2024 Reports 8 to 12 of the Auditor General of Canada to the Parliament of Canada
Report 8—Canada Emergency Business Account
At a Glance
Export Development Canada (EDC), as the Crown corporation responsible for delivering the Canada Emergency Business Account (CEBA) program, acted quickly to disburse $49.1 billion in loans to small businesses to cover expenses that could not be deferred during the COVID‑19 pandemic. Of those loans, 91% went to eligible businesses. As of 31 March 2024, approximately 83% of the total loan amounts originally disbursed had been repaid, with a portion forgiven. Based on our audit work, we estimated $3.5 billion went to ineligible recipients.
We found that EDC prioritized quick implementation of program changes by relying on sole-source contracts with a single vendor without strong checks and balances in place. EDC told us that it took this approach because it did not have the capacity, expertise, or infrastructure to manage a program of this size. EDC gave the vendor too much control over key aspects of contracts, such as the scope of work and pricing, and failed to exercise basic controls in contract management, such as monitoring that amounts paid aligned with the work performed. This meant that value for money was compromised.
The Department of Finance Canada and Global Affairs Canada did not provide effective oversight to ensure that the CEBA program was managed with due regard for value for money. As a result of unclear roles and responsibilities, neither department took accountability for the program, leaving many basic program elements, such as program lifecycle planning, either delayed or incomplete. Further, the Department of Finance Canada did not provide effective oversight of EDC’s administrative spending. No overall spending limits were set, and it did not challenge administrative spending on the program.
These findings are important because unlike other COVID‑19 programs, CEBA is a loan program and will continue for several years. As of 31 March 2024, there was $8.5 billion remaining in loans to be repaid. Some repayments are ongoing, while taking action on defaulted loans has just started. We found that EDC’s plan to collect defaulted loans lacked forecasted costing, performance management, and other key elements. The Canada Revenue Agency, which is supporting EDC in collection efforts, had a more detailed plan but was missing targeted timelines.
Key facts and findings
- The CEBA program provided interest-free loans of $40,000 to $60,000 to eligible businesses, with $10,000 to $20,000 to be forgiven if the rest of the loan was repaid on time.
- Approximately $49.1 billion in loans were provided to approximately 898,000 small businesses across Canada. Of these loans, about $45.6 billion went to recipients that were deemed eligible.
- The total spending to administer the CEBA program as of 31 March 2024 was $853 million, including $575 million to financial institutions and $248 million to EDC to administer the program.
- As of 31 March 2024, the majority of EDC’s expenses ($230 million) were for contracts with third‑party vendors, and within this, 91% was paid to Accenture via non‑competitive contracts. As a result of the use of Accenture proprietary systems, ongoing delivery of the program will rely on these non‑competitive contracts until at least 2028.
Status of $49.1 billion in Canada Emergency Business Account funding disbursed as of 31 March 2024
Source: Based on data from Export Development Canada
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This donut chart shows the status of Canada Emergency Business Account loans disbursed. In descending order, the status is as follows: loans repaid totalled $28.1 billion, or 57.2% of all loans disbursed; the amount forgiven on repaid loans totalled $12.4 billion, or 25.3%; loans written off totalled $0.1 billion, or 0.2%; and remaining loans totalled $8.5 billion, or 17.3%.
Why we did this audit
- Canada Emergency Business Account represented a significant expenditure of public funds to support small Canadian businesses facing economic challenges during the COVID‑19 pandemic.
- While there was some flexibility in how government organizations approached program planning, reporting, and contract processes during the pandemic to achieve results quickly, there was still an expectation of due diligence and controls around how public money was spent.
- Effective governance and oversight of government support programs are essential to safeguard accountability and sound stewardship of public funds.
Highlights of our recommendations
- Export Development Canada and the Canada Revenue Agency should reassess their individual collection plans and include missing elements, such as key performance measures.
- Export Development Canada should update estimates and forecasts of defaulted loans to be collected in order to provide the Canada Revenue Agency with more precise information for its planning and resourcing.
- In its role as policy lead, the Department of Finance Canada should address the accountability and oversight gaps for the Canada Emergency Business Account program, including oversight of administrative expenditures that are paid through the Canada Account.
Please see the Link opens a PDF file in a new browser windowfull report to read our complete findings, analysis, recommendations and the audited organizations’ responses.
Exhibit highlights
An estimated 9% of Canada Emergency Business Account recipients were ineligible
Source: Based on information from Export Development Canada and the Canada Revenue Agency
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This flow chart shows the number of the Canada Emergency Business Account’s ineligible recipients. It shows that an estimated 9% of the program’s 898,000 recipients were ineligible.
The 898,000 total recipients is broken down into 2 streams: the payroll stream and the non‑deferrable expenses stream.
The payroll stream had a total of approximately 763,000 recipients. Export Development Canada identified 50,970 ineligible recipients, and the Office of the Auditor General of Canada identified 40 additional ineligible recipients. This means a total of 51,010 ineligible recipients for the payroll stream.
The non‑deferrable expenses stream had a total of approximately 135,000 recipients. Export Development Canada identified 30 ineligible recipients, and the Office of the Auditor General of Canada identified 120 additional ineligible recipients. There were also approximately 26,000 ineligible recipients based on OAG representative sampling of 52 recipients. This means a total of approximately 26,150 ineligible recipients for the non‑deferrable expenses stream.
Therefore, there were 77,160 ineligible recipients from the 2 streams combined, or an estimated 9% of total recipients, which would amount to approximately $3.5 billion.
The value of contracts increased significantly over time, with 92% of total contract value awarded non competitively to a single vendor
Note: Contract dates are approximated to align with the start and end of a fiscal year and do not represent the actual dates of all contracts.
Source: Based on information from Export Development Canada
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This bar chart shows the values of contracts awarded for the Canada Emergency Business Account from the 2020–21 to 2024–25 fiscal years. It shows that the value of contracts increased over time, with 92% of the total contract value awarded to Accenture and 8% awarded to other vendors.
The following contracts were awarded to Accenture. From the 2020–21 to 2022–23 fiscal years, 6 contracts totalling $70 million were awarded during the disbursement phase. From the 2020–21 to 2023–24 fiscal years, 3 contracts totalling $70 million were awarded to the call centre, and 4 contracts totalling $17 million were awarded to technology solutions. From the 2022–23 to 2024–25 fiscal years, 5 contracts totalling $121 million were awarded to collections design and build. One contract totalling $78 million was awarded to collections implementation and maintenance; it is ongoing.
Various services contracts were awarded to other vendors: 29 contracts totalling $29 million.
Export Development Canada’s (EDC’s) administrative spending as of 31 March 2024
Source: Based on information from Export Development Canada
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This stacked bar chart shows Export Development Canada’s administrative spending as of 31 March 2024. Export Development Canada’s administrative expenses totalled $248 million. This is broken down into Export Development Canada’s internal resources totalling $18 million and total contracts totalling $230 million, of which $209 million, or 91%, was awarded to Accenture and $21 million was awarded to other vendors.
Related information
Tabling date
- 2 December 2024