Statement by the Minister of National Revenue the Honourable Diane Lebouthillier, on the Auditor General of Canada (OAG)’s performance audit of the Canada Emergency Wage Subsidy (CEWS)
March 25, 2021 Ottawa Canada Revenue Agency
Following the tabling of the 2021 performance audit of the Canada Emergency Wage Subsidy (CEWS) by the Office of the Auditor General (OAG) of Canada, the Minister of National Revenue, the Honourable Diane Lebouthillier issued the following statement in response to the report entitled, "Canada Emergency Wage Subsidy," which included three recommendations for the Canada Revenue Agency (CRA):
“The CRA is continually improving the programs and services we deliver to Canadians, and to this end the Agency welcomes the Auditor General’s feedback and accepts all of the recommendations in today’s report.
To date, the CRA has processed and approved more than 2.7 million Canada Emergency Wage Subsidy applications for businesses, charities and organizations in the not-for-profit sector, delivering over $71 billion in payments to support over 5 million workers. By providing support quickly to employers of all sizes and in all sectors across the country, over 5 million workers have received the support they need during this unprecedented time.
When the CEWS was introduced, the CRA’s priority was to help get Canadian workers back on their employers’ payrolls. The CRA implemented the CEWS program in record time to meet urgent financial and economic needs during the pandemic, which will benefit our economy as we look to recovery. Despite extraordinarily challenging circumstances, the CRA is proud to have been able to quickly design and deliver the CEWS during a time of unprecedented crisis, and while delivering other emergency benefits. This rollout included a number of up-front verifications, with further post-payment verifications.
Since the launch of the CEWS, the CRA has heard first-hand the positive impact this financial support has had on employers and their workers during these challenging times. As of February, with support from programs like the Wage Subsidy, Canada has recovered 80% of jobs lost since the start of the pandemic.
The CRA is committed to addressing the recommendations set out in the OAG’s report. We have developed an action plan to address the OAG’s three recommendations for the CRA which include: strengthening the development of future emergency programs, strengthening tax compliance, and using business intelligence to conduct audits.
We recognize the economic challenges that have resulted from the COVID-19 pandemic, and the impact that the audit process can have on businesses, particularly small businesses. For this reason, the CRA has proceeded carefully in order to protect both businesses and the broader economy. Consistent with the OAG’s recommendation to strengthen tax compliance, ongoing audit and compliance activities will continue over the next several years.
To improve the integrity and validation efficiency of all CRA programs - including future emergency benefit programs - the CRA will assess and determine how best to use automated validations with a common identifier across programs.
In addition, the CRA will continue to work closely with businesses and their representative organizations as it refines the delivery of this program, as well as any new emergency benefit programs the CRA may need to administer should Canada ever face another crisis in the future.
CEWS is intended to support the payment of salary and wages for employees. Should these funds have been misused, the penalties can include repayment of the wage subsidy, an additional 25% penalty, and potentially imprisonment in cases of fraud.
As Minister of National Revenue, I remain committed to ensuring that our tax system is fair and transparent, while protecting the integrity of programs that provide financial support for businesses and communities using Canadian tax dollars.”
- To date the CEWS has provided over $71B in subsidies supporting over 5 million employees. The CRA publishes detailed data about CEWS claims on our website on a regular basis.
- The CRA has developed comprehensive web content, held regular information sessions with stakeholders and introduced tools including an online CEWS calculator to help businesses comply with the parameters of this emergency program from the outset.
- The CEWS provides employers who have experienced a drop in revenue during the COVID-19 pandemic with a subsidy to cover part of employee wages, retroactive to March 15, 2020. The CEWS will be available until June 15, 2021.
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