the services of the Canada Revenue Agency
(CRA) to collect outstanding debts.

All write-offs, forgiveness and remissions are done in accordance with
the Financial Administration Act (FAA), program specific legislation
and Treasury Board policies.
 Debt write-offs, forgiveness’s and remissions are a last resort.

The Department’s total amount of debts written off, forgiven, or remitted in 2023-2024 is $594.1
million compared to $556.7 million in 2022-2023. The increase of $37.5 million is directly related
to the significant increase of Canada Student Financial Assistance (CSFA) forgiveness and Old
Age Security (OAS) remissions.
The total amount of debts written off, forgiven, or remitted for 2023-2024 comprise the following
items:
 $212.5 million ($220.6 million in 2022-2023) relates to the write-off of direct
student loans in accordance with section 25(2) of the Financial Administration Act
(FAA). The main reasons for write-off include statute of limitation, bankruptcy and
compromise settlement;
 $247.5 million ($196.3 million in 2022-2023) relates to the forgiveness of CSFA
accounts in accordance with the Canada Student Financial Assistance Act ($245.4
million), the Canada Student Loans Act ($1.6 million) and the Apprentice Loan Act
($0.5 million). Loans are forgiven in cases of death or permanent disability of the
borrower as well as under the Repayment Assistance Plan (RAP). The increase in
forgiveness’s can be explained by the changes made to the RAP in November 2022
to increase the income thresholds and overall eligibility to the program and by the
processing of a backlog of deceased accounts following the implementation of an
automated process;
 $71.0 million ($93.3 million in 2022-2023) relates to the write-off of Employment
Insurance (EI) overpayments and penalties in accordance with the Employment
Insurance Act. Most of these write-offs are due to the expiry of the legislated statute
of limitation. The number of accounts written-off increased, however the dollar value
of those accounts decreased;
 $25.2 million ($35.9 million in 2022-2023) relates to the write-off of various debts
in accordance with section 25(1) of the FAA. The majority of the debts written off are related to the Wage Earner Protection Program (WEPP) ($7.9 million), previous
CSFA regimes ($5.6 million of guaranteed loans issued between 1964 and 1995
and $2.7 million of risk-shared loans issued between 1995 and 2000) and Covid19
benefits ($4.7 million);
 35.8 million ($7.9 million in 2022-2023) relates to the remissions of Old Age
Security (OAS) overpayments in accordance with the Old Age Security Act. The
increase stems mainly from activities to reduce the backlogged inventory
accumulated during the pandemic and the clean-up undertaken in preparation for
the migration to the upcoming program benefit system. In addition, many
overpayments due to an error in 2022 in the transmission of income data for the
2020 year were remitted in 2023-2024; and
 $2.1 million ($2.7 million in 2022-2023) relates to the remissions in accordance with
section 23(2.1) of the Financial Administration Act (FAA) for debts related to the Canada
Emergency Response Benefit (CERB) and Employment Insurance Emergency
Response Benefit (EI-ERB), Canada Emergency Student Benefit (CESB) and the onetime
payment to remit debts incurred by two appointees to the National Advisory Council
on Poverty and Chief Accessibility Officer as a result of administrative error.

In Volume III of the Public Accounts of Canada 2024, the Department
reported a total amount of $594.1 million in debts written off, forgiven
or remitted, an increase of $37.5 million compared to 2022-2023 ($556.7
million).