On June 1, 2020, the Canada Revenue Agency (“CRA”) opened its Leads Program hotline to reports of fraudulent claims for the federal government’s emergency benefits and subsidies. These include the Canada Emergency Response Benefit (“CERB”), the Canada Emergency Student Benefit (“CESB”) and the Canada Emergency Wage Subsidy (“CEWS”). If an individual or business is reported to the Leads Program, the CRA will verify their identity, review the lead to determine if cheating occurred, and take steps to try to address the fraudulent claim.
The CRA has also indicated that it has records of all individuals who received payments through the CERB and the CEWS and is verifying to ensure payments were made to eligible recipients. Similarly, the CRA is conducting pre-payment and post-payment verifications for recipients of the CEWS.
The hotline and verifications represent a shift from the government’s earlier approach to providing emergency benefits and subsidies, which prioritized getting payments out to applicants quickly while leaving scrutinizing eligibility for the next tax season.
This shift has implications for employers that have received the CEWS but may not have met all the eligibility criteria, as they risk losing access to this benefit going forward and may have to repay amounts they’ve already received through the subsidy. The CRA has also indicated that fraudulent claims could lead to penalties, such as fines. Employers currently receiving the CEWS should ensure that they meet all the requirements of the program and prepare for the cost implications if they do not.
In addition, many individuals who have been collecting the CERB or the CESB without being eligible may soon begin seeking employment or increased hours of work more urgently, as they lose or anticipate losing access to these benefits.
This blog is provided as an information service and summary of workplace legal issues. This information is not intended as legal advice.