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COVID-19
PANDEMIC
REPORT 6
Canada Emergency
2021 Response Benefit
Reports of the Auditor General
of Canada to the
Parliament of Canada
Independent Auditor’s Report
2021
Reports of the Auditor General of Canada
to the Parliament of Canada
Independent Auditor’s Report
COVID-19 Pandemic
REPORT 6
Canada Emergency
Response Benefit
Performance audit reports
This report presents the results of a performance audit conducted by the Office of the Auditor
General of Canada (OAG) under the authority of the Auditor General Act.
A performance audit is an independent, objective, and systematic assessment of how
well government is managing its activities, responsibilities, and resources. Audit topics
are selected on the basis of their significance. While the OAG may comment on policy
implementation in a performance audit, it does not comment on the merits of a policy.
Performance audits are planned, performed, and reported in accordance with professional
auditing standards and OAG policies. They are conducted by qualified auditors who
• establish audit objectives and criteria for the assessment of performance
• gather the evidence necessary to assess performance against the criteria
• report both positive and negative findings
• conclude against the established audit objectives
• make recommendations for improvement when there are significant differences
between criteria and assessed performance
Performance audits contribute to a public service that is ethical and effective
and a government that is accountable to Parliament and Canadians.
This publication is available on our website at www.oag-bvg.gc.ca.
Cette publication est également offerte en français.
© Her Majesty the Queen in Right of Canada, as represented
by the Auditor General of Canada, 2021.
Cat. No. FA1-27/2021-1-6E-PDF
ISBN 978-0-660-37826-8
ISSN 2561-343X
Cover and title page photos: WAYHOME studio/Shutterstock.com
Table of Contents
Introduction 1
Background. ...........................................................................................................................................1
Focus of the audit...................................................................................................................................3
Findings, Recommendations, and Responses 4
Designing an emergency response benefit.............................................................................................4
The organizations considered and analyzed key areas in the initial design and ongoing
adjustment of the Canada Emergency Response Benefit. ........................................................................ 5
Rapid design of the benefit.................................................................................................................... 6
Benefit expanded and modified over time. .......................................................................................... 8
Quick delivery of the benefit influenced the approach to controls. ........................................................ 10
Initial focus on expediting payments.................................................................................................. 11
Some additional pre-payment controls introduced........................................................................... 12
Most post-payment verification to begin in the 2021–22 fiscal year............................................... 13
Conclusion 16
About the Audit 17
List of Recommendations 22
Canada Emergency Response Benefit Report 6 | iii
Introduction
Background
Responding to a
pandemic
6.1 On 18 March 2020, as part of its wide-ranging economic
response to the coronavirus disease (COVID-19) pandemic, the federal
1
government announced 2 new benefits to provide income support for
workers. The Emergency Care Benefit would support workers who
were unable to work because of COVID-19–related health concerns for
themselves or others they care for. It would give benefits to workers,
including the self-employed, who did not have access to paid sick leave
or Employment Insurance sickness benefits. The Emergency Support
Benefit would support workers who were facing unemployment and
were not eligible for Employment Insurance. In the week after this
announcement, to make it easier and more accessible for applicants,
these benefits were replaced with what would become the Canada
Emergency Response Benefit.
6.2 The purpose of the Canada Emergency Response Benefit was to
support workers who lost income as a result of the COVID-19 pandemic.
It was intended to
• help affected workers meet their financial obligations
• allow workers to stay home to help stop further spread of the virus
• reduce the disease’s toll on individuals and the health care system
Eligibility criteria were defined for the benefit (Exhibit 6.1).
Coronavirus disease (COVID-19)—The disease caused by severe acute respiratory
syndrome coronavirus 2 (SARS-CoV-2).
Canada Emergency Response Benefit Report 6 | 1
Exhibit 6.1—Eligibility criteria for the Canada Emergency Response Benefit1
To be eligible for the Canada Emergency Response Benefit, applicants had to meet the following criteria
at the time of applying:
• reside in Canada
• be at least 15 years of age
• earned a minimum of $5,000 before taxes in the 12 months leading up to the application or in 2019 from
one of the following sources:
• employment income
• self-employment income
• federal and provincial benefit payments related to maternity or parental leave
• did not quit their jobs voluntarily
• are affected by the COVID-19 pandemic in one of the following ways:
• had work hours reduced because of the pandemic and do not expect to earn more than $1,000
before deductions over a period of at least 14 consecutive days during the 4-week period for
which they applied for the benefit
• stopped working because of the pandemic for at least 14 consecutive days within the 4-week
period for which they applied for the benefit
• are unable to work because of the pandemic, including because they need to take care of a
dependent
• received Employment Insurance regular or fishing benefits for at least 1 week since
29 December 2019 and had exhausted those benefits
1
This exhibit is intended to summarize eligibility information provided to potential applicants by Employment and Social
Development Canada and the Canada Revenue Agency.
Source: Employment and Social Development Canada and the Canada Revenue Agency
6.3 Although the Canada Emergency Response Benefit is generally
referred to as 1 benefit, there were 2 benefits with slightly different
eligibility criteria. Applicants could apply for either benefit:
• Applicants eligible for Employment Insurance benefits should apply
for the Employment Insurance Emergency Response Benefit. This
benefit fell under the Employment Insurance Act.
• Applicants not eligible for Employment Insurance benefits should
apply for the non–Employment Insurance Emergency Response
Benefit. This benefit fell under the Canada Emergency Response
Benefit Act.
To make it easier, we will refer to the 2 benefits as the “Canada
Emergency Response Benefit” or the “benefit” unless there is a need to
distinguish between them.
6.4 Initially, the benefit paid $500 per week for 16 weeks to eligible
recipients. The benefit was extended twice. On 26 June 2020, the benefit
2 | Report 6 Reports of the Auditor General of Canada to the Parliament of Canada—2021
was extended by 8 weeks. This was followed by an additional 4-week
extension on 28 August 2020. In total, the benefit provided support
for a maximum of 28 weeks. Support under the benefit ended
on 3 October 2020. However, individuals could apply retroactively for the
benefit up to 2 December 2020.
6.5 The most recent figure reported by the government on Canada
Emergency Response Benefit payments was about $74 billion as
of 4 October 2020.
Roles and
responsibilities
6.6 Employment and Social Development Canada’s responsibilities for
the Canada Emergency Response Benefit included policy development
and program design, administration, and enforcement. The department
engaged the Canada Revenue Agency to help administer the benefit.
6.7 The Canada Revenue Agency, through a delegation of authority
granted by the Minister of Employment, Workforce Development and
Disability Inclusion on 3 April 2020, was responsible for administering
the non–Employment Insurance Emergency Response Benefit. This
means that, for this benefit, the agency’s responsibilities included
• accepting applications
• verifying and validating the applicant’s eligibility
• processing applications and authorizing payments
• preventing the processing of non-eligible applications
• identifying and collecting erroneous payments
6.8 Employment and Social Development Canada had these same
responsibilities for the Employment Insurance Emergency Response
Benefit.
6.9 The Department of Finance Canada is responsible for providing
advice and analysis to the Minister of Finance on the economic, fiscal,
and social considerations related to proposed policy options.
Focus of the audit
6.10 This audit focused on whether Employment and Social
Development Canada and the Department of Finance Canada provided
analysis to support the initial design and subsequent adjustments to the
Canada Emergency Response Benefit.
6.11 This audit also focused on whether Employment and Social
Development Canada and the Canada Revenue Agency designed
mechanisms so that the benefit would support eligible workers who
Canada Emergency Response Benefit Report 6 | 3
suffered a loss of income for reasons related to the COVID-19 pandemic,
including limiting abuse of the benefit.
6.12 This audit is important because of the significant cost of the
benefit and because of its intent to assist workers affected by the
pandemic.
6.13 The implementation of post-payment verification mechanisms will
be the subject of a future audit.
6.14 More details about the audit objective, scope, approach, and
criteria are in About the Audit at the end of this report (see pages 17–21).
Findings, Recommendations, and Responses
Overall message
6.15 From the outset of the COVID-19 pandemic, the government set
out to quickly get the Canada Emergency Response Benefit to eligible
workers. Working within a short time frame, Employment and Social
Development Canada and the Department of Finance Canada supported
the design of the benefit to deliver support to workers who lost income
because of the COVID-19 pandemic.
6.16 With its quick rollout and subsequent adjustments in real time, the
benefit was put in place to help support affected workers financially and
allow them to stay home to avoid overwhelming the country’s health care
system. To get the benefit to workers quickly, Employment and Social
Development Canada and the Canada Revenue Agency made decisions
about the nature of pre-payment controls that would be introduced.
The department and the agency made an early decision to focus on
post-payment controls to simplify the process and expedite issuing
benefit payments. The department and the agency introduced additional
controls once the benefit was rolled out. The organizations have planned
for post-payment verification work. Most of that work was expected to
start in the 2021–22 fiscal year.
Designing an emergency response benefit
Context
6.17 The Canada Emergency Response Benefit was designed and
implemented by Employment and Social Development Canada in a few
weeks (Exhibit 6.2).
4 | Report 6 Reports of the Auditor General of Canada to the Parliament of Canada—2021
Exhibit 6.2—Timeline of key events in 2020 for the Canada Emergency Response Benefit1
March 11 World Health Organization declares COVID-19 a pandemic
15 Canada Emergency Response Benefit period begins
18 Temporary measures to support workers announced
25 COVID-19 Emergency Response Act comes into effect
31 Benefit rate set at $500 per week
April 6 Online applications opened
8 First payments issued
15 Expanded eligibility announced to allow benefit recipients to earn up
to $1,000 over a 4-week period, and expanded eligibility announced for
the Employment Insurance Emergency Response Benefit to include
seasonal workers and those whose Employment Insurance benefits
had been exhausted2
23 Employment Insurance Emergency Response Benefit extended to
self‑employed fishers
June 26 Benefit extended to 24 weeks
August 28 Benefit extended to 28 weeks
October 3 Benefit period ends
December 2 Deadline to submit retroactive applications
1
The dates in this exhibit reflect when decisions were made or announced and not necessarily when they came
into force.
2
This refers to Employment Insurance claimants who recently exhausted regular benefits and were unable to
find work for reasons related to the COVID-19 pandemic.
Source: Based on information from the COVID-19 Emergency Response Act, interim orders amending the
Employment Insurance Act, regulations on income support payments, and announcements from the federal
government and the World Health Organization
The organizations considered and analyzed key areas in the initial design and ongoing
adjustment of the Canada Emergency Response Benefit
What we found
6.18 We found that, despite extraordinarily challenging circumstances,
an emergency benefit to support workers who lost income as a result
of the COVID-19 pandemic was designed quickly. Despite not having
the usual time required to perform the analysis for the design of a
new benefit, Employment and Social Development Canada and the
Department of Finance Canada considered key areas in the design of the
Canada Emergency Response Benefit. They also conducted preliminary
Canada Emergency Response Benefit Report 6 | 5
analyses on the cost of the benefit. In addition, Employment and Social
Development Canada conducted analysis in other key areas.
6.19 We also found that after the initial design of the benefit was
finalized, Employment and Social Development Canada and the
Department of Finance Canada performed analysis in key areas. This
analysis was used to inform changes to the benefit and respond to the
evolving crisis.
6.20 The analysis supporting this finding discusses the following topics:
• Rapid design of the benefit
• Benefit expanded and modified over time
Why this finding matters
6.21 This finding matters because of the importance of this benefit and
its significant cost. These factors underscore that it needed to be well
designed and to be adjusted over time as circumstances changed.
Context
6.22 To deliver this simplified emergency benefit, a new law and
changes to an existing law were needed. On 25 March 2020, the
COVID-19 Emergency Response Act came into force. This act
• created the Canada Emergency Response Benefit by enacting the
Canada Emergency Response Benefit Act
• provided the authority to the Minister of Employment, Workforce
Development and Disability Inclusion to issue interim orders to
amend the Employment Insurance Act
6.23 On 31 March 2020, the Minister issued the Interim Order Amending
the Employment Insurance Act to include the Employment Insurance
Emergency Response Benefit.
6.24 As the Canada Emergency Response Benefit was delivered, it was
changed through interim orders amending the Employment Insurance Act
and regulatory changes to the Canada Emergency Response Benefit Act.
Recommendations
6.25 We made no recommendations in this area of examination.
Analysis to support
this finding
Rapid design of the benefit
6.26 The unprecedented nature of the global pandemic in
mid‑March 2020 meant that developing policy, conducting economic
analysis, drafting legislation, preparing communications products, and
6 | Report 6 Reports of the Auditor General of Canada to the Parliament of Canada—2021
ultimately putting the Canada Emergency Response Benefit in place
occurred very quickly. Turnaround time for key steps was often a few
hours or overnight. Employment and Social Development Canada
and Canada Revenue Agency officials informed us that this stood in
stark contrast to the usual policy and program development process,
which can take place over many months. Despite this, we found that
Employment and Social Development Canada considered many key
areas in the benefit’s initial design. The department also conducted
analysis in some key areas.
6.27 We found that the department considered social, economic, and
health and safety information to inform decisions about the benefit’s
design. This included key areas such as the benefit’s parameters and
structure and its impact on different recipient groups, economic sectors,
and the labour supply. The department also considered aspects of the
Employment Insurance sickness benefit for health care workers who
were affected by the severe acute respiratory syndrome (SARS) virus in
2003.
6.28 We also found that, when designing the benefit, the department
considered what was needed to meet the government objective of
getting the benefit to eligible workers as quickly as possible. This
included
• providing a flat-rate payment, rather than one based on a sliding
income scale
• having minimal and clear eligibility criteria (applicants to provide an
attestation but no supporting documentation)
• using the Social Insurance Number (SIN) as the primary way to
validate an applicant’s identity
• confirming eligibility through post-payment measures
6.29 We found that the department also analyzed existing Employment
Insurance statistics to determine the average amount paid to claimants
and the percentage of claimants receiving the maximum benefit rate.
The data showed that in the 2018–19 fiscal year, the average amount
paid to claimants was about $470 per week, and approximately 50% of
claimants received the maximum benefit of $573 per week. We also
found that the department conducted preliminary analysis on the cost of
the benefit. Ultimately, the weekly Canada Emergency Response Benefit
payment was set at $500 on 31 March 2020.
6.30 Similarly, we found that the department analyzed Employment
Insurance statistics to identify workers who would be ineligible under
the existing Employment Insurance program. This analysis showed that
millions of workers would be ineligible. Ineligible workers included, for
example, individuals who
• were self-employed and did not contribute to Employment Insurance
• had to stay home to care for children when schools were closed
Canada Emergency Response Benefit Report 6 | 7
6.31 As part of its responsibility for providing advice and analysis on
policy considerations, the Department of Finance Canada performs
a challenge function with respect to funding proposals submitted by
federal departments and agencies. We found that, despite not having
the usual time required to perform its challenge function on the design
of the new benefit, the Department of Finance Canada considered key
areas in the initial design of the Canada Emergency Response Benefit.
The Department of Finance Canada considered some of the same areas
as Employment and Social Development Canada. Like Employment and
Social Development Canada, it also conducted preliminary analysis on
the benefit’s cost. Finally, we found that once the initial design of the
benefit was finalized, the Department of Finance Canada compared
aspects of the Canada Emergency Response Benefit with similar
benefits being delivered by other countries in response to the pandemic.
Benefit expanded and modified over time
6.32 We found that, although Employment and Social Development
Canada was aware that the initial scope of the Canada Emergency
Response Benefit excluded some individuals, it went ahead with the
launch of the online application system on 6 April 2020. The department
did this to issue the benefit as quickly as possible to Canadians who had
stopped working because of the COVID-19 pandemic. The benefit did not
support those who were not working because of the pandemic, such as
• seasonal workers
• individuals ready to work but unable to find jobs because of the
pandemic
• people whose Employment Insurance claims were approaching the
maximum benefit period
6.33 Similarly, we found that Employment and Social Development
Canada was aware that the benefit’s initial design could create a
disincentive for some workers to continue working or seek employment.
This was because it did not allow for any income to be earned while
receiving the benefit.
6.34 We found that the department identified that adjusting eligibility
criteria to allow workers to continue to earn some income and collect the
benefit could create an incentive for some workers to continue working
or return to the labour force. It also identified that allowing some income
to be earned could help support some of the most financially vulnerable
workers, such as employees and self-employed workers whose hours or
volume of work, or both, had been significantly reduced because of the
COVID-19 pandemic. We found that the department analyzed possible
options before it expanded the benefit eligibility on 15 April 2020. This
change both included more workers and encouraged people to keep
working by allowing workers to earn up to $1,000 a month while receiving
the benefit.
8 | Report 6 Reports of the Auditor General of Canada to the Parliament of Canada—2021
6.35 We also found that, to identify possible adjustments, Employment
and Social Development Canada monitored and analyzed the benefit
after accepting applications and delivering the benefit. In late May 2020,
the department analyzed benefit recipient and economic forecasting
data. The analysis showed that the number of benefit recipients
remained high because of the pandemic, and it estimated that millions
of workers would continue to be ineligible for the regular Employment
Insurance program and still be in need of financial support. On the
basis of this analysis, the department developed options to continue to
support workers affected by the pandemic. Ultimately, the Government
of Canada extended the benefit twice. It was extended from 16 weeks
to 24 weeks on 26 June 2020, and to 28 weeks on 28 August 2020.
6.36 We found that, as the benefit was being delivered, the Department
of Finance Canada performed analysis to inform the Minister of Finance
on proposed changes to the benefit in light of the evolving crisis and
economic recovery. For example, the department’s analysis included
• the impact on certain sectors and the labour supply, including
current and projected labour market conditions
• the ongoing impact on the incentive to return to work
• the interaction between the Canada Emergency Response Benefit
and the Canada Emergency Wage Subsidy
6.37 We also found that, as the benefit was being delivered,
the Department of Finance Canada and Employment and Social
Development Canada considered gender-based analysis plus to
2
assess how Canadian workers were being supported by the benefit. The
departments considered recipient data through different demographic
profiles, such as age, occupation type, and gender. The Department
of Finance Canada also considered the United Nations’ Sustainable
Development Goals and how they were related to the emergency nature
of the benefit.
6.38 We found evidence that, to improve its delivery of the
non–Employment Insurance Emergency Response Benefit, the Canada
Revenue Agency monitored patterns of incoming applications to
identify areas requiring additional pre-payment controls. We found
that the Canada Revenue Agency identified and suggested changes
Gender-based analysis plus—”An analytical tool to support the development of responsive
and inclusive initiatives, including policies, programs, legislation, and services, that are
tailored to the different needs and experiences of various groups of people.…The ‘plus’
highlights that all dimensions of diversity and their interactions must be considered as
part of a rigorous and intersectional [gender-based analysis] plus, including age, disability,
indigeneity, economic status, education, ethnicity, geographical location, gender,
language, race, sex, and sexual orientation.”
Source: Women and Gender Equality Canada
Canada Emergency Response Benefit Report 6 | 9
to Employment and Social Development Canada on the design of the
non–Employment Insurance Emergency Response Benefit.
Quick delivery of the benefit influenced the approach to controls
What we found
6.39 We found that Employment and Social Development Canada and
the Canada Revenue Agency focused on delivering the benefit quickly to
help workers who had lost income as a result of the COVID-19 pandemic.
Both organizations understood the risks of emphasizing quick delivery
instead of their usual approaches to validating eligibility, which includes
more controls.
6.40 We found that, once the benefit was rolled out, both the
department and the agency introduced additional pre-payment controls
to stop payments to ineligible applicants in order to limit potential abuse.
We found, however, that given the information available to the Canada
Revenue Agency, it could have introduced a control related to suspicious
applications at the launch of the benefit.
6.41 We found that Employment and Social Development Canada and
the Canada Revenue Agency planned to start most of the post-payment
verification in the 2021–22 fiscal year.
6.42 The analysis supporting this finding discusses the following topics:
• Initial focus on expediting payments
• Some additional pre-payment controls introduced
• Most post-payment verification to begin in the 2021–22 fiscal year
Why this finding matters
6.43 This finding matters because a benefit with reduced pre-payment
controls requires well-designed post-payment controls to ensure that
only eligible applicants received financial support.
Context
6.44 From the outset of the pandemic, the government set out to get the
benefit to eligible workers as quickly as possible. The government also
emphasized the good faith of applicants.
6.45 With the direction to deliver the benefit quickly, Employment and
Social Development Canada and the Canada Revenue Agency were
responsible for determining the required applicant information. They
were also responsible for determining the controls that would be put in
place both before a payment was issued (pre-payment controls) and
after (post-payment verification).
10 | Report 6 Reports of the Auditor General of Canada to the Parliament of Canada—2021
6.46 The volume of applications also had to be considered when
assessing the feasibility of using existing processes. According
to publicly available government data, more than 6 million Canada
Emergency Response Benefit and other Employment Insurance
applications were received between 15 March and 19 April 2020.
6.47 Although Employment and Social Development Canada was
responsible for the benefit’s design, the department and the Canada
Revenue Agency collaborated to assess the risks and design controls
to mitigate them. Each entity leveraged its own existing systems and
processes. The department was responsible for designing and putting
in place controls for the Employment Insurance Emergency Response
Benefit. The agency was responsible for designing and putting in place
controls for the non–Employment Insurance Emergency Response
Benefit.
6.48 According to the International Public Sector Fraud Forum, the
ability to implement pre-payment controls is limited in an emergency.
Therefore, it is important that post-payment verification work be planned
for and carried out to uphold the stewardship of public funds.
Recommendations
6.49 Our recommendations in this area of examination appear at
paragraphs 6.64 and 6.65.
Analysis to support
this finding
Initial focus on expediting payments
6.50 We found that, to deliver the benefit quickly, both Employment and
Social Development Canada and the Canada Revenue Agency took the
approach of relying on applicants’ attestations to assess eligibility for the
Canada Emergency Response Benefit. Applicants were to confirm that
they did not quit their jobs voluntarily and that they had stopped working
because of the COVID-19 pandemic. The use of attestations rather
than documentation made the Canada Emergency Response Benefit
application process different from that of non‑emergency benefits. For
example, applicants were not required to provide a record of employment
to confirm details of their employment and the reason for their job loss,
or a medical note. According to Employment and Social Development
Canada, if the standard pre-payment measures that are used to validate
Employment Insurance applicants’ eligibility had been applied for this
benefit, it would have taken months to process and issue payments.
6.51 According to Employment and Social Development Canada, the use
of attestations simplified the process for applicants. Furthermore, not
having to provide documentation when applying allowed people to stay
home, which followed public health advice.
Canada Emergency Response Benefit Report 6 | 11
6.52 We found that both Employment and Social Development Canada
and the Canada Revenue Agency relied on automated pre-payment
controls that were possible in their existing information technology
systems to validate eligibility quickly. Before issuing benefit payments,
both organizations had a control to confirm that the applicant had a
valid Social Insurance Number. The department also had a control to
confirm that the applicant was not deceased. The agency had a control
to confirm that the applicant was not deceased, was at least 15 years of
age, and was not in a federal correctional facility.
6.53 We found that, by using attestations and limiting the number of
pre-payment controls to validate eligibility, Employment and Social
Development Canada and the Canada Revenue Agency were aware
that some payments would be issued to applicants who were not
entitled to the benefit. This included potential cases of intentional
misrepresentation. Accepting risks in order to expedite payments
to those in need is consistent with best practices promoted by the
International Public Sector Fraud Forum and its Principles of Fraud
Control in Emergency Management.
Some additional pre-payment controls introduced
6.54 We found that, to prevent benefit payments from being issued to
ineligible applicants, Employment and Social Development Canada and
the Canada Revenue Agency introduced some additional pre‑payment
controls as the benefit was being delivered to limit potential abuse.
Below are examples of pre-payment controls introduced by the
department and the agency that were intended to help prevent access to
multiple benefits and to identify suspicious applications.
6.55 Both the department and the agency understood that there was a
risk that an individual could apply for both the Employment Insurance
Emergency Response Benefit and the non–Employment Insurance
Emergency Response Benefit. We found that Employment and Social
Development Canada and the Canada Revenue Agency acted quickly to
reduce the risk that workers would receive payments for both benefits.
Information on applicants was shared between the department and
the agency as of mid-April 2020, about a week after the benefits
were launched. A control was introduced by the organizations to stop
payments to an applicant when the applicant had already received the
other benefit. However, some people applied for and received payments
from both benefits before this control was introduced. According to the
department and the agency, this represented approximately $500 million
in Canada Emergency Response Benefit payments. This represented
less than 1% of the total amount in payments made for the benefit. In
our view, given the significance of this figure, it will be critical that the
organizations conduct rigorous post-payment verification work in this
area.
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6.56 We also found that when the Canada Revenue Agency launched
the Canada Emergency Student Benefit, it designed controls to prevent
an applicant from receiving payments from both that benefit and the
Canada Emergency Response Benefit for the same period. The Canada
Emergency Student Benefit provided financial support to post-secondary
students and recent post-secondary and high school graduates who
were unable to find work because of the COVID-19 pandemic.
6.57 We found that when applicants were blocked by the Canada
Revenue Agency because of suspicious information on their applications,
they were prompted to call the agency and provide the required
documentation in order for their applications to proceed. The agency
then reviewed the documentation provided by applicants to determine
whether they satisfied the eligibility criteria. According to the agency,
as of 20 December 2020, of the approximately 141,000 individuals who
contacted the agency about their applications, only 11% were actually
eligible for the non–Employment Insurance Emergency Response
Benefit.
6.58 We found that Employment and Social Development Canada
developed risk scenarios to identify and detect high-risk Employment
Insurance Emergency Response Benefit applicants. Starting in mid‑May,
applications that matched these scenarios were reviewed and, where
there were reasonable grounds to believe they were fraudulent,
payments were stopped. According to limited information provided by
the department, as of 30 November 2020, payments were stopped for
more than 30,000 potentially fraudulent applications. This represented
approximately $42 million.
6.59 We found that, on 11 May 2020, the Canada Revenue Agency
introduced an automated control to compare new applicants for
the non–Employment Insurance Emergency Response Benefit with
information it had already collected from other programs on high-risk
indicators, such as suspicious individuals. When applications matched
these indicators, the control was designed to block the applications from
going forward. Given that this information predated the benefit, we would
have expected this control to have been introduced at the launch of the
benefit. Agency officials informed us that introducing this control earlier
would have meant delaying the launch of the benefit.
Most post-payment verification to begin in the 2021–22 fiscal year
6.60 With the decision to rely on personal attestations, post‑payment
verification became very important. We found that, early on, Employment
and Social Development Canada and the Canada Revenue Agency
worked together to develop an approach to identifying risks and
implementing related controls. This approach identified post-payment
verification measures that would be carried out, but it did not identify
when this work would be completed or the resources required to do so.
Further, it identified that some post-payment verification work for the
Canada Emergency Response Benefit Report 6 | 13
Canada Emergency Response Benefit required income tax data, which
would be available in spring 2021.
6.61 We found that Employment and Social Development Canada
subsequently developed a 4-year post-payment verification plan. The
plan was expected to start in the 2021–22 fiscal year. The plan
• prioritizes the types of cases that will be examined by the
department
• identifies the number of cases that will be completed each year
• identifies the resources required to complete the reviews and
investigations
6.62 At the time of our audit, the department was pursuing work related
to post-payment verification and collection of ineligible payments under
interim orders issued pursuant to the Employment Insurance Act. When
these interim orders cease to apply in September 2021, the department
will not be able to use its current process for the collection of ineligible
payments from recipients.
6.63 We found that the Canada Revenue Agency also developed
several post-payment verification plans that included verification work
until March 2023. However, it was unclear to what extent the plans
would address risks directly related to the non–Employment Insurance
Emergency Response Benefit. This was because these plans were still in
draft form and included several other emergency benefits in addition to
the non–Employment Insurance Emergency Response Benefit.
6.64 Recommendation. Employment and Social Development Canada
and the Canada Revenue Agency should finalize and implement their
plans for the Canada Emergency Response Benefit post-payment
verification work.
The department’s response. Agreed. Throughout the pandemic,
Employment and Social Development Canada engaged in robust and
proactive planning for post-payment integrity action on Employment
Insurance Emergency Response Benefit claims. Following confirmation of
funding in the Fall Economic Statement 2020, the department developed
a comprehensive 4-year operational plan for post-payment integrity
activities and has begun execution of cases of serious fraud.
Integrity activities are underway and will continue as per the 4‑year
operational plan. The plan will be refined on a regular basis as the
department gains experience and knowledge from its investigations and
ensures that it remains responsive to the continued pandemic context
while maintaining alignment with the Canada Revenue Agency.
14 | Report 6 Reports of the Auditor General of Canada to the Parliament of Canada—2021
The agency’s response. Agreed. The Canada Revenue Agency has
been working in partnership with Employment and Social Development
Canada to align post-payment compliance activities. The post-payment
compliance plan has always been present but remains evergreen because
of the shifting economic and public health landscape.
The agency’s verification work will be largely supported by data and
systems that will become available during the upcoming tax‑filing season.
It is important that our risk assessments include 2020 tax data to calibrate
our verifications using current data. This will help avoid unnecessary
reviews of recipients that may in fact have been eligible to receive benefit
payments or may have already completed voluntary repayments, or both.
Post‑compliance work will commence in September 2021 and is expected
to continue until March 2023.
6.65 Recommendation. Employment and Social Development Canada
and the Canada Revenue Agency should conduct a formal assessment of
the delivery of the Canada Emergency Response Benefit in order to apply
the findings to the design and delivery of future government emergency
response and recovery benefits.
The department’s response. Agreed. The Canada Emergency Response
Benefit was implemented to protect Canadians and the economy from the
impact of the global COVID-19 pandemic, but the lessons learned could
have broader application to future benefit program design and delivery.
Employment and Social Development Canada agrees that a formal
assessment of the delivery of the Canada Emergency Response Benefit
will inform the design and development of future emergency response
benefits.
The agency’s response. Agreed. The Canada Revenue Agency will
conduct a formal assessment of the delivery of the Canada Emergency
Response Benefit (from 15 March to 31 December 2020) to identify best
practices and lessons learned and to determine whether functionality and
processes can be reused in a future crisis.
The findings from this exercise will be available by 31 December 2021
to assist government in the design and delivery of future government
emergency response and recovery programs.
Canada Emergency Response Benefit Report 6 | 15
Conclusion
6.66 We concluded that, despite not having the usual time required to
perform analysis for the design of a new benefit, Employment and Social
Development Canada and the Department of Finance Canada considered
and conducted analysis in key areas as part of the initial design and
subsequent adjustments to the Canada Emergency Response Benefit.
6.67 Further, given the crisis presented by the COVID-19 pandemic,
Employment and Social Development Canada and the Canada Revenue
Agency took the approach of relying on personal attestations and
automated pre-payment controls so that the Canada Emergency
Response Benefit would be issued quickly to eligible workers who
lost income because of the COVID-19 pandemic. Once the benefit
was launched, the department and the agency introduced additional
pre‑payment controls to limit potential abuse of the benefit. The need for
post-payment verification increased given this approach. Employment
and Social Development Canada and the Canada Revenue Agency
developed plans to conduct post-payment work.
16 | Report 6 Reports of the Auditor General of Canada to the Parliament of Canada—2021
About the Audit
This independent assurance report was prepared by the Office of the Auditor General of Canada on
the Canada Emergency Response Benefit. Our responsibility was to provide objective information,
advice, and assurance to assist Parliament in its scrutiny of the government’s management
of resources and programs, and to conclude on whether the design of the Canada Emergency
Response Benefit complied in all significant respects with the applicable criteria.
All work in this audit was performed to a reasonable level of assurance in accordance with the
Canadian Standard on Assurance Engagements (CSAE) 3001—Direct Engagements, set out by
the Chartered Professional Accountants of Canada (CPA Canada) in the CPA Canada Handbook—
Assurance.
The Office of the Auditor General of Canada applies the Canadian Standard on Quality Control 1
and, accordingly, maintains a comprehensive system of quality control, including documented
policies and procedures regarding compliance with ethical requirements, professional standards,
and applicable legal and regulatory requirements.
In conducting the audit work, we complied with the independence and other ethical requirements of
the relevant rules of professional conduct applicable to the practice of public accounting in Canada,
which are founded on fundamental principles of integrity, objectivity, professional competence and
due care, confidentiality, and professional behaviour.
In accordance with our regular audit process, we obtained the following from entity management:
• confirmation of management’s responsibility for the subject under audit
• acknowledgement of the suitability of the criteria used in the audit
• confirmation that all known information that has been requested, or that could affect the
findings or audit conclusion, has been provided
• confirmation that the audit report is factually accurate
Audit objective
The objective of this audit was to determine whether
• Employment and Social Development Canada and the Department of Finance Canada provided
analysis to support the initial design and subsequent adjustments to the Canada Emergency
Response Benefit
• Employment and Social Development Canada and the Canada Revenue Agency designed
mechanisms so that the Canada Emergency Response Benefit would support eligible workers
who suffered a loss of income for reasons related to COVID-19, including limiting abuse of the
benefit
Canada Emergency Response Benefit Report 6 | 17
Scope and approach
The audit focused on the design of the Canada Emergency Response Benefit.
The audit examined the analysis carried out by Employment and Social Development Canada in
the design of the Canada Emergency Response Benefit, as well as the analysis carried out by the
Department of Finance Canada to support and contribute to its design. It examined the analysis
related to the initial design of the Canada Emergency Response Benefit, as well as changes
considered to the benefit in light of
• the interaction with other COVID-19 programs, as required
• the evolution of the broader health crisis and economic situation
• monitoring activities by Employment and Social Development Canada and the Canada Revenue
Agency
The audit also examined the mechanisms designed and put in place by Employment and Social
Development Canada and the Canada Revenue Agency to provide eligible recipients with the
amount of money they were entitled to under the Canada Emergency Response Benefit, in
coordination with other COVID-19 programs. This included
• controls to assess and validate eligibility
• controls to manage the Canada Emergency Response Benefit with other COVID-19 programs
• mechanisms to mitigate identified vulnerabilities, including cases of suspected fraud, or
changes made to the Canada Emergency Response Benefit, or both
The audit did not assess the controls mentioned in this report. The implementation of post‑payment
verification mechanisms will be the subject of a future audit. The audit did not examine the
collection or recovery work related to the benefit.
As part of this audit, our work conducted on the United Nations’ Sustainable Development Goals
was limited to reviewing documentation to determine whether the goals were considered as the
benefit was being designed and delivered.
18 | Report 6 Reports of the Auditor General of Canada to the Parliament of Canada—2021
Criteria
Criteria Sources
We used the following criteria to determine whether
• Employment and Social Development Canada and the Department of Finance Canada provided
analysis to support the initial design and subsequent adjustments to the Canada Emergency
Response Benefit
• Employment and Social Development Canada and the Canada Revenue Agency designed
mechanisms so that the Canada Emergency Response Benefit would support eligible workers who
suffered a loss of income for reasons related to COVID-19, including limiting abuse of the benefit
Employment and Social Development Canada • Canada Emergency Response Benefit Act
performs analysis that supports the design of
• Policy on Financial Management, Treasury Board
the Canada Emergency Response Benefit and
that considers efficiency and risk management. • Management Accountability Framework, Treasury
Board of Canada Secretariat
• Correspondence from the Secretary of the
Treasury Board to Deputy Heads, 19 March 2020
• Transforming our world: the 2030 Agenda for
Sustainable Development, United Nations, 2015
Employment and Social Development Canada • Policy on Financial Management, Treasury Board
and the Canada Revenue Agency design and put
• Management Accountability Framework, Treasury
in place mechanisms for the Canada Emergency
Board of Canada Secretariat
Response Benefit to provide eligible recipients
with the amount of money they are entitled to, in • COVID-19 Emergency Response Act
coordination with other COVID-19 programs, and
• Canada Emergency Response Benefit Act
make necessary adjustments in a timely manner.
• Employment Insurance Act
• Letter of Authority, Canada Revenue Agency,
3 April 2020
• Memorandum of Understanding for the
Administration of the COVID‑19 Emergency
Benefits, between the Canada Revenue Agency
and Economic and Social Development Canada
• Correspondence from the Secretary of the
Treasury Board to Deputy Heads, 19 March 2020
• Transforming our world: the 2030 Agenda for
Sustainable Development, United Nations, 2015
Canada Emergency Response Benefit Report 6 | 19
Criteria Sources
We used the following criteria to determine whether
• Employment and Social Development Canada and the Department of Finance Canada provided
analysis to support the initial design and subsequent adjustments to the Canada Emergency
Response Benefit
• Employment and Social Development Canada and the Canada Revenue Agency designed
mechanisms so that the Canada Emergency Response Benefit would support eligible workers who
suffered a loss of income for reasons related to COVID-19, including limiting abuse of the benefit
Employment and Social Development Canada • Policy on Financial Management, Treasury Board
and the Canada Revenue Agency monitor the use
• Management Accountability Framework, Treasury
of the Canada Emergency Response Benefit to
Board of Canada Secretariat
identify opportunities for ongoing improvement
to its design and make recommendations to • Letter of Authority, Canada Revenue Agency,
inform decision making. 3 April 2020
• Memorandum of Understanding for the
Administration of the COVID-19 Emergency
Benefits, between the Canada Revenue Agency
and Economic and Social Development Canada
• Correspondence from the Secretary of the
Treasury Board to Deputy Heads, 19 March 2020
• Transforming our world: the 2030 Agenda for
Sustainable Development, United Nations, 2015
The Department of Finance Canada performs • Policy on Financial Management, Treasury Board
analysis that supports the design of the
• Management Accountability Framework, Treasury
Canadian Emergency Response Benefit and
Board of Canada Secretariat
that considers efficiency, risk management, and
potential changes to the benefit in light of the • 2020–21 Departmental Plan, Department of
evolving crisis and recovery. Finance Canada
• Correspondence from the Secretary of the
Treasury Board to Deputy Heads, 19 March 2020
• Minister of Middle Class Prosperity and Associate
Minister of Finance Mandate Letter, 2019
• Transforming our world: the 2030 Agenda for
Sustainable Development, United Nations, 2015
20 | Report 6 Reports of the Auditor General of Canada to the Parliament of Canada—2021
Period covered by the audit
The audit covered the period from 1 March 2020 to 10 January 2021. This is the period to which the
audit conclusion applies.
Date of the report
We obtained sufficient and appropriate audit evidence on which to base our conclusion on
11 March 2021, in Ottawa, Canada.
Audit team
Principal: Jo Ann Schwartz
Director: Steven Mariani
Director: Robyn Roy
Donna Ardelean
Cassandra Bishop
Theresa Crossan
Shawn Hamilton
Sean MacLennan
Canada Emergency Response Benefit Report 6 | 21
List of Recommendations
The following table lists the recommendations and responses found in this report. The paragraph
number preceding the recommendation indicates the location of the recommendation in the report,
and the numbers in parentheses indicate the location of the related discussion.
Recommendation Response
Designing an emergency response benefit
6.64 Employment and Social Development The department’s response. Agreed. Throughout
Canada and the Canada Revenue Agency should the pandemic, Employment and Social
finalize and implement their plans for the Canada Development Canada engaged in robust and
Emergency Response Benefit post‑payment proactive planning for post-payment integrity
verification work. (6.50–6.63) action on Employment Insurance Emergency
Response Benefit claims. Following confirmation
of funding in the Fall Economic Statement 2020,
the department developed a comprehensive
4‑year operational plan for post-payment integrity
activities and has begun execution of cases of
serious fraud.
Integrity activities are underway and will continue
as per the 4‑year operational plan. The plan will be
refined on a regular basis as the department gains
experience and knowledge from its investigations
and ensures that it remains responsive to the
continued pandemic context while maintaining
alignment with the Canada Revenue Agency.
The agency’s response. Agreed. The Canada
Revenue Agency has been working in partnership
with Employment and Social Development Canada
to align post-payment compliance activities. The
post-payment compliance plan has always been
present but remains evergreen because of the
shifting economic and public health landscape.
The agency’s verification work will be largely
supported by data and systems that will become
available during the upcoming tax‑filing season.
It is important that our risk assessments include
2020 tax data to calibrate our verifications using
current data. This will help avoid unnecessary
reviews of recipients that may in fact have been
eligible to receive benefit payments or may have
already completed voluntary repayments, or
both. Post‑compliance work will commence in
September 2021 and is expected to continue until
March 2023.
22 | Report 6 Reports of the Auditor General of Canada to the Parliament of Canada—2021
Recommendation Response
6.65 Employment and Social Development The department’s response. Agreed. The Canada
Canada and the Canada Revenue Agency should Emergency Response Benefit was implemented
conduct a formal assessment of the delivery of to protect Canadians and the economy from the
the Canada Emergency Response Benefit in order impact of the global COVID-19 pandemic, but the
to apply the findings to the design and delivery lessons learned could have broader application to
of future government emergency response and future benefit program design and delivery.
recovery benefits. (6.26–6.38, 6.50–6.63)
Employment and Social Development Canada
agrees that a formal assessment of the delivery
of the Canada Emergency Response Benefit will
inform the design and development of future
emergency response benefits.
The agency’s response. Agreed. The Canada
Revenue Agency will conduct a formal assessment
of the delivery of the Canada Emergency Response
Benefit (from 15 March to 31 December 2020) to
identify best practices and lessons learned and
to determine whether functionality and processes
can be reused in a future crisis.
The findings from this exercise will be available
by 31 December 2021 to assist government in
the design and delivery of future government
emergency response and recovery programs.
Canada Emergency Response Benefit Report 6 | 23
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