Report 7—Canada Emergency Wage Subsidy

At a GlanceReport 7—Canada Emergency Wage Subsidy

  Why we did this audit

  • The Canada Emergency Wage Subsidy (CEWS) is one of the largest initiatives the government has ever undertaken.
  • CEWS is one of the key programs for supporting employers and economic recovery after the pandemic.

  Our findings

  • The Department of Finance Canada performed a partial analysis of the initial design of the CEWS program. It subsequently performed a sound and complete analysis to inform the changes to the program.
  • Although the Canada Revenue Agency delivered the subsidy payments rapidly, it chose not to establish tighter controls, and it lacked the sub‑annual and up‑to‑date earnings and tax information it needed to efficiently assess applications.

  Key facts and figures

  • The purpose of the CEWS is to help eligible employers retain their employees during the pandemic by subsidizing up to 75% of qualifying wages (up to $847 per week and per employee).
  • According to the Department of Finance Canada’s estimates, CEWS is expected to cost approximately $97.6 billion by the end of the 2021–22 fiscal year.
  • Canada Revenue AgencyCRA received 1,741,919 applications to CEWS.

  Our recommendations

  • The Department of Finance Canada should complete and publish an economic evaluation of its wage subsidy programs.
  • The Canada Revenue Agency should strengthen its efforts toward tax compliance for GST/HST to ensure that it has the information needed to do validations for the programs that it is administering.
  • To improve the integrity and validation efficiency of any future emergency programs, the Canada Revenue Agency should use automated validations with a unique identifier that can be used in all programs.
  • The Canada Revenue Agency should strengthen the integrity of the Canada Emergency Wage Subsidy program by using business intelligence information as soon as it is available in order to conduct targeted audits.

See full list of recommendations and responses

Related information

Entities
Completion date 12 January 2021
Tabling date 25 March 2021
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