Close X
Sunday, November 10, 2024
ADVT 
National

CRA claws back $458 million in pandemic-era wage subsidies after partial audit

Darpan News Desk The Canadian Press, 20 Nov, 2023 05:49 PM
  • CRA claws back $458 million in pandemic-era wage subsidies after partial audit

The Canada Revenue Agency 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.

The agency is releasing a report Monday that offers detailed findings of its audits of the Canada Emergency Wage Subsidy Program. The bulk of the findings cover the period ending March 31, but the report also offers more up-to-date figures as of Sept. 29.

The CEWS program subsidized businesses' staff wages by 75 per cent in hopes of encouraging companies to hold on to their employees during the COVID-19 pandemic, as governments enacted shutdowns. 

Overall, the program disbursed about $100 billion in wage subsidies.

A report from auditor general Karen Hogan last year warned that thousands of businesses that received wage subsidies may not have been eligible for the program, after finding their GST and HST filings didn't show a sufficient drop in revenue to qualify.

Monday's report finds the majority of employers that received the subsidy were highly compliant. Most claim adjustments were related to calculation errors and lack of documentation, rather than ineligibility. 

Out of the $5.53 billion worth of audits completed by the end of March, $325 million in claims were reduced or denied.

And the audits that overlapped with claims flagged by the auditor general found $134.5 million that needed to be adjusted or rejected. The report says insufficient revenue decline accounted for 14 per cent of those adjustments.

The total claims adjusted or denied rose to $458 million by the end of September. 

"Our reading of the results is they show a high level of compliance overall by the majority of employers who applied and received the wage subsidy, including those who were identified by the auditor general," Cathy Hawara, the assistant commissioner of the compliance branch at the Canada Revenue Agency, said in an interview.

The agency, however, did find significant problems with claimants who used a third party to prepare their applications, with 85 per cent of audits for such claims resulting in funding being reduced or denied.

The CRA says some aggressive non-compliance has been found in cases in which claimants are suspected of using intermediaries "who knowingly facilitated the production of inaccurate or wilfully non-compliant claims."

The report says the vast majority of these cases were linked to small businesses with 25 or fewer employees.

"It should be noted that although this report focused on CEWS results to date, many of these preparer-linked claimants also applied for the Canada Emergency Rent Subsidy ... which have been identified for review," the report said.

The CRA says it has already applied more than $15 million in penalties in relation to these files as of the end of September.

Hawara said that while intermediaries like accountants are often an important part of the tax system, the agency conducts audits specifically targeted at weeding out third-party preparers who may be skirting the law. 

"We're satisfied with what we're seeing in terms of both the overall level of compliance by the vast majority of employers, but also, we believe we've identified the right risks. And we're tackling them now," Hawara said. 

The agency says the audits have resulted in some cases being referred to its criminal investigations program as well.

The CRA's audit of the program is ongoing and is expected to continue until at least 2025.

 

MORE National ARTICLES

Trudeau says India's move against Canadian diplomats should concern the world

Trudeau says India's move against Canadian diplomats should concern the world
India's move to reduce the presence of Canadian diplomats in its country are "contrary to international law," Prime Minister Justin Trudeau said Friday, and the rest of the world should be concerned about its consequences. Foreign Affairs Minister Mélanie Joly said Thursday that Canada had removed most of its diplomatic presence from India after New Delhi threatened to strip diplomatic immunities from them and their families.

Trudeau says India's move against Canadian diplomats should concern the world

Hit and run in North Vancouver

Hit and run in North Vancouver
Mounties in North Vancouver say they are looking for witnesses and footage as they investigate a hit-and-run that left a pedestrian with serious injuries on Wednesday night. North Vancouver R-C-M-P say they were called to the scene after passersby found a North Vancouver man in his late 40s lying injured on the road. 

Hit and run in North Vancouver

High school student arrested, knife found

High school student arrested, knife found
Police in New Westminster say a student at a city high school was arrested Wednesday after being found in possession of a knife. Police say an officer was at New Westminster Secondary on Wednesday morning for an unrelated reason, and told there was a student with a knife who was causing a disturbance. 

High school student arrested, knife found

RCMP tells owners to turn in guns after banned fully automatic model sold in Canada

RCMP tells owners to turn in guns after banned fully automatic model sold in Canada
The RCMP has told owners to turn in what the force is calling fully automatic military surplus firearms after hundreds were misidentified and allowed into Canada for commercial sale. The Mounties say the registrar of firearms immediately froze records relating to the 245 prohibited guns upon discovery of the issue to prevent further sale or transfer of the firearms.  

RCMP tells owners to turn in guns after banned fully automatic model sold in Canada

Police involved shooting in West Kelowna

Police involved shooting in West Kelowna
The Independent Investigations Office is investigating a police-involved shooting in West Kelowna this afternoon where one man was injured.  The R-C-M-P says police were responding to reports of gunshots and a man with a weapon in a vehicle.

Police involved shooting in West Kelowna

Pedestrian struck and killed in Vancouver

Pedestrian struck and killed in Vancouver
Police are investigating after a pedestrian was struck and killed by a car in Vancouver's Downtown Eastside today. Police say two cars collided at an intersection just before 11 this morning, and one of the cars jumped the curb and he the person on the sidewalk.  

Pedestrian struck and killed in Vancouver