Canada’s Employment Department wrote off millions in unrecoverable pandemic relief cheques paid to ineligible claimants, but won't disclose taxpayer losses, according to Blacklock’s.

Managers identified $3.23 billion in ineligible CERB payments to 1,890,151 Canadians already on Employment Insurance. As of March 31, 1,689,004 debtors have repaid fully or partially.

On March 25, 2020, Parliament passed the Canada Emergency Response Benefit Act, providing $2,000 monthly to jobless tax filers facing eviction or foreclosure.

In a report to the Senate national finance committee, the government knew the risks, balancing them with a "risk-based integrity framework," managers claimed.

The Canada Emergency Response Benefit Post-Payment Verification report showed $2.71 billion in outstanding debts that were both unrecoverable, due to reasons like uncommunicated debts, deceased debtors, or financial hardship, or funds that have already been repaid.

Employment department managers testified they warned cabinet that approving payments with minimal checks would be costly. "We knew," then-deputy minister Graham Flack testified at 2021 Commons public accounts committee hearings.

Flack clarified "it wasn't an error," but a "known design flaw," as real-time reconciliation wasn't feasible for the benefit's launch.

Budgeted for $24 billion, CERB payouts reached $81.6 billion, according to Blacklock’s. Numerous audits failed to document the $57.6 billion discrepancy.

"People were losing their homes and needed help, but claims were made by others who were ineligible or didn't really need it," Conservative MP Kelly McCauley said. "I want… a proper, transparent audit. We owe it to taxpayers."

Cabinet accepted fraud as inevitable. In 2021, Liberal MP Kevin Lamoureux admitted rapid program creation invites abuse, anticipating Conservative criticism. "There is no doubt that when creating a program as quickly as we did, there is going to be some abuse of that program."

A 2023 Department of Employment memo noted Service Canada would take a "risk-managed approach" to CERB investigations due to subjective criteria and investigative burden, without detailing recovery amounts for fraudulent claims.

A $1.2 million payout to 391 deceased individuals included identity theft attempts. Despite identity verification via the Social Insurance Register and non-processing of applications for registered deaths, these payments occurred.

In 2023, the government explained the payments to prisoners by suggesting inmates either received payments before incarceration or used an address other than their institution to claim CERB.

Over 190,000 people also quit their jobs during the pandemic to take a "CERB vacation."

The Canada Revenue Agency acknowledged last year it was aware of $10 billion being distributed to ineligible applicants. Only a fraction has been recovered, with billions in losses to be expected.

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