Recovering $2 billion from cheaters who took a 'CERB vacation' would create 'undue burden,' feds say

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• By Tamara Ugolini

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Over 190,000 people quit their jobs to take a "CERB vacation" when the federal government was sending out monthly $2,000 payments to support those affected by the outbreak of the COVID-19 pandemic. 

Now, the government says recovering the nearly $2 billion from people who cheated the Canada Emergency Response Benefit (CERB) program would prove an "undue burden."

According to Blacklock's Reporter, a Department of Employment memo from earlier this year stated, "Due to the subjective nature of the criteria, the difficulty of proving eligibility after the fact and undue burden that investigation would create, Service Canada will apply a risk managed approach to these cases." The memo did not detail how much the federal government intends to recover of the funds that were fraudulently obtained.

CERB, which was passed by Parliament in 2020 in the Canada Emergency Response Benefit Act, was intended to protect newly unemployed Canadians from eviction or foreclosure. But within the first year of the benefit's implementation, it was clear that not everyone claiming it was an intended beneficiary of the program.

According to Blacklock's:

“We have had numerous reports from clients and friends where former employees prefer to be on a CERB vacation rather than returning to work,” Kim Moody, CEO of Moodys Tax Law LLP of Calgary, testified at 2020 hearings of the Commons human resources committee. “We are seeing and experiencing this, especially with part-time employees.”

Liberal MP Wayne Long (Saint John-Rothesay) told 2020 committee hearings he also knew of employers who could not keep staff due to pandemic relief payments. “They’ve dealt with some employees saying, ‘Well, I’m still on the CERB and I don’t really want to come back to work right now,’” said Long.

In response to reports there were unintended recipients of CERB, the Department of Employment said it made the criteria stricter. Associate assistant deputy minister Elisha Ram testified in 2020 that the government would be able to demand the funds back.

"There will be the possibility for the government after the fact, if there is some suspicion an application has been made mistakenly or with intent to defraud the government, we can go back and ask the individual to explain how they were eligible,” he said. 

Parliament budgeted the program at $24 billion, though final costs ended up at $81.6 billion. There has not yet been a full accounting of the discrepancy. Earlier this year, Blacklock's also reported that 49 Employment employees were fired related to the fraudulent obtaining of CERB payments.

The same federal memo, Briefing Binder, also confirmed that the program paid $6.1 million in benefits to 1,522 prisoners. $3.3 million was paid to 704 claimants who did not live in Canada, with $2.2 million going to 434 children under age 15. All these were ineligible under the Act to receive CERB.

Last year, the government explained the payments to prisoners by suggesting that the inmates either began receiving payments prior to their incarceration or used an address other than the institution they were serving time inside of to claim the emergency COVID support.

$1.2 million was also paid to 391 dead people, which includes cases of attempted identity theft. “As part of the intake control in place for the delivery of benefits a verification of the individual’s identity through the Social Insurance Register was conducted,” said Briefing Binder. “Applications were not processed in situations where the applicant’s death was registered.”

In December 2022 it was estimated that $2.3 billion of overpayments had been recovered, based on a strictly volunteer basis, meaning only individuals who called the CRA to submit requests for amounts owed were processed.