Close X
Sunday, November 24, 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

Fifth Canadian dies in Israel after Hamas attacks

Fifth Canadian dies in Israel after Hamas attacks
Global Affairs Canada has confirmed the death of a fifth Canadian in Israel after a series of attacks by Hamas militants, while Canadians in the besieged Gaza Strip still have no way to get out. Three other Canadians who were in Israel when the attacks happened Oct. 7 are still missing, officials said Sunday. Global Affairs did not provide details of the fifth person who died or those who are missing, citing privacy reasons.  

Fifth Canadian dies in Israel after Hamas attacks

First group of Canadians leave West Bank for Jordan as those in Gaza brace for worst

First group of Canadians leave West Bank for Jordan as those in Gaza brace for worst
Joly made the announcement this morning on X, the platform previously known as Twitter, thanking the Global Affairs staff who she says worked around the clock to make it happen. The federal government says 21 Canadians and foreign nationals took a bus out of the West Bank, a Palestinian territory that Israel has occupied since 1967, and where it has established settlements.

First group of Canadians leave West Bank for Jordan as those in Gaza brace for worst

B.C. to bring in new rules on short-term rentals to create more housing

B.C. to bring in new rules on short-term rentals to create more housing
Premier David Eby says the number of short-term rentals has ballooned in recent years and the government is taking action to reduce “profit-driven mini-hotel operators” by bringing in new enforcement tools. Housing Minister Ravi Kahlon introduced the bill in the legislature today, saying there has been "an explosion" of short-term rental units and this legislation will target areas with high housing needs.

B.C. to bring in new rules on short-term rentals to create more housing

Man charged with murdering B.C. woman who went missing in 2022

Man charged with murdering B.C. woman who went missing in 2022
Police say that after an almost yearlong investigation, homicide investigators have determined that 57-year-old Jodine Millar was murdered. Millar was reported missing on Nov. 28, the same day police found her empty car after a crash on Highway 1.

Man charged with murdering B.C. woman who went missing in 2022

Suspicious fire guts B.C. elementary school, plans underway for students and teachers

Suspicious fire guts B.C. elementary school, plans underway for students and teachers
Coquitlam School District 43 says in a statement to families on its website that plans are in the works to support continued learning for the school community at Hazel Trembath Elementary School in Port Coquitlam. Coquitlam RCMP say they are investigating a suspicious fire at the school, which was fully engulfed when first responders arrived at the scene early Saturday.

Suspicious fire guts B.C. elementary school, plans underway for students and teachers

New Westminster's Balvir Singh charged with stabbing

New Westminster's Balvir Singh charged with stabbing
The Integrated Homicide Investigation Team says 57-year-old Balvir Singh of New Westminster was charged Saturday with second-degree murder. I-H-I-T is identifying the victim as 46-year old Kulwant Kaur of New Westminster.

New Westminster's Balvir Singh charged with stabbing