Canada's government needs to recover billions in overpaid COVID benefits -audit

By Ismail Shakil

OTTAWA (Reuters) -Some C$4.6 billion ($3.4 billion) of Canada's COVID-19 relief ended up in ineligible hands and the federal government may be running out of time to recover those funds, the auditor general said on Tuesday.

Prime Minister Justin Trudeau's Liberal government doled out over C$212 billion in direct emergency measures for Canadians and businesses to support the economy as the pandemic forced widespread lockdowns and job losses.

While the audit found that about C$2.3 billion in overpayments had been recovered through voluntary repayments as of summer 2022, it recommended further inquiries into at least around C$27.4 billion of payments to individuals and employers, on top of the C$4.6 billion found to have been overpaid.

The government relied on information provided by applicants and limited pre‑payment controls to expedite pandemic aid, which meant a risk that some payments would go to ineligible recipients, Auditor General Karen Hogan said in a statement.

Ottawa planned to verify the payments after the money had been paid, but required that verifications be done within 36 months for most programs. The legislated timeframes to verify recipients' eligibility means "time may be running out" for the government, according to the audit.

"I am concerned about the lack of rigour on post-payment verifications and collection activities," Hogan said.

The main opposition Conservative party said the government's "wasteful spending" contributed to high inflation, which has edged down to 6.9% in October after touching a four-decade high in June.

Conservative lawmaker Jasraj Hallan told reporters in Ottawa the lack of controls identified by the auditor general had contributed to "this mess that taxpayers will be forced to pay".

The government must "act now to expand their post-payment verification plans", Hogan said, before seeking to recover the rest of the money owed.

National Revenue Minister Diane Lebouthillier defended the strategy, saying a quick roll-out of COVID support measures had been necessary and was "the only way to proceed" as many people had lost jobs and money had to quickly reach their banks.

Criminals globally have taken advantage of COVID support measures instituted by several countries.

In September, a U.S. watchdog said that fraudsters likely stole $45.6 billion from the United States' unemployment insurance program during the pandemic by applying tactics like using the Social Security numbers of deceased individuals.

($1 = 1.3661 Canadian dollars)

(Reporting by Ismail Shakil in OttawaEditing by Bernadette Baum and Mark Heinrich)