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    • CRA head says it 'wouldn't be worth the effort' to review all ineligible pandemic payments

    The Canada Revenue Agency sign outside the National Headquarters at the Connaught Building in Ottawa is seen on Monday, March 1, 2021. (THE CANADIAN PRESS/Justin Tang) The Canada Revenue Agency sign outside the National Headquarters at the Connaught Building in Ottawa is seen on Monday, March 1, 2021. (THE CANADIAN PRESS/Justin Tang)
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    The head of the Canada Revenue Agency (CRA) says it "wouldn't be worth the effort" to fully review $15.5 billion in potentially ineligible pandemic wage benefit payments flagged by Canada's Auditor General.

    "We take generally almost exclusively an approach within the agency to focus on a risk-based assessment," CRA Commissioner Bob Hamilton told members of Parliament Thursday afternoon. "So, take a look at the information that we have at our disposal, try to identify where the highest risks are, and go after those and the highest risk and the potential for recovery, and not cover 100 per cent of people."

    Hamilton appeared before the on Thursday alongside auditor general Karen Hogan.

    "We don't take issue with the risk-based approach the [CRA]'s made," Hogan said during the . "It's really the amount of work, the extent of work, that we don't believe is sufficient in order to meet sort of that fairness threshold of treating every taxpayer—whether they be an individual or business—fairly."

    In December, Hogan's office tabled a performance audit that identified an estimated $4.6 billion in benefit over-payments to ineligible individuals. The audit also highlighted approximately $27.4 billion in payments to individuals and employers that should be "investigated further" for potential ineligibility, including $15.5 billion that was paid out through the Canada Emergency Wage Subsidy (CEWS) program, which was the topic of Thursday's committee meeting.

    "The first step is to identify payments to ineligible recipients, then the decision can be made to go after collection or not collection," Hogan told lawmakers. "I just encourage the government to be a lot more transparent with what they're doing, and I think they need to do more work."

    For his part, Hamilton took issue with calculations in the audit, saying that the true amount of ineligible payments is expected to be "significantly lower" than the Auditor General's "overestimate," which was based on sales tax data.

    "It's too early to estimate the amount of money overpaid," Hamilton said at one point, speaking through an interpreter in French. "But we do have experience [and] we're able to say that about six per cent of businesses or individuals received money but were not eligible."

    The CEWS went directly to employers to help keep employees on payrolls during the COVID-19 pandemic. The $100.7 billion program accounted for nearly half of the estimated $210.7 billion the Liberals spent on COVID-19 aid, which also included the Canada Emergency Response Benefit (CERB) and its successor program, the Canada Recovery Benefit (CRB), which went directly to individuals.

    "In my view, based on what we've seen so far, it wouldn't be worth the effort," of investigating all of the $15.5 billion in potential ineligible wage subsidies outlined by the auditor general. "Based on our evidence to date, we see businesses generally complying… We have some pockets of people that have intentionally misled and we're pursuing those."

    Focusing on "claims that are most likely to be ineligible or overstated," Hamilton explained, "optimizes recoveries and ensures that high risk claims are addressed while making efficient use a CRA resources."

    In December, the auditor general's office took aim at the government's reliance on attestations and applicants' honesty for benefit eligibility, and said authorities were "falling short" when it came to post-payment verification.

    "In this instance, there was very limited prepayment controls with the intention of doing rigorous post-payment work," Hogan said Thursday. "The only way you can find out whether or not a business is eligible would be to do that post-payment work, because there is no other information to verify eligibility."

    Former Liberal finance minister Bill Morneau has been a vocal critic of the government's pandemic-related spending. In his new book Where to From Here, Morneau claims Prime Minister Justin Trudeau and his advisors regularly overruled recommendations from his department in favour of larger pandemic payouts and political points, which contributed to Morneau resigning from his post in August 2020. He cites the example of the CEWS and seeing the prime minister announce an amount of funding that was "significantly higher" than what he thought they had agreed on.

    "It was one of the worst moments of my political life," Morneau writes. "During the period when the largest government expenditures as a portion of GDP were made in the shortest time since the advent of World War II, calculations and recommendations from the Ministry of Finance were basically disregarded in favour of winning a popularity contest."

    With files from Â鶹´«Ã½ Senior Digital Parliamentary Reporter Rachel Aiello

    Correction

    This story has been updated to correct when Bill Morneau resigned. 

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