Opening Statement before the Standing Committee on Public Accounts
Specific COVID-19 Benefits
(Report 10—2022 Reports of the Auditor General of Canada)
2 February 2023
Karen Hogan, Fellow Chartered Professional AccountantFCPA
Auditor General of Canada
Mr. Chair, thank you for this additional opportunity to discuss our report on specific COVID‑19 benefits, which was tabled in the House of Commons on December 6th, 2022. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinaabe people. Joining me today are Mélanie Cabana and Lucie Després, who were responsible for the audit.
This audit examined 6 COVID‑19 benefit programs intended to support individuals and employers through the pandemic. We looked at whether Employment and Social Development Canada and the Canada Revenue Agency managed these programs efficiently and effectively and whether they provided value for money outcomes. Our work also examined amounts paid to recipients and whether procedures to recover overpayments and payments made to ineligible recipients were timely.
For all the programs we audited, we found that $4.6 billion was overpaid to ineligible individuals. We also estimated that payments of at least $27.4 billion should be investigated further to confirm whether recipients were eligible. This includes $11.9 billion in benefits paid to individuals.
At the committee’s request, we are focusing today on benefits to support individuals. We concluded that Employment and Social Development Canada and the Canada Revenue Agency quickly delivered financial support to individuals. Programs that normally would have taken months or years to design were operational within weeks and helped those most affected by the pandemic. This included women, visible minorities, youth, and Indigenous people, as well as people who lost their jobs or otherwise suffered a marked drop in income. COVID‑19 programs were effective at preventing an increase in poverty, reducing income inequalities, and helping the economy bounce back.
To issue payments quickly, Employment and Social Development Canada and the Canada Revenue Agency decided to limit pre‑payment controls. This meant that they would have to do more work later to verify whether benefits paid were accurate and had gone to eligible individuals. This is consistent with international best practices for delivering support during an emergency.
As the pandemic continued and programs were extended and modified, the department and the agency added some pre-payment controls. However, for each program, some eligibility criteria still had no corresponding pre-payment control.
Given limited pre‑payment controls, Employment and Social Development Canada and the Canada Revenue Agency made the early decision to focus on post-payment verifications. However, we found that the number of planned post-payment verifications was low and that the department and the agency did not plan to verify all the payments to recipients identified as potentially ineligible.
In addition, because the department and the agency delayed post‑payment verification work as the pandemic continued, they are now at risk of not completing planned post-payment verifications within legislated time frames.
Efforts to collect amounts owing had been limited at the time of our report. As of summer 2022, approximately $2.3 billion of COVID‑19 benefit overpayments had been repaid.
As with the wage subsidy in support of employers, I am concerned about the limited progress in post-payment verification work for these programs. The federal government spent billions of dollars to help people in a time of crisis, and it does not know whether that money always went to eligible recipients. In the interest of being fair to all taxpayers, the government must carry out rigorous verification work. Regardless of the approach it takes, it must be clear and transparent with Canadians.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have. Thank you.