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

What overpayments were established and
collected for the COVID-19 benefits, which include the Canada Emergency Response
Benefit (CERB), the Employment Insurance Emergency Response Benefit (EI-ERB)
and the Canada Recovery Benefits (CRB) for 2023-2024?

The Government implemented an attestation-based approach to enable fast
delivery of emergency benefits to millions of Canadians.
 The Government understood when the CERB and later the CRB programs
were launched that this approach created the potential for some individuals
to receive overpayments in error, and in some cases deliberately through
fraud. This approach was taken to ensure that income support went to
vulnerable Canadians and residents as quickly as possible. It chose to
verify the eligibility of CERB and CRB recipients through strong post-
payment integrity measures currently being undertaken by the Canada
Revenue Agency (CRA) and Employment and Social Development Canada
(ESDC).
 Although individuals who have been determined to have received these
COVID-19 benefit payments in error will be required to repay the amounts
to which they were not eligible, there are no penalties or interest on these
debts. The CRA will also work with Canadians who have overpayments to
establish flexible repayment plans.
 The Government is committed to ensuring financial responsibility and
stewardship, while ensuring that low-income Canadians are not placed in
financial hardship.
 ESDC aims to fulfill its legal obligations by ensuring all reasonable
collection efforts are made before writing off debts, thereby maintaining
public trust in government programs. To improve recovery, a streamlined,
risk-based approach will be implemented, focusing on high-probability
accounts and leveraging income tax set-offs as an effective method for
reducing debts. The allowance of $6.0B includes deceased and vulnerable
individuals.

Recovery of debts
While there will not be any penalty or interest for workers if they received a payment in error,
they may be required to repay the benefits for which they were determined to be ineligible.
Under the Financial Administration Act, the CRA and ESDC have an obligation to take timely
and cost-effective collection actions to pursue amounts owed to the Government, including
debts resulting from CERB and CRB overpayments. Suspected cases of deliberate fraud are
being investigated and addressed as they arise.
Once debts are established, the CRA will work with clients to establish repayment schedules,
considering their ability to pay. This approach will take into account the financial circumstances
of the person, including deferral of debt for those who cannot repay at that time. Canadians also
have access to formal hardship assessments where repayment is not financially possible.
As of March 2024, there are more than $ 10.7 billion in COVID benefits overpayments. An
allowance for doubtful accounts as of March 31, 2024 of $6.0B was recorded in the financial
statements where recovery was considered uncertain at the time of preparation of these
statements.
Further pursuing collection activities will allow ESDC to meet its legal obligation pursuant to
Section 25 of the Financial Administration Act, the Debt Write-off Regulations, to ensure that all
reasonable collection action has been taken and all possible means of collection have been
exhausted, prior to write-off. This will support the essential activities of recovering overpayments
to ensure the public’s trust in the Government and to uphold the stewardship of public funds.
The Government of Canada publicly noted from the beginning that there would be validation to
verify COVID-19 benefits eligibility, and the requirement to pay if deemed ineligible. Establishing
and recovering overpayments is critical to maintaining the public’s trust in long-term
sustainability of its programs.
Also, the collection efforts will be streamlined for all COVID-19 benefits programs focused on
accounts with a higher probability of resolution. The CRA has committed to a risk-based
approach focusing on debt with the greater likelihood of recovery. However, benchmarking
against past collection rates is challenging due to the unique nature of these programs. Income
tax reimbursements and certain tax credits will be applied as set-offs against debts to the Crown
where possible. Focusing on set-offs, figures indicate that income tax set-offs have been an
effective means of reducing debt.

The Government of Canada created the Canada Emergency
Response Benefit (CERB) in response to the unprecedented number
of job losses across the country as public health measures were
imposed, businesses were shut down and schools were closed due
to the global COVID-19 pandemic. As part of the CERB program,
those that self-identified as workers were able to apply for the EI
Emergency Response Benefit (EI-ERB). CERB was delivered on
behalf of ESDC by the Canada Revenue Agency (CRA), and EI-ERB
was delivered by ESDC.
 The Canada Recovery Benefits were established in the fall of 2020
after the CERB benefit period ended. These benefits were to provide
assistance to the many people that continued to feel the impacts of
COVID-19 pandemic issues. This was delivered on behalf of ESDC,
by the CRA.
 In the consolidated financial statements of the Government of
Canada for the fiscal year 2023-2024, outstanding accounts
receivable of $10.7B were recorded regarding the COVID-19 Benefits
with an allowance of $6.0B leaving net receivables of $4.7B. These
include the Canada Emergency Response Benefit (CERB), the
Employment Insurance Emergency Response Benefit (EI-ERB) and
the Canada Recovery Benefits (CRB) overpayments.