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

Profits, markups rose as competition weakened over 20 years: Competition Bureau

Profits, markups rose as competition weakened over 20 years: Competition Bureau
The Competition Bureau says profits and markups have increased over the last two decades as the state of competition in Canada has deteriorated. The bureau published a report Thursday analyzing how competition evolved across industries between 2000 and 2020.

Profits, markups rose as competition weakened over 20 years: Competition Bureau

Invest in Caribbean, leaders urge, as Trudeau promises new temporary worker program

Invest in Caribbean, leaders urge, as Trudeau promises new temporary worker program
Caribbean leaders gathered in Ottawa for a two-day summit this week are urging the Canadian private sector to invest more in the region. Their pleas came as Prime Minister Justin Trudeau announced on Thursday that Canada is creating a new temporary worker program for the fisheries industry.

Invest in Caribbean, leaders urge, as Trudeau promises new temporary worker program

'It's never easy': Suspect dead, police officer injured in Calgary shootout

'It's never easy': Suspect dead, police officer injured in Calgary shootout
Flashing lights and police tape encircled a strip mall in northeast Calgary late Wednesday afternoon after a shootout that sent a police officer to hospital and left one suspect dead. Police say tactical team officers were executing a high-risk warrant at McKnight Village, in the northeastern community of Falconridge, at about 1 p.m.   

'It's never easy': Suspect dead, police officer injured in Calgary shootout

Atmospheric river passes in southern B.C., but area rivers still rising

Atmospheric river passes in southern B.C., but area rivers still rising
Rainfall warnings across Vancouver Island and the inner south coast have lifted in most areas, but the effects of British Columbia's first atmospheric river of autumn could take a little longer to ease. The B.C. River Forecast Centre posted flood watches across western Vancouver Island and for the Englishman River near Parksville, warning of levels seen only once every 10 years on some waterways.

Atmospheric river passes in southern B.C., but area rivers still rising

Tentative deal ends job action by teaching support staff at Simon Fraser University

Tentative deal ends job action by teaching support staff at Simon Fraser University
Nearly 1,600 members launched job action on Sept. 26 after being without a collective agreement for 19 months, forcing the cancellation of tutorials, labs, lectures, office hours and the marking of assignments. Key issues included wages, class size and pensions for instructors.  

Tentative deal ends job action by teaching support staff at Simon Fraser University

Overdose homicide in Nanaimo

Overdose homicide in Nanaimo
Mounties in Nanaimo say they're investigating the fatal drug overdose of a woman back in March that they now believe was a homicide.  The Nanaimo R-C-M-P says its serious crime unit is looking into the death of 52-year-old Wendy Head, who was found dead at a home in the city on March 7th.   

Overdose homicide in Nanaimo