Ottawa’s clawback of COVID-era benefits is punishing small mistakes and hurting the poor

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Ottawa is under pressure to recover billions of dollars in pandemic benefits it sent to ineligible people and businesses, and is fending off accusations of carelessness with taxpayers’ money

told Canadians on March 11, 2020, the day the World Health Organization declared the virus outbreak a pandemic.

Ottawa is largely going about the collection of pandemic debts “as if it’s business as usual,” said Elizabeth Mulholland, chief executive of Prosper Canada, a national anti-poverty charity. But the after-effects of the massive pandemic-era income supports and of a nearly three-year hiatus in some CRA debt collection activities have been “totally unusual,” she said.

The CERB, and later the CRB, provided taxable payments of $500 a week. The CCB, which is linked to household income, pays up to $583 a month per child for families with young kids. Yvonne Spicer owes $21,730 in EI benefits, which she began receiving through the CERB program when she lost her job at the beginning of the pandemic.In London, Ont., Yvonne Spicer, 45, who has a learning impairment and lives on social assistance, has an annual income of around $20,800 but owes $21,730 in Employment Insurance benefits.

What’s especially troubling about the government’s hubris in chasing pandemic debts from Canadians on social assistance is that social-security workers often told them to go on the CERB and, later, the CRB, said Mr. Stapleton. That was the case for Ms. Spicer: When she lost her job in the spring of 2020, her case worker suggested she apply for the CERB, she said.Marina McSherry , a volunteer at the Parkdale Community Foodbank in Toronto, organizes boxes of food to be delivered.

At West Scarborough Community Legal Services in Toronto, lawyer Carol Drumm said she has assisted several clients on social assistance with pandemic debts of over $10,000 set up repayment plans for as little as $5 a month. A legislated six-year limit on the collection of most COVID-19 benefits means Canadians such as Ms. Drumm’s clients will be free of those repayments in a few years in most cases.

The CRA sent individual notices to people with outstanding government debts, including child benefit overpayments. In some cases, though, the notification of a debt outstanding came months before the benefit offsets restarted, and it was easy to miss.

 

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