Auditor-General Karen Hogan’s autumn audits, released on Tuesday, give the government a mixed pandemic report, saying that while benefit programs were fast and doing what they were supposed to do, they were also wasteful and lacked proper verification. “In 2020, the government decided to rely on information provided by claimants and reduce prepayment checks to speed up the delivery of help to people and employers affected by the pandemic,” Hogan said in a statement. “In doing so, it acknowledged that there was a risk that some payments would go to ineligible recipients.” The benefits audit “found that $4.6 billion in overpayments were made to ineligible individuals, and we estimated that at least $27.4 billion in payments to individuals and employers should be investigated further,” he said. Hogan’s audit of pandemic benefits warns that while $2.3 billion in overpayments had been recovered by this summer, the federal government may not have time to track down and recover the rest because of legislative deadlines. By law, the federal government has 36 months from the time benefits are paid to verify the payment was correct, a period that can be extended to 72 months if Canada Revenue Agency suspects recipients provided false information when filing application for benefits. In its analysis, the auditor general’s office considered:
The Employee Lockout Benefit in Canada. Recovery Allowance in Canada. Canada Recovery Sickness Benefit. Canada Recovery Care Allowance. Canada Emergency Benefit (CERB), including the Emergency Employment Insurance Benefit and the Canada Emergency Wage Subsidy.
Goal achievement
The audits looked not only at whether payments were made to eligible recipients and how well the government later verified whether those payments were legitimate, but also at how effective the pandemic aid was in achieving its stated goals. “The Government of Canada has set a goal of helping Canadians as quickly as possible. The COVID-19 emergency programs we audited met that goal,” the audit said. “They quickly provided financial relief to individuals and employers, prevented an increase in poverty, reduced income inequality and helped the economy recover from the effects of the pandemic.” Canada’s gross domestic product was hit by 17% between February and April 2020, shrinking the economy by about $350 billion. But by November 2021, the audit said, the economy had returned to pre-pandemic strength. The audit also said that without the pandemic benefits offered to individuals and businesses, the poverty rate would have almost doubled during the pandemic, from 6.4 percent to 11.6 percent. Although the government managed to send a sufficient number of doses to provinces and territories, Public Health Canada ended up with a large surplus of doses.- Auditor General of Canada Those pandemic boosts, the audit said, went mostly to lower-income workers who benefited from an increase in their incomes before the pandemic. “Overall, these increases in government transfers to households exceeded losses in wages and salaries and self-employment income,” the audit said. “This income compensation through the COVID-19 programs helped to financially support the population.” The audit said that because financial support offered to low-income families raised incomes beyond pre-pandemic levels, the benefit program created a disincentive to work that contributed to labor shortages. “The CERB created a disincentive to return to work, especially for more than a third of claimants who earned less than $500 a week,” it said. “For them, CERB accounted for more than 100 percent of income replacement. This may explain why around two million people remained on benefits for all seven periods, for a total of 28 weeks.” Despite achieving their stated goals, the auditor-general’s report says the government’s efforts to verify and recover improper payments “were not timely” and that “significant unrecoverable amounts are likely to materialize.” “The CRA and Employment and Social Development Canada did not effectively administer the selected COVID-19 programs given the significant amount paid to ineligible recipients,” the audit said.
Supply and distribution of vaccines
When it came to the procurement and distribution of vaccines, the auditor general gave the government a similarly mixed assessment, saying that while it was doing a good job procuring supplies and closing procurement deals, the rush to obtain vaccines had resulted in millions of doses being wasted. “We found that, although a non-competitive approach was taken, Public Services and Procurement Canada exercised due diligence on the seven vaccine companies by conducting assessments to examine the companies’ financial ability to meet requirements and conducting integrity checks to mitigate risk of unethical business practices,” the audit said. A health care worker is seen preparing a dose of a COVID-19 vaccine at a clinic at the Vancouver Convention Center in January. Canada’s Auditor General praised the federal government for buying and quickly distributing vaccines, but criticized it for wasting doses. (Ben Nelms/CBC) Hogan’s fall report said the average cost of a dose of the COVID-19 vaccine was about $30, and estimated the total cost of the 169 million doses purchased between December 2020 and May 2022 to be about $5 billion. “Although the government succeeded in sending a sufficient number of doses to provinces and territories, Public Health Canada ended up with a large surplus of doses,” the report said. As of May 31 of this year, the report said Canada had 32.5 million doses, worth an estimated $1 billion, in stockpiles across the country and another 50.6 million doses deemed surplus and being offered for donation. Of those excess doses, 15.3 million were given, but another 13.6 million expired before they could be given to another country in need of vaccines. “By the end of our audit period, the majority of these remaining tranches still had shelf lives and could be used in fundraising campaigns or donated; however, most will expire by the end of 2022 if not used,” it said the control.
