Close X
Friday, November 15, 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

Tensions between Canada, India escalate following Ottawa's accusation over killing

Tensions between Canada, India escalate following Ottawa's accusation over killing
Tensions between Canada and India worsened today following Prime Minister Justin Trudeau's claim that India may have been involved in the killing of a Canadian citizen. India halted all visa services for citizens of Canada and said it anticipates Ottawa will reduce its diplomatic presence in India. 

Tensions between Canada, India escalate following Ottawa's accusation over killing

Man punches 2 women

Man punches 2 women
A 32-year-old man has been arrested after a series of random assaults in West Vancouver yesterday. West Vancouver Police say officers responded to reports of a man aboard a transit bus punching two senior woman in their heads before repeatedly punching the driver.  

Man punches 2 women

Most Canadians view about Online News Act is news should be free, survey suggests

Most Canadians view about Online News Act is news should be free, survey suggests
The law, which comes into effect later this year, will force digital giants such as Google to compensate media outlets for content that is shared or otherwise repurposed on their platforms. About three out of every four respondents said they were aware of the Online News Act, formerly known as Bill C-18, with 34 per cent of respondents saying the law is a good thing to help media outlets that compete for advertising dollars with tech giants.  

Most Canadians view about Online News Act is news should be free, survey suggests

Canada on track to meet, exceed methane emission reduction goal by 2030: Trudeau

Canada on track to meet, exceed methane emission reduction goal by 2030: Trudeau
Canada is on track to hit and even surpass targets for reducing oilpatch methane emissions, Prime Minister Justin Trudeau said Wednesday, as the UN sought to hold leaders to account for their climate commitments. Draft regulations that are due before the end of the year will allow Canada to meet or even exceed its goal of slashing methane from the oil and gas sector by 75 per cent from 2012 levels by 2030.

Canada on track to meet, exceed methane emission reduction goal by 2030: Trudeau

Poilievre introduces housing bill, plan focuses on getting cities to build more homes

Poilievre introduces housing bill, plan focuses on getting cities to build more homes
Conservative Leader Pierre Poilievre has introduced a private member's bill in the House of Commons that outlines a plan to address the national housing crisis.  The bill, which is unlikely to pass, centres around using federal infrastructure and transit spending to push cities to build more homes.  

Poilievre introduces housing bill, plan focuses on getting cities to build more homes

Vancouver police boost security at Indian Consulate since Trudeau remarks on killing

Vancouver police boost security at Indian Consulate since Trudeau remarks on killing
Const. Tania Visintin, the department's media relations officer, says police are "closely monitoring the situation" since Trudeau's announcement about the killing of Hardeep Singh Nijjar, a vocal supporter of an independent Sikh homeland, who was shot dead in Surrey in June. She says Vancouver police aren't aware of any specific threats to Indian consular officials, but have increased police presence at the downtown Vancouver consulate.   

Vancouver police boost security at Indian Consulate since Trudeau remarks on killing