2021 Reports of the Auditor General of Canada to the Parliament of Canada—Rollout of Canada Emergency Wage Subsidy prioritized payments
2021 Reports of the Auditor General of Canada to the Parliament of CanadaRollout of Canada Emergency Wage Subsidy prioritized payments
Ottawa, 25 March 2021—A report from Auditor General Karen Hogan tabled today in the House of Commons concludes that the Department of Finance Canada and the Canada Revenue Agency worked together to support the development and rollout of the Canada Emergency Wage Subsidy (CEWS) program within short time frames. The CEWS is one of the largest initiatives the government has ever undertaken and one of the key programs meant to support employers and economic recovery after the COVID‑19 pandemic.
The audit found that the Department of Finance Canada performed a partial analysis to support the initial design of the CEWS program. As the program rolled out, the department provided sound and complete analysis to inform adjustments.
The audit further found that to prioritize issuing subsidy payments, and as a result of pre‑existing weaknesses in information systems and tax data, the Canada Revenue Agency made decisions about which information it would require and which controls it would apply up front. For example, the agency decided that it would not ask employers applying for the subsidy to provide their employees’ social insurance numbers, though this information could have helped the agency prevent the doubling‑up of financial support. The decision limited the agency’s ability to perform pre‑payment validations, as did the absence of complete and up‑to‑date tax information, which would also have helped it efficiently assess applications. As a result, starting in spring 2021, the agency will have to rely on comprehensive audits to track down and recover payments made to ineligible CEWS recipients.
“To prioritize issuing payments, the Canada Revenue Agency chose to forgo certain controls that it could have used to validate the reasonableness of subsidy applications,” said Ms. Hogan. “The design and rollout of the Canada Emergency Wage Subsidy highlighted pre‑existing weaknesses in the agency’s systems, approaches and data that will need to be addressed to improve the robustness of Canada’s tax system.”
The 2021 Reports of the Auditor General of Canada—Report 7—Canada Emergency Wage Subsidy is available on the Office of the Auditor General of Canada website.
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