More than six years after the onset of the COVID-19 pandemic, the federal government continues its efforts to recover billions of dollars distributed to Canadians who were later deemed ineligible for benefits.
A report from Maytree, a think tank and advocacy organization focused on poverty, indicates that these recovery initiatives disproportionately impact low-income Canadians who are unable to repay, ultimately resulting in costs that exceed the amount recovered.
The report calls for a halt to the government’s attempts to reclaim pandemic benefits.
In total, Ottawa allocated approximately $14 billion in COVID-related benefits to individuals who failed to meet the income criteria set by the Canada Revenue Agency. The majority of this funding was distributed through the Canada Emergency Response Benefit (CERB) and subsequently the Canada Recovery Benefit (CRB).
As of the end of last November, the CRA reported that $10 billion remained outstanding, with over $8 billion linked to CERB and CRB payments. CBC News attempted to obtain updated figures from the CRA, but after more than two weeks of inquiries, the agency could not provide them.
“This is not a narrative about fraud,” the report states. “It highlights the repercussions of a government acting quickly, making errors, and then placing the financial burden on those least equipped to handle it.”
John Stapleton, co-author of the Maytree report and a specialist in social policy, acknowledges that some individuals applied for benefits they were not entitled to receive.
“We’re not suggesting they should be excused,” he remarked. “[However], there are individuals caught in this situation who are genuinely struggling as a result.”
In the 2025 budget, Ottawa allocated $123 million to assist the government in collecting its pandemic response benefits over two years, beginning in 2026-27.
Stapleton and Tyler Meredith, a senior fellow at the Munk School of Public Policy and a fellow at Maytree, noted that many Canadians who still owe debt for pandemic benefits are from low-income backgrounds.
“By the time you ask them to repay those benefits, they may have already spent that money,” Meredith explained.
Meredith previously served as the head of economic and fiscal policy under former Prime Minister Justin Trudeau and played a significant role in crafting the federal government’s economic response to the COVID-19 crisis.
“It was always evident, in my opinion, that the purpose of the program was to assist those who had experienced a loss of income,” Meredith stated.
While he emphasized the necessity for the government to assure Canadians that support was available if required, the program was often misinterpreted as a type of universal income.
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“Most individuals do not read the fine print,” Meredith noted.
CERB was operational from March to October 2020. To qualify, applicants needed to have earned at least $5,000 in the previous year, experienced income loss due to the pandemic, and not be receiving EI. Eligible individuals received $2,000 every four weeks.
CERB ‘lacked a recovery plan’
Meredith pointed out that the government did not have a strategy for recouping ineligible benefit disbursements at the time of launching its pandemic relief initiatives.
“Our aim with all the programs we were creating was to have about 80 to 85 percent readiness, understanding we would need to modify and refine the program as we progressed,” Meredith stated.
“There simply wasn’t time to delay.”
Meredith explained that the original plan was to distribute benefits via traditional methods such as the quarterly GST tax credit—now known as the groceries and essentials benefit—or through Canada’s employment insurance framework. However, he noted that the EI system would have been overwhelmed as millions of Canadians were expected to lose jobs during the pandemic.
As a result, the government enacted the Canada Emergency Response Benefit Act to establish a new framework, which Meredith stated was assembled in “just a couple of days.”
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The government offers the option for interest-free repayment over time.
However, the legislation governing CERB “lacks a provision that allows the government or CRA officials to consider any form of settlement,” Meredith remarked. “From their perspective, they are constrained.”
“The Federal Court has affirmed that the CRA must adhere to the eligibility criteria established by legislation and lacks the discretion to deviate from those guidelines,” the CRA indicated to CBC News in a written response.
The CRA stated it is not legally required to pursue every ineligible CERB payment. According to Employment and Social Development Canada (ESDC), the CRA may permit payment deferrals for clients experiencing financial hardship. If it concludes that the hardship is long-term, the CRA can propose a debt write-off to ESDC.
Is it possible for Ottawa to cancel the debt?
However, Meredith asserts that simply forgiving the remaining debt owed by ineligible recipients is “not a feasible option” and “likely politically unacceptable for any government at any time.”
He cited the government’s partial loan forgiveness under the Canada Emergency Business Account (CEBA) program as a potential model, suggesting the creation of a plan to “extend repayment terms over a significantly longer period.”
In its report, Maytree proposed a timeline to gradually cease the collection of pandemic benefits and recommended that the Office of the Parliamentary Budget Officer assess the costs associated with the government’s collection efforts.
Additional recommendations include modifying the Income Tax Act to grant the CRA the authority to negotiate on the remaining debt and for the CRA to resolve over 1,200 pending cases by the conclusion of 2026.
“I believe it is essential for the government to establish a framework,” Meredith stated.
“Up to this point, they have largely refrained from addressing or considering any of this, partly because there will inevitably be some fiscal implications associated with it, but also because, I believe, there is a perception that people have severe attitudes towards this situation.… If you utilized a program improperly, they typically do not believe you deserve any leniency.”
Tag: rewrite-pending