Most businesses were compliant with wage-support claims according to partial audit
As the Canada Revenue Agency continues to assess pandemic support programs with the benefit of hindsight, it has refused or denied $458 million in claims by businesses for wage support.
The Canada Emergency Wage Subsidy Program was launched in 2020 as the pandemic forced Canadians to stay at home and closed businesses, threatening the livelihoods of millions of employees.
The program paid out more than $100 billion and the auditor general has begun the mammoth task of auditing the program. Of more than $5 billion audited so far, around $458 million was denied or adjusted by the CRA.
“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 with the Canadian Press.
However, the audit has found a bigger issue for those businesses that used a third party to handle their CEWS claims with 85% of audits for these claims having been adjusted or rejected.
The CRA says these intermediaries “knowingly facilitated the production of inaccurate or wilfully non-compliant claims.” Through to the end of September 2023, $15 million in penalties have been imposed relating to these claims and some criminal investigations have begun too.
“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 audit is set to continue until at least 2025.