The Canada Revenue Agency (CRA) is ramping up efforts to recover overpayments from COVID-19 relief programs, including the Canada Emergency Response Benefit (CERB). According to tax lawyer Dale Barrett, this process is fraught with challenges.
Last month, the CRA began issuing legal warnings and taking steps to reclaim funds from those deemed ineligible for pandemic relief payments. The total amount the CRA aims to recover across all COVID-19 programs is approximately $9.53 billion, with $5.41 billion specifically from CERB overpayments.
Barrett highlighted that many individuals who received these payments have since left Canada, making collection efforts more difficult. “We hear about people who are out of the country, who shouldn’t have received the money, who would never come back, and who are going to get away with it,” Barrett said.
In addition to those who have left the country, some Canadians simply cannot afford to repay the CERB funds. Options for those in this situation include filing a consumer proposal or declaring bankruptcy, although Barrett believes the CRA will ultimately recover funds from most individuals they pursue.
The CERB program provided up to $2,000 per month to Canadians whose employment was impacted by the pandemic. For those who have received a warning from the CRA, Barrett advises requesting a review of their financial situation and eligibility at the time of application.
If individuals cannot prove their eligibility, the CRA may resort to more severe measures such as freezing bank accounts, seizing assets, or placing liens on properties. The CRA has stated it will only take legal action against those who are unresponsive or uncooperative and deemed capable of repaying the funds.
To date, the government’s efforts have led to over 1,000 court battles between claimants and the CRA.