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

Series of fires outside Mission

Series of fires outside Mission
The Mounties say police and firefighters responded Wednesday evening to a report of a structure fire on a vacant property along Gunn Avenue and found several buildings on fire, with indications that the blazes had been set intentionally. They say police responded to flames on a different property along the same road yesterday and again found they appeared to have been sparked intentionally.

Series of fires outside Mission

B.C. COVID-19 hospitalizations up 58% in two weeks, as infections, deaths also spike

B.C. COVID-19 hospitalizations up 58% in two weeks, as infections, deaths also spike
COVID-19 cases are on the rise in British Columbia, with the BC Centre for Disease Control reporting hospitalizations have increased 58 per cent in the past two weeks. The centre says in its latest update that deaths due to COVID-19 are also trending upwards, with 24 fatalities in the last week of September, compared to nine in the second week of August. 

B.C. COVID-19 hospitalizations up 58% in two weeks, as infections, deaths also spike

Spike in Vancouver's homeless count

Spike in Vancouver's homeless count
The count by the Homelessness Services Association of B-C was done on March 7th and 8th -- and identified just under five thousand people in 11 communities, up from the roughly 36-hundred identified in the March 2020 count.

Spike in Vancouver's homeless count

Surrey business community grapples with police tax

Surrey business community grapples with police tax
Business leaders in Surrey are pleading with the province to provide a clear plan as the city grapples with the next stage of implementing a new police force. The Surrey Board of Trade has sent a letter to Public Safety Minister Mike Farnworth saying the city needs a solid policing strategy with adequate wraparound support services and infrastructure as it juggles the costs of the outgoing R-C-M-P and incoming Surrey Police Service.

Surrey business community grapples with police tax

B.C. sets out law to ban use of illegal drugs in many public places

B.C. sets out law to ban use of illegal drugs in many public places
British Columbia is setting out new rules as it attempts to navigate a way to curb the overdose crisis with drug decriminalization. Possession of small amounts of many illicit drugs was decriminalized in B.C. in January after the federal government issued an exemption, but legislation introduced by the province today would make their use illegal in many public spaces. 

B.C. sets out law to ban use of illegal drugs in many public places

'Extremely fluid': Liberals and NDP haven't yet agreed on promised pharmacare bill

'Extremely fluid': Liberals and NDP haven't yet agreed on promised pharmacare bill
The federal New Democrats have rejected the first draft of the Liberals' pharmacare legislation, in what the health minister describes as "extremely fluid" negotiations over the highly anticipated bill. The Liberals promised to table pharmacare legislation this fall as part of the supply-and-confidence deal the government struck with the NDP.

'Extremely fluid': Liberals and NDP haven't yet agreed on promised pharmacare bill