When the pandemic hit Canada, blanketing most of the country with lockdowns and shutdowns, the fast-introduced Canada Emergency Response Benefit, Canada Emergency Wage Subsidy and some other programs felt like a bit of an economic relief in a huge, terrifying storm.
With CERB, the money – a sum close to a minimal wage, which was yet to be taxed – allowed many people to sleep better at night without fearing losing roofs over their heads or worrying that their kids wouldn't have food on their plates. At the same time, CEWS allowed businesses to hold on to their employees and hopefully stay in operation for the future.
For quite a few people I know, those payments became a lifeline at a time when their jobs, professions and skills became temporarily obsolete due to a global state of emergency. I remember how proud I felt to be a part of Canada at the time because in my eyes, such an approach was evidence of the value of citizens' well-being for the state, as well as an understanding of the role of businesses.
However, even then, the technical side of the programs was a concern. It was rolled out really fast and seemed poorly organized. Questions about who would pay for those really necessary but also really costly measures, and how it would happen, were left without answers. (I was following the situation in a few other countries, and none of them had anything similar or as broad, leaving it up to employers to mitigate the storm or up to people to survive it however they could.)
We are many months away from that storm now, and the government has been tirelessly working on finding the answers. Unfortunately, those answers will bring a lot of disturbance to many Canadians.
The news about people having the CERB money recalled started coming up over a year ago, and a lot of the stories were heartbreaking. At the time when it all started, most people did their best to follow the guidelines and ensure they were eligible. They were laid off, couldn't provide their services or ship their goods due to restrictions, so they indeed needed that money to survive. And the government system confirmed it back then. So, they received thousands and sometimes tens of thousands of dollars over the course of those pandemic years.
Of course, when it comes to any subsidies or aid programs, I believe there are always going to be people abusing the system or just taking money because they formally can, not because they really need it. But most people who applied for the wage subsidy or any kind of benefits during the pandemic had no other real means to stay above water. Crisis always hits vulnerable sectors the worst and the poor get poorer.
There are more or fewer people taking advantage of support programs, depending on how the program is rolled out, but someone will always find a way to benefit, while for others it will be an instrument of survival and potentially a return to a better situation. But with the pandemic subsidies, it was obvious from the start that due to the rush with rolling it out, we'd see a big mess afterwards.
A portion of the summary was released Monday, revealing the scale of the mess with the CEWS, which reportedly distributed about $100 billion in wage subsidies over its course.
The Canada Revenue Agency reported that they are recalling millions of dollars distributed during the pandemic times. The report says the CRA has denied or adjusted $458 million in funds disbursed to employers through a pandemic-era wage subsidy program as a result of a partially-completed auditing process. (Most findings cover the period ending March 31, but the report also offers more up-to-date figures as of Sept. 29).
The report showed that the majority of employers that received the subsidy were highly compliant and that most claim adjustments were related to calculation errors and lack of documentation, rather than ineligibility. Similar situations occurred with many people receiving CERB, however, it didn't mean they didn't need to repay thousands they received, which for many of them would be crushingly expensive.
We did return back to normal some time ago, but most people and businesses haven't accumulated much since then to start paying for bureaucratic mistakes.
And while the CRA recalls are, de facto, an attempt to put taxpayers' money back into the budget, the government's rush with rolling out the programs now may once again tilt the scale for many individuals and businesses.
