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

Victoria police looking for suspects in possible arson

Victoria police looking for suspects in possible arson
Police in Victoria say they're looking for two women who may have seen the suspect or suspects in a possible arson over the weekend. They say officers responded Saturday evening to reports of two fires inside a retail store, where staff used fire extinguishers to douse the initial flames.

Victoria police looking for suspects in possible arson

Man rams SUV into police cruiser

Man rams SUV into police cruiser
B-C's police watchdog has found a man who rammed his S-U-V into a police cruiser outside a Vancouver Island R-C-M-P detachment last spring was not seriously injured when he was hit by a single police bullet. One officer was also injured in the incident last May.

Man rams SUV into police cruiser

Champagne to announce initial commitments from grocers to stabilize prices today

Champagne to announce initial commitments from grocers to stabilize prices today
Industry Minister François-Philippe Champagne says he is ready to announce the initial commitments he has secured from grocers to stabilize food prices. The Liberal government called on Canada's major grocers last month to present a plan to stabilize prices by Thanksgiving, or face consequences.  

Champagne to announce initial commitments from grocers to stabilize prices today

Competition intensity has decreased over last two decades, Competition Bureau finds

Competition intensity has decreased over last two decades, Competition Bureau finds
Competition Bureau commissioner Matthew Boswell says new research from the bureau finds the competition intensity in the country has decreased over the last two decades. Boswell shared the initial findings of a new report during a speech he delivered Thursday at the Competition Summit, a conference hosted by the bureau.

Competition intensity has decreased over last two decades, Competition Bureau finds

Trudeau says he never suggested those worried about 'parental rights' are hateful

Trudeau says he never suggested those worried about 'parental rights' are hateful
Prime Minister Justin Trudeau said Thursday he never suggested that individuals concerned about their rights as parents were hateful when he issued a statement in response to the thousands who attended recent protests about "gender ideology" in schools.  

Trudeau says he never suggested those worried about 'parental rights' are hateful

Drug seizure at Surrey border: CBSA

Drug seizure at Surrey border: CBSA
Mounties in B-C are recommending numerous charges against an Edmonton man after a drug seizure at a Canadian border crossing in Surrey. The Canada Border Services Agency says the driver was arrested and officers seized roughly 65 kilograms of cocaine at the crossing last July after a detector dog raised the alarm during a commercial truck examination.

Drug seizure at Surrey border: CBSA