COVID-19 benefit repayment is hurting low-income Canadians, report says
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report → hurt → Canadians
Think-tank says collecting debts from ineligible recipients is costly, ineffective
Over six years after the COVID-19 pandemic started, the federal government is still trying to track down billions of dollars sent to Canadians who were later found to be ineligible for benefits.
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who → say → benefits
According to a report from Maytree, a think-tank and advocacy group that studies poverty, those recollection efforts disproportionately affect low-income Canadians who can't pay, and ultimately cost more than they recover.
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they → accord → more
It calls for an end to the government's efforts to recover pandemic benefits.
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It → call → benefits
In total, Ottawa distributed about $14 billion in COVID-related benefits to individuals who didn't meet the Canada Revenue Agency's income requirements.
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who → distribute → requirements
Most of that sum was provided under the Canada emergency response benefit (CERB) and later the Canada recovery benefit (CRB).
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Most → provide → benefit
By the end of last November, the CRA reported that $10 billion was outstanding, over $8 billion of which was owed on CERB and CRB payouts.
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billion → report → payouts
CBC News reached out to the CRA for updated figures, but the agency was unable to provide them after more than two weeks of requests.
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agency → reach → requests
"This is not a story about fraud," the report says.
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report → say → fraud
"It is a story about what happens when a government moves fast, makes mistakes and then hands the bill to the people least able to pay it."
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government → happen → it
John Stapleton, co-author of the Maytree report and a social policy expert, says his group acknowledges some people knowingly applied for benefits they shouldn't have received.
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they → say → benefits
"We're not asking them to absolve those people," he said.
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he → ask → people
"[But] there's some people out there that got caught in this net who are really suffering as a result."
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who → be → result
In Budget 2025, Ottawa provided $123 million to support the government's collection of its pandemic response benefits over two years, starting in 2026-27.
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Ottawa → provide → 2026
According to Stapleton and Tyler Meredith, a senior fellow at the Munk School of Public Policy and a fellow at Maytree, many Canadians who still owe a debt on pandemic benefits are low-income.
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who → accord → benefits
"By the time you asked them to repay that benefit, they would have already, frankly, used that money," Meredith said.
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Meredith → ask → money
"It was always clear, I would argue, that the intent of the program was to be for people who had lost income," Meredith said.
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Meredith → argue → income
While he said the government needed to provide certainty to Canadians that support was there if they needed it, the program was misunderstood as a form of universal income.
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program → say → income
CRA reversed $246M in pandemic benefit debts after thousands contested eligibility status
Canadians told to pay back CERB say eligibility requirements were unclear
"Most people don't check the fine print," Meredith said.
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Meredith → reverse → print
Applicants had to have earned at least $5,000 in income in the last 12 months, lost income as a result of the pandemic and not been receiving EI in order to be eligible.
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Applicants → have → order
They received $2,000 every four weeks.
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They → receive → 2,000
CERB 'didn't have a plan for recovery'
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CERB → have → recovery
Meredith said the government didn't have a plan to recover ineligible benefit payouts when it was initially launching its pandemic relief programs.
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it → say → programs
"Our goal, in all of the programs we were designing, was to have something that was like 80 to 85 per cent ready, knowing that we would amend and adjust the program as we went," Meredith said.
"
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Meredith → design → program
We just didn't have time to wait."
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We → have → time
According to Meredith, the government's initial plan was to deliver benefits by traditional means like through the quarterly GST tax credit — now the groceries and essentials benefit — or Canada's employment insurance system.
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plan → accord → credit
But Meredith said the EI system would have been overwhelmed as millions of Canadians were set to lose work during the pandemic.
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millions → say → pandemic
Because of this, the government drafted the Canada Emergency Response Benefit Act to create a new system, legislation Meredith said was put together in "a matter of a couple days."
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Meredith → draft → days
Federal COVID-19 vaccine, benefits rollout swift but wasteful: AG
More than 1,000 Canadians take CRA to court over pandemic payments — and some win
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some → take → payments
The government allows for interest-free repayment over time.
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government → allow → time
But CERB's legislation "doesn't have a mechanism inside it to say the government is permitted, or CRA's officials are permitted, to entertain some form of settlement," Meredith said.
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Meredith → have → settlement
"From their point of view, their hands are tied."
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hands → tie → view
"The Federal Court has confirmed that the CRA is required to apply the eligibility criteria established by legislation and does not have discretion to depart from those requirements," the CRA told CBC News in a written statement.
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CRA → confirm → statement
The CRA said it is not legally obligated to pursue all ineligible CERB payments.
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it → say → payments
According to Employment and Social Development Canada (ESDC), the CRA can allow payment deferrals if a client is facing financial hardship.
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client → accord → hardship
If it determines that hardship is permanent, the CRA can recommend a debt for writeoff to ESDC.
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CRA → determine → ESDC
Can Ottawa dissolve the debt?
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Ottawa → dissolve → debt
But Meredith says simply writing off the remaining debt owed by those ineligible for benefits is "not a realistic option" and "probably politically unpalatable for any government, at any point in time."
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writing → say → time
He pointed to the government's use of partial forgiveness on loans from the Canada emergency business account program (CEBA) as a possible guide, and suggested it develop an option to "spread out repayment costs over a much longer period of time."
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it → point → time
In its report, Maytree outlined a plan to wind down the collection of pandemic benefits along a suggested timeline.
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Maytree → outline → timeline
…and 5 more, not listed.
The Aporia
