Canada Emergency Business Account Report 8
Summary
The PDF of Report 8 (2024) of the Reports of the Auditor General of Canada to the Parliament of Canada audits the Canada Emergency Business Account (CEBA), which the Government of Canada announced on 27 March 2020. Its At a Glance section says the Department of Finance Canada and Global Affairs Canada did not provide effective oversight. Key facts say total spending to administer the program as of 31 March 2024 was $853 million, including $575 million to financial institutions and $248 million to Export Development Canada, and that of the $230 million for third-party vendor contracts, 91% was paid to Accenture via non-competitive contracts. A status chart shows $28.1 billion repaid, $12.4 billion forgiven on repaid loans, $0.1 billion written off and $8.5 billion remaining. The recommendations carry target completion dates of March 31, 2025.
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“Canada Emergency Business Account Report 8.”
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COVID-19
PANDEMIC
REPORT 8
Canada Emergency
2024 Business Account
Reports of the Auditor General
of Canada to the
Parliament of Canada
Independent Auditor’s Report
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.
© His Majesty the King in Right of Canada, as represented by the Auditor General of Canada, 2024.
Cat. No. FA1-27/2024-1-8E-PDF
ISBN 978-0-660-73966-3
ISSN 2561-343X
Cover photo: Instants/Gettyimages.ca
At a Glance
Overall message
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.
Reports of the Auditor General of Canada Report 8 | iii
to the Parliament of Canada—2024
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
Remaining loans
$8.5 billion
(17.3%)
Loans written off
$0.1 billion
(0.2%)
Amount forgiven
on repaid loans
$12.4 billion Loans repaid
(25.3%) $28.1 billion
(57.2%)
Source: Based on data from Export Development Canada
Status of $49.1 billion in Canada Emergency Business Account funding disbursed as
of 31 March 2024—Text description
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%.
Source: Based on data from Export Development Canada
See Recommendations and Responses at the end of this report.
Reports of the Auditor General of Canada Report 8 | iv
to the Parliament of Canada—2024
Table of Contents
Introduction 1
Findings and Recommendations 10
Canada Emergency Business Account (CEBA) loans were disbursed to small Canadian
businesses in a timely manner, but some eligibility controls were poorly implemented........................10
Export Development Canada (EDC) disbursed CEBA loans in a timely manner..................................... 10
91% of CEBA loans went to eligible recipients, but some controls for the non‑deferrable
expenses stream were poorly implemented............................................................................................. 11
EDC gave too much control over CEBA contracts to a third‑party vendor..............................................14
A single vendor set the terms and costs of most CEBA program contracts.......................................... 15
Basic cost controls were missing in EDC’s management of CEBA contracts. ...................................... 19
Responsible departments failed to address basic program elements in their oversight of the
CEBA program......................................................................................................................................24
The Department of Finance Canada did not consider some key program risks.................................... 24
The Department of Finance Canada and Global Affairs Canada did not provide effective
oversight of the CEBA program.................................................................................................................. 25
The Department of Finance Canada did not have effective oversight over EDC’s
administrative costs.................................................................................................................................... 30
EDC and Canada Revenue Agency (CRA) plans to collect defaulted CEBA loans were incomplete,
and collection efforts were slow to start...............................................................................................31
Most CEBA loans were repaid with a portion forgiven, and repayment of outstanding loans is
underway...................................................................................................................................................... 31
EDC and CRA plans for collecting on defaulted loans were incomplete. ............................................... 33
Some loan repayment information was missing, causing delays for EDC to continue collecting
on defaulted loans....................................................................................................................................... 34
Conclusion 36
About the Audit 37
Recommendations and Responses 43
Reports of the Auditor General of Canada Report 8 | v
to the Parliament of Canada—2024
Canada Emergency Business Account
Introduction
The Canada Emergency
Business Account
8.1 The Government of Canada announced the Canada Emergency
Business Account (CEBA) on 27 March 2020 as part of Canada’s
COVID-19 Economic Response Plan. The program provided interest‑
free loans of $40,000 to $60,000 to eligible businesses and non‑profit
organizations (hereafter referred to as businesses) with $10,000 to
$20,000 to be forgiven if the rest of the loan was repaid on time. The
program’s objective was to help small businesses cover a variety of
expenses that could not be deferred during the pandemic, such as
payroll, rent, insurance, and utilities.
8.2 Between April 2020 and December 2020, there were several
changes to the program, including expansions to the eligibility criteria
and increases in the amount of funding available. These different phases
of the program and the timing of each are explained in Exhibit 8.1.
8.3 Throughout the program, there were 2 eligibility streams
available to qualify for a CEBA loan:
• payroll stream (started in April 2020): for small businesses with
payroll greater than $20,000 and less than $1.5 million (based on
the 2019 calendar year)
• non‑deferrable expenses stream (started in June 2020):
for small businesses with $20,000 or less in payroll and
that had non‑deferrable expenses greater than $40,000
and less than $1.5 million (eligible non‑deferrable expenses
included loan payments, rent, insurance, utilities, and other
non‑deferrable expenses)
8.4 In total, approximately 898,000 businesses received CEBA
loans, amounting to approximately $49.1 billion. Exhibit 8.2 and
Exhibit 8.3 show the breakdown by industry of businesses that received
CEBA loans and where these loans were disbursed across the country.
8.5 If eligible businesses met the final loan repayment deadline
of 18 January 2024, they qualified for partial loan forgiveness.
Businesses that sought refinancing in order to repay their loans
had until 28 March 2024 to qualify for partial loan forgiveness. Any
businesses that did not repay the loan by these dates must repay the full
loan amount by 31 December 2026, with interest of 5% per year. Ineligible
businesses, which received a loan without meeting the requirements, had
until 31 December 2023 to repay the full loan amount. Any businesses
that do not repay within those deadlines or do not meet interest payment
obligations are subject to collection.
Reports of the Auditor General of Canada Report 8 | Page 1 of 46
to the Parliament of Canada—2024
Canada Emergency Business Account
Exhibit 8.1—Development phases, key dates, and changes to the Canada Emergency Business
Account program
9 April 2020
Payroll stream launches
Phases 1
and 2
16 April 2020
Payroll stream
eligibility expands
19 June 2020
Non-deferrable expenses
stream launches
Phase 3 31 August 2020
730,575
loans approved
26 October 2020 $29.2 billion
Eligibility requirement for
Phase 4 existing business bank
account is removed
4 December 2020
Loan amount increases
Phase 5 to $60,000
30 June 2021
Application period closes
31 December 2021
898,000
loans approved
31 December 2022 $49.1 billiona
Original repayment
deadline (changed)
18 January 2024
Final repayment deadline
to receive loan forgiveness
for eligible recipientsb
28 March 2024
Repayment Deadline to repay for
(until 2026) those who refinanced
$28.1 billion repaid
Collection 31 December 2026 $12.4 billion forgiven
of defaulted Final deadline for
loans all remaining loans $0.1 billion written off c
(can extend $8.5 billion remaining
to 2032)
2032
Note: All numbers are approximate due to rounding.
a
This amount includes additional funding loaned to existing recipients after the increase of the total loan value to $60,000.
b
Final repayment deadline for ineligible loan recipients was 31 December 2023.
c
Write-off—The cancellation of an amount owed, the removal of the amount from official records, and the acknowledgment of the loss or failure to
recover the amount by reporting it in the financial statements.
Source: Based on information from Export Development Canada
Reports of the Auditor General of Canada Report 8 | Page 2 of 46
to the Parliament of Canada—2024
Canada Emergency Business Account
Exhibit 8.1—Development phases, key dates, and changes to the Canada Emergency Business
Account program—Text description
This timeline shows the Canada Emergency Business Account program’s development phases, key dates,
and changes.
Key dates under phases 1 and 2 are as follows:
• 9 April 2020, when the payroll stream launched
• 16 April 2020, when the payroll stream eligibility expanded
Key dates under phase 3 are as follows:
• 19 June 2020, when the non‑deferrable expenses stream launched
• 31 August 2020, at which time 730,575 loans had been approved at $29.2 billion
A key date under phase 4 is 26 October 2020, when the eligibility requirement for existing business bank
account was removed.
Key dates under phase 5 are as follows:
• 4 December 2020, when the loan amount increased to $60,000
• 30 June 2021, when the application period closed
After phase 5 is the repayment period, which will last until 2026. Key dates are as follows.
As at 31 December 2021, 898,000 loans had been approved at $49.1 billion, which includes additional
funding loaned to existing recipients after the increase of the total loan value to $60,000.
The original repayment deadline, which would be changed, was 31 December 2022.
The final repayment deadline for ineligible loan recipients was 31 December 2023, and the final
repayment deadline to receive loan forgiveness for eligible recipients was 18 January 2024.
The deadline to repay for those who refinanced was 28 March 2024. At that time,
• $28.1 billion had been repaid
• $12.4 billion had been forgiven
• $0.1 billion had been written off
• $8.5 billion remained
A write‑off is the cancellation of an amount owed, the removal of the amount from official
records, and the acknowledgment of the loss or failure to recover the amount by reporting it in the
financial statements.
The final deadline for all remaining loans is 31 December 2026.
The collection of defaulted loans can extend to 2032.
Note: All numbers are approximate due to rounding.
Source: Based on information from Export Development Canada
Reports of the Auditor General of Canada Report 8 | Page 3 of 46
to the Parliament of Canada—2024
Canada Emergency Business Account
Exhibit 8.2—Distribution of Canada Emergency Business Account loans by province and territory
Yukon
0.10%
Northwest Nunavut
Territories 0.01% Newfoundland and Labrador
0.06% 0.97%
British
Columbia
13.73%
Alberta
Manitoba
14.13%
2.63%
Quebec
Saskatchewan 20.78% Prince
3.31% Ontario Edward
40.75% Island
0.42%
Nova Scotia
New Brunswick 1.77%
1.34%
Source: Adapted from Export Development Canada
Exhibit 8.2—Distribution of Canada Emergency Business Account loans by province and territory—
Text description
This map of Canada shows the distribution of Canada Emergency Business Account loans by province
and territory.
In descending order, the distribution is as follows: 40.75% of the loans were distributed to Ontario,
20.78% were distributed to Quebec, 14.13% were distributed to Alberta, 13.73% were distributed to
British Columbia, 3.31% were distributed to Saskatchewan, 2.63% were distributed to Manitoba, 1.77%
were distributed to Nova Scotia, 1.34% were distributed to New Brunswick, 0.97% were distributed to
Newfoundland and Labrador, 0.42% were distributed to Prince Edward Island, 0.10% were distributed to
Yukon, 0.06% were distributed to the Northwest Territories, and 0.01% were distributed to Nunavut.
Source: Adapted from Export Development Canada
Reports of the Auditor General of Canada Report 8 | Page 4 of 46
to the Parliament of Canada—2024
Canada Emergency Business Account
Exhibit 8.3—Distribution of Canada Emergency Business Account (CEBA) loans by industry
Construction
Professional, scientific,
and technical services
Retail trade
Health care and
social assistance
Transportation and
warehousing
Accommodation and
food services
Other services (except
public administration)
Agriculture, forestry,
fishing, and hunting
Real estate and rental
and leasing
Administrative and support, waste
management, and remediation services
Manufacturing
Wholesale trade
Other*
0 20,000 40,000 60,000 80,000 100,000 120,000
Number of businesses that received a CEBA loan**
* Other includes finance and insurance; arts, entertainment, and recreation; educational services; information and cultural industries; mining,
quarrying, and oil and gas extraction; management of companies and enterprises; utilities; and public administration.
** The number of businesses is based on the 806,500 businesses for which we could retrieve industry details, or 90% of the approximately
898,000 total CEBA loans.
Source: Based on data from the Canada Revenue Agency
Exhibit 8.3—Distribution of Canada Emergency Business Account (CEBA) loans by industry—
Text description
This bar chart shows the distribution of Canada Emergency Business Account loans by industry. The
number of businesses that received a loan is based on the 806,500 businesses for which we could
retrieve industry details, or 90% of the approximately 898,000 total loans.
In descending order, the distribution is as follows: 110,504 loans were distributed to construction;
97,384 were distributed to professional, scientific, and technical services; 80,162 were distributed
to retail trade; 69,641 were distributed to health care and social assistance; 68,778 were distributed
to transportation and warehousing; 67,573 were distributed to accommodation and food
services; 62,763 were distributed to other services (except public administration); 54,482 were distributed
to agriculture, forestry, fishing, and hunting; 40,510 were distributed to real estate and rental and
leasing; 35,417 were distributed to administrative and support, waste management, and remediation
services; 33,016 were distributed to manufacturing; and 30,201 were distributed to wholesale trade.
Reports of the Auditor General of Canada Report 8 | Page 5 of 46
to the Parliament of Canada—2024
Canada Emergency Business Account
Exhibit 8.3—Text description continued
There were 56,048 loans distributed to other industries, which included finance and insurance; arts,
entertainment, and recreation; educational services; information and cultural industries; mining,
quarrying, and oil and gas extraction; management of companies and enterprises; utilities; and
public administration.
Source: Based on data from the Canada Revenue Agency
8.6 Export Development Canada (EDC), a Crown corporation, was
directed by the Government of Canada to deliver all aspects of the CEBA
program, using the Canada Account. EDC is the administrator for the
Canada Account, which is used by the government to fund large financial
transactions determined to be in Canada’s national interest. On the
authorization of the Minister for International Trade and the Minister of
Finance, funds are provided from the Consolidated Revenue Fund to EDC
to finance Canada Account transactions. While EDC administers the
transaction under the ministerial authorization, policy decision making
rests at the ministerial level, and risks are assumed by the Government
of Canada (Exhibit 8.4). As with other Canada Account transactions, the
Canada Account was used to fund both the loans to small businesses
and all administrative costs.
Exhibit 8.4—Canada Emergency Business Account (CEBA) decision‑making structure
Prime Minister, Minister of Finance, The decision makers provide policy direction
and Minister for International Trade on the CEBA program
The departments responsible for the
Department of Finance Canada and oversight of the CEBA program provide
Global Affairs Canada program oversight and policy interpretation
The Crown corporation is responsible for
Export Development Canada implementing the CEBA program
Source: Based on information from the Department of Finance Canada and Export Development Canada
Exhibit 8.4—Canada Emergency Business Account (CEBA) decision‑making structure—
Text description
This flow chart shows the decision‑making structure of the Canada Emergency Business Account
program. The Prime Minister, the Minister of Finance, and the Minister for International Trade are the
decision makers who provide policy direction on the program. The Department of Finance Canada and
Global Affairs Canada are the departments responsible for the oversight of the program, and they provide
program oversight and policy interpretation. Export Development Canada is the Crown corporation
responsible for implementing the program.
Source: Based on information from the Department of Finance Canada and Export Development Canada
Reports of the Auditor General of Canada Report 8 | Page 6 of 46
to the Parliament of Canada—2024
Canada Emergency Business Account
8.7 To deliver the program, EDC partnered with financial institutions
to manage the loans and disburse funds directly to small businesses.
EDC signed agreements with 233 financial institutions. It distributed
funds to each financial institution, which then distributed the funds to
small businesses. Financial institutions will continue to manage these
loans and repayments unless they are in default and sent back to EDC.
Each financial institution received a percentage fee per annum based
on the value of loans held at the time. These fees, combined with other
CEBA administrative costs to deliver the program, as of 31 March 2024,
totalled $853 million (Exhibit 8.5).
Exhibit 8.5—Canada Emergency Business Account program administrative spending, from
1 April 2020 to 31 March 2024
Goods and services tax and harmonized
sales tax paid on contracted amounts
$30 million
Export Development
Canada administrative
spending*
Total
$248 million
administrative
expenses
$853 million Financial
institution fees
$575 million
* This spending consists of the cost recovery rate for internal resources and spending on contracts with third parties. Further details are in
Exhibit 8.9.
Source: Based on data from Export Development Canada
Exhibit 8.5—Canada Emergency Business Account program administrative spending, from
1 April 2020 to 31 March 2024—Text description
This donut chart shows the administrative spending of the Canada Emergency Business Account
program from 1 April 2020 to 31 March 2024. The total administrative expenses were $853 million. In
descending order, this total is broken down as follows. Financial institution fees totalled $575 million.
Export Development Canada administrative spending totalled $248 million, which consists of the cost
recovery rate for internal resources and spending on contracts with third parties. Further details are in
Exhibit 8.9 of the report. Finally, the goods and services tax and harmonized sales tax paid on contracted
amounts totalled $30 million.
Source: Based on data from Export Development Canada
Reports of the Auditor General of Canada Report 8 | Page 7 of 46
to the Parliament of Canada—2024
Canada Emergency Business Account
Who we audited
8.8 Export Development Canada is a Crown corporation that
provides loans and insurance products to support and develop Canada’s
export trade. It also administers the Canada Account on behalf of the
federal government. During the COVID-19 pandemic, it was directed
to implement and administer the CEBA program, which it remains
responsible for. It worked with a number of partners, including the
Canada Revenue Agency, multiple financial institutions, and several
third-party vendors, to verify the eligibility of loan applicants, disburse
funds to loan recipients, and oversee loan repayment, and it continues to
work collaboratively with the Canada Revenue Agency on the collection
of defaulted loans. EDC is also responsible for tracking program risks
and outcomes and communicating these to the Department of Finance
Canada and Global Affairs Canada.
8.9 Global Affairs Canada is the federal department responsible
for providing analysis and advice to the Minister of Export Promotion,
International Trade and Economic Development (Minister for
International Trade), who is the minister responsible for the Canada
Account and for EDC. Global Affairs Canada is responsible for overseeing
the use of the Canada Account. In coordination with the Department
of Finance Canada, Global Affairs Canada is responsible for providing
ongoing program oversight and governance for the CEBA program.
8.10 The Department of Finance Canada is the federal department
responsible for providing analysis and advice to the Minister of Finance
to inform ministerial decisions on the design of the CEBA program. As
the policy lead for the CEBA program, the department is responsible
for guiding and overseeing the development and implementation of
ministerial decisions in relation to the program. In this capacity, the
department is also responsible for ongoing program oversight and
governance, overall program costs, and monitoring and reporting on
overall program outcomes.
8.11 The Canada Revenue Agency was responsible for verifying
applicants’ information to support eligibility checks. The agency is
also mandated to assist EDC in collecting defaulted loans following an
order‑in-council dated 5 April 2022 and amendments to the Income Tax
Act and Excise Tax Act.
8.12 Many CEBA policy decisions were made by the Prime Minister,
Minister of Finance, and Minister for International Trade. We did not
examine the reasons for exercising ministerial discretion and whether it
was properly exercised. We are not mandated to audit policy decisions.
We audit how the public service implements policy.
Reports of the Auditor General of Canada Report 8 | Page 8 of 46
to the Parliament of Canada—2024
Canada Emergency Business Account
What we audited
8.13 Objective. To determine whether Export Development Canada,
the Department of Finance Canada, Global Affairs Canada, and the
Canada Revenue Agency, according to their roles and responsibilities,
managed the CEBA pandemic support program for small businesses
with due regard for value for money.
8.14 In relation to public spending, value for money refers to the
combined consideration of economy (minimizing cost), efficiency
(maximizing output), and effectiveness (fully attaining the intended
results). In the context of a COVID-19 response program, we balanced
these considerations against the need to respond in a timely manner to
an emergency situation, particularly at the beginning of the pandemic.
For the CEBA program, a component of effectiveness can be measured
by the speed in which the program was launched and the timeliness in
getting funds to a large number of eligible small businesses across the
country. The economic effectiveness of the program is more difficult
to measure, as it was not tied to targeted support in select industries
or to changes in health restrictions, but rather to small businesses
broadly. In addition, while the CEBA program was a significant support
program for small businesses, due to the number of other emergency
government support programs for businesses running at the same
time, it was not possible to evaluate the economic effectiveness of
CEBA in isolation. Therefore, the focus of this audit was on whether
economy and efficiency were duly considered in the daily management
and implementation of the program. This considers not only how
quickly program changes were implemented but also whether value for
money was factored into the management of contracts that supported
the program’s implementation and was considered in the program’s
governance and oversight.
8.15 Why this audit matters. CEBA 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.
Reports of the Auditor General of Canada Report 8 | Page 9 of 46
to the Parliament of Canada—2024
Canada Emergency Business Account
Findings and Recommendations
Canada Emergency Business Account (CEBA) loans were
disbursed to small Canadian businesses in a timely manner, but
some eligibility controls were poorly implemented
Why it matters
8.16 This finding matters because it is important that the
government can respond in a timely manner in emergency situations.
It is also important that the response is well designed and includes the
implementation of effective controls to identify ineligible recipients in
order to reduce the loss of public funds.
Export Development Canada (EDC) disbursed CEBA loans in a timely manner
Findings
8.17 We found that EDC was timely in disbursing loan funds
in the emergency context of the global COVID-19 pandemic. By
December 2021, 21 months after the global pandemic was declared,
$49.1 billion in loans had been disbursed. The average time it took
EDC to get funds out to partnered financial institutions was between
3 and 13 business days, depending on the phase of the program
(Exhibit 8.6). We confirmed with 7 of the largest financial institutions that
on average, they disbursed loans to recipients within 15 business days of
receiving funds from EDC. We were required to follow up with financial
institutions directly because neither EDC nor the Department of Finance
Canada or Global Affairs Canada were tracking this metric.
8.18 The CEBA loan was intended to help small businesses cover a
variety of expenses that could not be deferred during the pandemic, such
as payroll, rent, insurance, and utilities. Under this process, most loan
recipients would have waited a maximum period of 28 business days. In
our view, this represented timely disbursement given the nature of the
expenses this loan was meant to cover.
Reports of the Auditor General of Canada Report 8 | Page 10 of 46
to the Parliament of Canada—2024
Canada Emergency Business Account
Exhibit 8.6—Export Development Canada disbursed $49.1 billion in loans to financial institutions in
a timely manner
Average time to
Amount
Number of loans disburse funds
Program phase Time period disbursed
(approximate) to financial
(approximate)
institutions
1 and 2 April 2020 to 687,000 3 business days $27.5 billion
August 2020
3, 4, and 5 (new June 2020 to 211,000 13 business days $10.2 billion
recipients only) December 2021
5 (loans that December 2020 to 572,000* 7 business days $11.4 billion
increased from December 2021
$40,000 to $60,000)
Note: The different phases of the program are explained in Exhibit 8.1.
* This number does not consist of new loans but represents the total number of loans after the program introduced a $20,000 loan increase
(phase 5) to existing loans.
Source: Based on information from Export Development Canada
91% of CEBA loans went to eligible recipients, but some controls for the non‑deferrable
expenses stream were poorly implemented
Findings
8.19 Overall, we found that approximately 91% of loan recipients met
eligibility requirements. The remaining 9% includes recipients that were
previously identified as ineligible by EDC and recipients we estimated
were wrongly assessed as eligible at the time of application (within the
non‑deferrable expenses stream). In total, these recipients received
loans that amounted to approximately $3.5 billion (Exhibit 8.7).
8.20 At the beginning of the pandemic, the Department of Finance
Canada, as policy lead, evaluated the risk associated with limited
pre‑payment controls. Given the urgency of responding to the impacts
of the pandemic, EDC acted in a timely manner to get money out to
small businesses, relying on applicant attestations and other limited
pre-payment controls. EDC then began performing post-payment
verifications at the end of April 2020 for businesses that received
loans under the payroll stream, during phase 1 and phase 2. During this
process, EDC identified almost 70,800 recipients that required further
investigation, representing approximately $2.9 billion in loans:
• Almost 51,000 recipients (representing $2.0 billion) were confirmed
ineligible, as they did not meet eligibility requirements. Ineligible
loan recipients were identified by EDC in October 2021 and informed
of their status in October 2022. These ineligible recipients had to
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repay the full loan amount by 31 December 2023. We found that as
of 31 March 2024, over 50% of these ineligible recipients had not
repaid their loans, which represents approximately $1.1 billion.
• Over 19,800 recipients (representing $908 million) did not meet
eligibility requirements but were deemed eligible due to unclear
CEBA application instructions or internal process issues. These
recipients were treated the same as eligible loan recipients and
therefore were allowed to keep the forgivable portion of their loans
if they repaid by the deadline of 18 January 2024. This decision
resulted in an additional loan forgiveness cost of approximately
$146 million.
8.21 We performed our own verifications of the eligibility criteria for
all recipients of CEBA loans in the payroll stream using data analytics.
We found that EDC successfully implemented pre- and post‑payment
verification for this stream, which represents the majority of CEBA
loan recipients (approximately 85%). Our testing found that these
controls were almost 100% accurate in correctly identifying loan
recipients’ eligibility.
8.22 The non‑deferrable expenses stream was introduced in phase 3,
June 2020, which expanded the CEBA program’s eligibility criteria to
cover small businesses that did not qualify under the payroll stream.
At this phase, EDC had introduced more pre-payment controls, which
required additional processes to determine eligibility, including assessing
the validity of expense documents submitted by applicants. However, we
found some issues with their implementation. We used representative
sampling to examine the non‑deferrable expenses stream loan recipients
and found that about 19% should not have been deemed eligible based
on the criteria of the program at that time and should be investigated
further. Based on the total number of recipients in this stream, this would
represent approximately 26,000 loans or about $1.5 billion (Exhibit 8.7).
Most of the errors we found (90%) were due to loans being wrongly
assessed as eligible based on the documentation provided by the
small businesses.
8.23 Given the emergency context, EDC told us that it took a flexible
approach in assessing eligible expenses. However, we found that EDC
approved loans based on the assessments performed by its vendor even
though documentation clearly indicated ineligibility or basic information
was missing. For example, documents were accepted without a business
name or for expenses outside of the eligible period of the program.
EDC’s 2021 internal audit also found similar issues in its review of
expense documents submitted, but the corporation decided to consider
these loans as eligible. For the non‑deferrable expenses stream, EDC
conducted no post-payment verification and therefore did not discover
the extent of these errors.
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Exhibit 8.7—An estimated 9% of Canada Emergency Business Account recipients were ineligible
Payroll
stream
(total of 50,970 40 51,010
approximately ineligible additional
ineligible
763,000 identified ineligible
recipients
recipients) by EDC identified
by OAG
898,000
total
recipients
Non-deferrable
expenses
Approximately
stream
120 26,000
(total of 30 Approximately
approximately ineligible
135,000 ineligible
additional
based on OAG
26,150
ineligible
identified representative ineligible
recipients) identified
by EDC sampling of recipients
by OAG
52 recipients
77,160
ineligible recipients, or an
estimated 9% of total recipients,
which would amount to
approximately $3.5 billion
Abbreviations: EDC: Export Development Canada; OAG: Office of the Auditor General of Canada
Source: Based on information from Export Development Canada and the Canada Revenue Agency
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Exhibit 8.7—An estimated 9% of Canada Emergency Business Account recipients were ineligible—
Text description
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.
Source: Based on information from Export Development Canada and the Canada Revenue Agency
Recommendation
8.24 Export Development Canada should work with the Department
of Finance Canada to consider appropriate actions, including legal
implications and options to recoup loan forgiveness from ineligible small
businesses. Export Development Canada should then identify the full
population of ineligible recipients in the non‑deferrable expenses stream.
Export Development Canada’s response. Partially agreed.
The Department of Finance Canada’s response. Agreed.
See Recommendations and Responses at the end of this report for
detailed responses.
EDC gave too much control over CEBA contracts to a
third‑party vendor
Why it matters
8.25 This finding matters because government organizations
should ensure due diligence in the spending of public funds, including
in decisions around the procurement of professional services. As a
federal Crown corporation delivering the CEBA program on behalf of the
Government of Canada, EDC has a responsibility to ensure that public
funds are spent with due regard for value for money for Canadians,
particularly when extensively outsourcing program delivery to third-party
vendors through non‑competitive procurement.
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A single vendor set the terms and costs of most CEBA program contracts
Findings
8.26 We found that EDC was dependent on a single vendor—
Accenture—to deliver the CEBA program. At the start of the program,
EDC officials communicated to the Department of Finance Canada
that they did not have the internal resources to deliver the program and
would rely on an external contractor. We found that EDC had an existing
agreement with the professional services company, Accenture, for web
services. After the Crown corporation was directed to deliver the CEBA
program, it awarded Accenture an initial non‑competitive contract of
$1 million. As the CEBA program continuously expanded and evolved,
EDC responded by signing an additional 18 non‑competitive contracts
with Accenture, which increased the overall value awarded to the
company to $313 million (see Exhibit 8.8). In total, EDC awarded 19 out
of 48 CEBA-related contracts to Accenture—representing approximately
92% of the total $342 million awarded in contracts to support the delivery
of the CEBA program.
Exhibit 8.8—The value of contracts increased significantly over time, with 92% of total contract
value awarded non‑competitively to a single vendor
Disbursement phase
$70 million
(6 contracts)
Call centre
$27 million
(3 contracts)
Accenture Technology solutions $17 million
92% (4 contracts)
Collections design
$121 million
and build (5 contracts)
Collections implementation
$78 million
and maintenance (1 contract)
Other
vendors Various services contracts with
$29 million
8% other vendors (29 contracts)
2020–21 2021–22 2022–23 2023–24 2024–25
Fiscal year
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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Exhibit 8.8—The value of contracts increased significantly over time, with 92% of total contract
value awarded non‑competitively to a single vendor—Text description
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.
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
8.27 As a Crown corporation, EDC operates according to commercial
principles and is not subject to Treasury Board procurement policies,
which have detailed procedures to help ensure fairness, transparency,
and value for Canadians. EDC has its own procurement policies and
guidelines that also contain the principles of fairness, transparency, and
achieving value for money.
8.28 EDC’s procurement guidelines permit non‑competitive
contracts in certain circumstances, including cases of extreme urgency
or if changing vendors would cause significant inconvenience. Over
time, EDC, the Department of Finance Canada, and Global Affairs
Canada identified the reputational and financial risks of a sustained
non‑competitive relationship with Accenture. In mid-2021, this was to
be mitigated by having an open competitive process for CEBA program
administration prior to the collection of defaulted loans. However, there
were persistent delays in planning for this phase by the Department
of Finance Canada and lack of clarity about roles and responsibilities
for the collection of defaulted loans (see paragraph 8.42). At that time,
the first set of loans in default were due for collection by April 2022
(from ineligible loan recipients). In November 2021, EDC abandoned the
competitive process, citing the need to be ready for this first collection
deadline. As a result, EDC’s sole-source relationship with Accenture was
solidified rather than mitigated.
8.29 We also found that EDC decided to make extensive use
of external contractors to minimize the impact and separate the
CEBA program from its own core operations. According to the
corporation, it did not have the capacity to embed CEBA in its regular
operations because EDC was already involved in delivering other
COVID-19 programs while maintaining its regular corporate business. In
addition, EDC told us that it did not have the expertise or infrastructure to
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deliver a program of this scope, as typically it deals with a lower volume
of large-scale loans. Exhibit 8.9 shows the total administrative spending
for the CEBA program, which was all reimbursed to EDC from the Canada
Account, as of 31 March 2024.
Exhibit 8.9—Export Development Canada’s (EDC’s) administrative spending as of 31 March 2024
EDC
administrative
expenses
$248 million
EDC internal resources
$18 million
Contracts awarded
to other vendors
$21 million
Total contracts:
$230 million,
of which 91% Contracts awarded
was awarded to Accenture
to Accenture $209 million
Source: Based on information from Export Development Canada
Exhibit 8.9—Export Development Canada’s (EDC’s) administrative spending as of 31 March 2024—
Text description
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.
Source: Based on information from Export Development Canada
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8.30 We found that there were risks to EDC’s extensive reliance on
Accenture to deliver the CEBA program. It outsourced many key aspects
of the management of the CEBA program without strong checks and
balances in place. We found weaknesses in the following areas:
• Control over contract scope and prices. Accenture was involved
in proposing the solutions to implement program changes,
determining contract scope and prices with little challenge from
EDC. EDC’s own internal documents acknowledge that contracts in
the first 3 years of the program were primarily drafted by Accenture
and did not contain important terms and conditions such as
preserving the ability to transfer the program to another vendor.
• Control over access to data. A function of the CEBA program is
that all program data is housed in Accenture’s proprietary systems.
As a result, EDC relies on Accenture whenever it requires program
information for reporting or other purposes. We found that although
EDC took steps to ensure it retained ownership of the data, it did not
take steps to maintain access to program information independent
of the vendor or consider the costs associated with this reliance.
As a federal government program, there are ongoing data needs
for reporting for things such as the Public Accounts of Canada,1
for providing data to internal and external audits, and for answering
questions from parliamentarians. Under the contracts, there are
costs for EDC to have Accenture hold and manage this data in
addition to fees for new information needs that may arise. While
there is a provision allowing for data transition within the latest
contract, signed in March 2024, we found that there is currently no
clear plan for how this data will be transitioned back to the federal
government, or the associated cost, at the end of the program.
• Control over the procurement process for a key program element.
We found that EDC had Accenture lead the informal procurement
process for the program’s loan accounting system, despite the fact
that one of the vendors being considered was also Accenture’s
subsidiary. The loan accounting system was a critical program
element that formed the basis of future contracts to collect
defaulted loans, and the process was also an opportunity to
involve another vendor and reduce the dependency on Accenture.
As a result of this procurement process, Accenture was awarded
the contract from EDC. We identified several problems with this
process, including the fact that Accenture had a commercial
interest in the outcome of the selection but was designing criteria
and evaluating vendors. In our view, this was a conflict of interest
that EDC did not manage. In addition, we note that Accenture
1 Public Accounts of Canada—The government’s annual report, which includes
the audited consolidated financial statements of the Government of Canada and other
unaudited financial information, such as the financial statements discussion and analysis
and supporting tables.
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was compensated to run a process in which it ultimately won the
contract. These practices do not align with EDC’s procurement
principles of fairness and transparency (Exhibit 8.10).
Exhibit 8.10—Export Development Canada (EDC) did not follow principles of fairness and
transparency in vendor selection for the loan accounting system
In fall 2021, EDC determined that it would require a loan accounting system to track and monitor
loans transferred from financial institutions when recipients had defaulted and the loans were
proceeding to collections. EDC also determined that there was not sufficient time to run a full
competitive process to develop this system, as at that time, the first loans in default were due
for collection within a year. EDC’s procurement records and communications to the Canada
Emergency Business Account (CEBA) governance committees show that it decided to run an
informal competitive process to identify potential vendors and evaluate their suitability.
Rather than run this process itself, EDC requested that Accenture run a vendor selection
process, giving Accenture the lead in determining and applying the evaluation criteria and
recommending a vendor for the contract. While EDC was participating in this process,
Accenture’s role in leading was problematic because one of the potential vendors was a
subsidiary of Accenture, and this was known to EDC at the time the vendor-led process was
implemented. Even though more than one vendor met the functional and technical requirements
of the solution, we found that EDC accepted Accenture’s recommendation of its own subsidiary
and awarded Accenture the contract for the loan accounting system.
EDC also contracted a third party to provide an independent assessment of the selection
process including operational, financial, and reputational risks. The independent assessment
concluded that EDC executed adequate due diligence in the selection process to address
financial and technical risks. However, this assessment flagged several risks related to EDC’s
dependency on Accenture and the reputational and cost risks of further directed procurement
with them. In EDC’s view, this assessment mitigated its risks around this process. In our opinion,
involving a third party did not absolve EDC of its responsibility to follow principles of fairness
and transparency in the selection process or mitigate the conflict caused by having Accenture
evaluate and recommend its own subsidiary.
This process resulted in $36 million of contracted work for Accenture and a $7-million licensing
fee as of March 2024 to build and integrate the loan accounting system. There are also
longer‑term contracting implications, as this is a proprietary system. This contract also led to
EDC directing other contracts to Accenture to support and maintain the loan accounting system
and other proprietary systems that will be in place until at least 2028.
Basic cost controls were missing in EDC’s management of CEBA contracts
Findings
8.31 We found significant weaknesses in EDC’s contract
management for the CEBA program related to value for money. EDC
failed to implement key controls around contract costs, particularly
for the extended use of hourly-rate contracts. We examined a targeted
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sample of 16 out of 48 CEBA program contracts, in total representing
approximately 87% of the value of all signed contracts ($296 million out
of $342 million), and found issues in almost all contracts examined. Of
this sample, 10 of 16 contracts were with Accenture, representing a total
value of $278 million.
8.32 We found failures in EDC’s implementation of key controls
around contract pricing and validation of costs, which compromised
value for money:
• EDC did not assess the reasonableness of contract values in 14 out
of 16 contracts. For example, it accepted contract values from
vendors with no breakdown of how these amounts were determined
and without performing any validation or challenge to ensure that
values were appropriate.
• EDC failed to verify that invoices it paid accurately reflected the work
performed in 10 of 16 contracts.
8.33 In our sample, 11 of 16 contracts were hourly-rate contracts,
representing $205 million, established between April 2020 and
March 2024. In these contracts, the resources were invoiced based
on the number of hours worked rather than based on a fixed price or
deliverable. EDC chose to pay resources hourly to have flexibility to
incorporate changes as the CEBA program evolved; however, with this
approach, there is a risk that costs rise quickly without strong checks
and balances in place. For example, we found that between April 2020
and March 2024, on average, EDC paid Accenture $824,000 per week for
hours worked by its employees to deliver the CEBA program. Given the
size and scale of the work performed under these hourly-rate contracts
and the fact that most were not awarded competitively, we would have
expected strong controls to be in place. We found several weaknesses in
the management of hourly-rate contracts that we examined:
• Lack of cost and quality controls. Paying by the hour removes
the incentive for a vendor to complete tasks more quickly or with
fewer resources and reduces leverage if deliverables do not meet
expectations. In our view, this is particularly problematic when the
vendor is setting contract values without due diligence to ensure
that the value is reasonable. In the first 3 years, CEBA contracts
did not contain penalties if work was not performed to a certain
standard. For example, our testing performed on the non‑deferrable
expenses stream (see paragraphs 8.22 and 8.23) found quality
issues in the work performed, and EDC paid approximately
$14 million for this work. In later contracts, EDC introduced
penalties, but they were not effective due to the nature of hourly-rate
contracts. For example, when a key deliverable needed more work,
a holdback was applied; however, EDC was still obligated to pay an
extra $5 million for the additional month to complete this work.
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• Lack of assurance on qualifications. In 10 of 11 hourly-rate
contracts we reviewed, rates for staff resources were established
without descriptions of the qualifications of resources required
for each level. The rates charged varied from approximately
$60 to more than $750 per hour, depending on the level of the
resource and the vendor. While the vendors reported the level of
each resource they were charging for, EDC did not require them
to provide information on the qualifications of the resources.
It was then impossible for EDC to verify that the resources had the
qualifications to justify the rates being charged.
• Lack of contract monitoring to support payments made to the
vendor. In 9 of 11 hourly-rate contracts we reviewed, EDC did not
verify that the resources charged were appropriate or that the hours
claimed by each resource were accurate prior to making payments.
EDC accepted invoices that contained almost no details to support
the amounts charged. When it received self-reported timesheets
from vendors, EDC did not analyze or validate this information
to ensure that the number of resources and hours claimed were
accurate and aligned with invoices paid. This limited EDC’s ability to
challenge costs.
For the call centre contracts, EDC did not verify or analyze the costs
in the invoices, and because it did not require that timesheets be
provided, it missed important information about how the call centre
was operating (Exhibit 8.11). In our view, given the high dollar value
of these contracts, we would have expected better monitoring over
the use of public money.
8.34 As of March 2024, EDC has signed a long-term
deliverable‑based contract to support the collection of defaulted
loans. This contract, valued at $78 million for the initial contract
with 3 optional 1-year renewals, consolidates several other existing
contracts, including the call centre and the loan accounting system.
It should be noted that 85% of this contract work requires the use of
systems or processes proprietary to Accenture. Therefore, this contract
solidifies EDC’s dependence on Accenture as solely responsible for most
areas of CEBA program delivery until at least 2028. Despite improved
contract terms and conditions, we found that EDC continued to depend
on Accenture’s self-reporting for monitoring contract performance. In
our view, considering that there are financial penalties if performance
measures are not met, EDC should validate the accuracy of the vendor’s
self-reported performance. A significant gap in our view is that the
contract does not include clear plans and costs for transitioning program
data to the federal government at the end of the program.
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Exhibit 8.11—Export Development Canada (EDC) did not effectively monitor Canada Emergency
Business Account (CEBA) call centre contracts and costs
A CEBA program call centre was established in August 2020. It provided information to potential
applicants and loan recipients. The initial contract awarded for the call centre was expected to
last 4 months and cost $2.78 million. However, as of 31 March 2024, the call centre was still
operating with a cumulative total cost of approximately $23.2 million (see table below). As a
rationale to maintain the call centre, EDC cited the need to support loan recipients through all
program phases, including repayment and collection.
CEBA call centre costs from August 2020 to March 2024
Call centre
Year Wage costs—Agents infrastructure and Total costs
management*
2020 (4 months) $2,009,000 $2,678,000 $4,687,000
2021 $5,673,000 $5,272,000 $10,945,000
2022 $1,606,000 $2,157,000 $3,763,000
2023 $868,000 $2,206,000 $3,074,000
2024 (3 months) $200,000 $520,000 $720,000
Total $10,356,000 $12,833,000 $23,189,000
* Contracts included fixed monthly fees for management and technical support staff, one-time set-up costs, and variable costs for software
and training.
We examined all the contracts for the call centre between August 2020 to March 2024 and
found that EDC did not effectively manage either the contracts or the call centre costs.
We found that costs per call increased significantly after the call volume peaked in 2021 (see
table below).
CEBA call centre call volumes and costs from August 2020 to March 2024
Average Average calls
Call Average
Year number of per agent Total costs
volume cost per call
agents per day per day
2020 (4 months) 150,034 46 34 $4,687,000 $31
2021 270,756 47 23 $10,945,000 $40
2022 17,823 12 6 $3,763,000 $211
2023 15,345 5 12 $3,074,000 $200
2024 (3 months) 14,269 6 37 $720,000 $50
Because EDC did not sufficiently monitor contract costs, it also failed to identify significant cost
fluctuations within certain time periods. For example, the costs per call grew from an average of
$31 in 2020 to a high of $589 per call in April 2023.
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We also found the following problems in EDC’s contract oversight and due diligence:
• EDC relied on the rates provided by Accenture to establish these contracts and did no
independent analysis on the reasonability of the rates charged.
• Unlike for other CEBA contracts, EDC did not require the vendor to provide timesheets for the
call centre agents to support invoices. Therefore, EDC did not recognize the following:
° Due to a decline in call volumes in 2022, agents were only answering 6 calls per day,
but EDC continued to pay for full-time work.
° From April to November 2023, our analysis identified some discrepancies in the
hours charged on the invoices, primarily that EDC seems to have paid an average
of 14 hours per agent per day when the call centre was only open for 9 hours. EDC did
not identify these discrepancies at the time of payment. As a result of our analysis,
EDC followed up with the vendor, which revealed that charges EDC paid included
hours worked by other unreported call centre agents who were not answering calls
but performing other program-related tasks. While the call centre contracts permitted
agents to perform non‑call-related activities, we noted the hours paid for this were
significant (4,000 hours, or the equivalent of 3 full-time resources). At the time of
invoice payment, EDC had no knowledge of this and, at the time of our audit, had no
documentation on the specific tasks performed by each of these other agents.
Source: Based on information from Export Development Canada
Recommendation
8.35 Export Development Canada should strengthen processes for its
management and monitoring of existing and future Canada Emergency
Business Account contracts, including the following:
• Assess and document the reasonability of associated costs
before signing contracts, especially in the case of non‑competitive
procurement. This includes having an awareness of the required
experience and qualification of resources to justify agreed-upon
hourly rates.
• Ensure that potential bidders are not involved in developing or
preparing any part of the procurement process.
• For hourly-rate contracts, work with contractors to obtain
information that accurately details the work completed by each
resource in order to perform independent verification prior
to payment.
• For deliverable-based contracts, to ensure compliance with
contractual obligations, independently monitor the vendors’
performance and do not rely solely on vendors’ self-reporting.
Export Development Canada’s response. Agreed.
See Recommendations and Responses at the end of this report for
detailed responses.
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Recommendation
8.36 Export Development Canada should develop a detailed plan,
including costs, for the implementation of the transition of Canada
Emergency Business Account program data to the government.
Export Development Canada’s response. Agreed.
See Recommendations and Responses at the end of this report for
detailed responses.
Responsible departments failed to address basic program
elements in their oversight of the CEBA program
Why it matters
8.37 This finding matters because effective governance and
oversight of government support programs are essential to safeguard
accountability and sound stewardship of public funds, which were used
to fund both the loans and the program administrative costs. In addition,
sound and complete analysis from responsible departments is essential
to enable informed program decisions by ministers.
The Department of Finance Canada did not consider some key program risks
Findings
8.38 As policy lead for the CEBA program, the Department of
Finance Canada was responsible for providing information, advice, and
recommendations to the Minister of Finance to inform policy decisions
on program design. We found that the department provided rigorous
analysis to inform decision makers on some aspects of CEBA program
design, notably the ongoing needs of small businesses, the speed of loan
disbursement, and program integrity.
8.39 However, we found some important program risks that were
absent from the department’s analysis. We found that the department
did not provide analysis or advice to its minister on the potential risks
to the Government of Canada from delegating program delivery to an
arm’s‑length Crown corporation, particularly regarding risks around
the use of sole-source contracting that emerged as the program
continued (see paragraph 8.42). In addition, we found no evidence that
the department advised its minister on the significant increases in
EDC’s administrative expenditures, as reported by the corporation to the
department on a monthly basis (this finding is more fully discussed in
paragraphs 8.45–8.47).
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The Department of Finance Canada and Global Affairs Canada did not provide effective
oversight of the CEBA program
Findings
8.40 The CEBA program was established during a public health
emergency in which the federal government was reacting quickly
to support businesses impacted by the pandemic. Because of the
CEBA program’s rapid rollout, the Department of Finance Canada
acknowledged in fall 2020 that the program did not undergo the planning
processes that normally occur for large government programs, including
lifecycle planning and risk management activities. The program was
also unique because of the use of the Canada Account to deliver a
large‑scale, long-term government support program. Typically, the
Canada Account is used for single loan transactions that EDC delivers
and administers, for a fee, on behalf of the government and following the
ministerial authorization of a loan; there is no ongoing need for oversight
of EDC’s actions and costs.
8.41 As the CEBA program expanded in scope and length, EDC
identified risks in the use of the Canada Account to deliver the CEBA
program, including the absence of oversight and pre-approved limits
on administrative expenditures for the program. In September 2020,
EDC requested that the Department of Finance Canada (as the policy
lead) and Global Affairs Canada (as EDC’s home department) establish
a formal governance structure to oversee and manage program risks
and costs. In response, 2 governance committees, which included
senior officials from the Department of Finance Canada, Global Affairs
Canada, and EDC, were formed and met on a weekly or biweekly basis.
Since the Government of Canada is responsible for all the risks and
costs associated with the use of the Canada Account, we expected the
departments to take a proactive role in oversight of the CEBA program.
8.42 We found that the Department of Finance Canada and Global
Affairs Canada did not provide effective oversight for the CEBA program,
which left important program elements unaddressed. The program’s
governance committees did not set terms of reference that clearly
established the accountabilities of the departments involved. As a result,
4 years following the establishment of these committees, we found
that there were very different interpretations amongst the departments
regarding their responsibilities and accountabilities and the mandate
of the governance committees. For example, while the Department of
Finance Canada confirmed to us that the committees were established
with the express purpose of providing oversight of the CEBA program,
Global Affairs Canada stated that the committees were consultative
in nature with no oversight function. In addition, Global Affairs Canada
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told us that its oversight responsibility for CEBA was limited to ensuring
that EDC’s use of the Canada Account was aligned with the ministerial
authorizations. As a result of unclear roles and responsibilities, we found
that no federal organization accepted full responsibility for the overall
costs and outcomes of the CEBA program. In our opinion, the absence
of clear accountability contributed to ineffective governance of the
CEBA program, since no department took the lead to implement basic
program elements. We found that the following program elements were
left unaddressed:
• Risk analysis and mitigation. The Department of Finance Canada
and Global Affairs Canada did not monitor, manage, or mitigate
the emerging risk of EDC’s sole-source dependence on Accenture.
The Department of Finance Canada knew that all Accenture
contracts were non‑competitive from the outset, and Global
Affairs Canada became aware of this in March 2021. However,
both departments told us that they could not provide oversight of
EDC’s contracting practices for the program because EDC is an
independent Crown corporation that operates at arm’s length from
the federal government. Due to the use of the Canada Account,
ministerial decision makers were far removed from program
operations, and EDC relied on the departments to communicate
information and program risks. In our view, the Department of
Finance Canada and Global Affairs Canada had a responsibility to
manage these emerging risks on behalf of the government, as it
is the Government of Canada that assumes the risks from Canada
Account transactions. In this case, the Canada Account was used to
reimburse EDC for its contracting expenditures with Accenture and
other vendors.
• Measuring program outcomes. In September 2020, the governance
committees identified key performance indicators for the
CEBA program, but there was no clarity about who had overall
responsibility for program outcomes. As the program administrator,
EDC tracked some indicators operationally and shared these with
the Department of Finance Canada, which then reported to the
ministers and the public. However, neither organization ensured
that key performance indicators designed to measure program
integrity (for example, the ratio of fraudulent loans to total loans)
and administrative efficiency (for example, cost per loan) were
monitored and reported on.
• Spending limits and oversight for program administration costs.
The Department of Finance Canada, as the policy lead for the
program, did not establish a spending limit or oversight mechanism
around EDC’s expenditures on program administration, either at the
beginning of the program or to date.
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• Lifecycle planning. As the policy lead for the CEBA program, the
Department of Finance Canada failed to plan for the entire lifespan
of the program in a timely manner. In the emergency context in
which CEBA was launched in April 2020, a complete plan was not
developed for the entire lifespan of the program, including loan
disbursement, repayment, collection, and enforcement of defaulted
loans. Unlike other pandemic programs that gave out non‑repayable
benefits, all CEBA loans were meant to be repaid and would require
collection actions for defaulted loans.
While EDC was tasked with delivering the disbursement phase of
the program, we found there was no plan for the next phase of
the program—including whether or to what extent EDC would be
responsible for the collection and enforcement of defaulted loans.
In September 2020, EDC informed the Department of Finance
Canada and Global Affairs Canada of the need to plan for the
rest of the program lifecycle. The Department of Finance Canada
submitted its first analysis to its minister in July 2021, followed by
an updated analysis in November 2021. At that time, the first wave
of defaulted loans (from ineligible loan recipients) was due for
collection in April 2022. EDC received confirmation of its role and
that of the Canada Revenue Agency in the collection of defaulted
loans in April 2022. Exhibit 8.12 outlines the impact of delays and
how these contributed to EDC’s continued reliance on Accenture
through non‑competitive contracts.
While a plan for the collection of defaulted loans was developed, we
found that as of August 2024, the Department of Finance Canada
had still not completed planning for the entire CEBA program
lifecycle. More than 4 years after the launch of the program, there
continue to be outstanding aspects of program design that require
Department of Finance Canada analysis, including the government’s
approach to enforcing collection on defaulted loans. After the
period covered by our audit, the Department of Finance Canada
informed us that in late October 2024, it had submitted analysis on
enforcement options to its minister.
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Exhibit 8.12—Delays in the Department of Finance Canada’s program planning contributed to
Export Development Canada’s (EDC’s) sole-source dependence on Accenture
September 2020
EDC, Global Affairs Canada, and the Department
of Finance Canada identify the need for lifecycle
planning, mainly the collection of defaulted
loans. A policy decision had not yet been made
to confirm which federal organization would be
responsible for this phase.
Planning for this phase required analysis
of roles and responsibilities for each entity
involved and identification of the systems
and processes required to ensure readiness March to May 2021
for collection of defaulted loans in 18 months,
by April 2022. EDC flags its sole-source dependence on
Accenture as a program risk and communicates
its plans to launch a competitive process in fall
2021 for a vendor to deliver the Canada
Emergency Business Account’s next phase.
The Department of Finance Canada and
Global Affairs Canada are supportive of the
competitive process as an important mitigation
of the risks to the Government of Canada.
EDC and the Department of Finance Canada
agree that a formal government decision on
entity roles and responsibilities in the next
phase of the program will be needed before the
competitive process can be launched.
July 2021
The Department of Finance Canada sends a
first proposal to its minister for a decision on
the responsibilities for the collection of
defaulted loans. However, its proposal does not
consider that technical systems could be
needed to enable collection of defaulted
loans, and further clarity is needed regarding
the precise division of roles and responsibilities
between EDC and the Canada Revenue Agency.
November 2021
The Department of Finance Canada updates the
proposal on the strategy for the collection of
defaulted loans to its minister, 14 months after
lifecycle planning was identified as a priority.
EDC communicates that it would not move
forward with the competitive process, citing the
need to be ready for the April 2022 deadline. In
doing so, its sole-source relationship with
Accenture is solidified.
Source: Based on information from the Department of Finance Canada and Export Development Canada
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Exhibit 8.12—Delays in the Department of Finance Canada’s program planning contributed to Export
Development Canada’s (EDC’s) sole-source dependence on Accenture—Text description
This timeline shows the delays in the collection of defaulted loans and the impact of these delays.
In September 2020, Export Development Canada, Global Affairs Canada, and the Department of Finance
Canada identify the need for lifecycle planning, mainly the collection of defaulted loans. A policy
decision had not yet been made to confirm which federal organization would be responsible for this
phase. Planning for this phase required analysis of roles and responsibilities for each entity involved and
identification of the systems and processes required to ensure readiness for collection of defaulted loans
in 18 months, by April 2022.
From March to May 2021, Export Development Canada flags its sole-source dependence on Accenture as
a program risk and communicates its plans to launch a competitive process in fall 2021 for a vendor to
deliver the Canada Emergency Business Account’s next phase. The Department of Finance Canada and
Global Affairs Canada are supportive of the competitive process as an important mitigation of the risks to
the Government of Canada. EDC and the Department of Finance Canada agree that a formal government
decision on entity roles and responsibilities in the next phase of the program will be needed before the
competitive process can be launched.
In July 2021, the Department of Finance Canada sends a first proposal to its minister for a decision on
the responsibilities for the collection of defaulted loans. However, its proposal does not consider that
technical systems could be needed to enable collection of defaulted loans, and further clarity is needed
regarding the precise division of roles and responsibilities between Export Development Canada and the
Canada Revenue Agency.
In November 2021, the Department of Finance Canada updates the proposal on the strategy for the
collection of defaulted loans to its minister, 14 months after lifecycle planning was identified as a priority.
Export Development Canada communicates that it would not move forward with the competitive process,
citing the need to be ready for the April 2022 deadline. In doing so, its sole-source relationship with
Accenture is solidified.
Source: Based on information from the Department of Finance Canada and Export Development Canada
Recommendation
8.43 The Department of Finance Canada should provide analysis to
support the development of a complete plan, including spending limits,
for all actions required to collect on defaulted loans through to the end of
the Canada Emergency Business Account program.
The Department of Finance Canada’s response. Agreed.
See Recommendations and Responses at the end of this report for
detailed responses.
Recommendation
8.44 The Department of Finance Canada and Global Affairs Canada
should clarify who has the lead for key program activities such as risk
mitigation and overall program outcomes.
Response of each entity. Agreed.
See Recommendations and Responses at the end of this report for
detailed responses.
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The Department of Finance Canada did not have effective oversight over EDC’s
administrative costs
Findings
8.45 As policy lead, the Department of Finance Canada was
responsible for advising the Minister of Finance, who, under the Canada
Account model, authorized the reimbursement to EDC of any amount
necessary to administer the CEBA program. Since the Canada Account
is typically used for individual transactions, there are no pre-established
mechanisms to facilitate oversight of EDC’s overall administrative
costs incurred. Given that the CEBA program is a long-term government
program, we expected that the Department of Finance Canada would
provide ongoing monitoring, analysis, and reporting to its minister on
EDC’s administrative expenditures in order to safeguard accountability
and ensure sound stewardship of public funds.
8.46 In February 2021, 9 months after the program was launched,
the Minister of Finance directed EDC to submit monthly expenditure
reports on its administrative costs for the CEBA program. EDC was also
to notify the Department of Finance Canada and Global Affairs Canada
if its administrative spending forecasts changed by $1 million or more
compared with its initial 4-year forecast. In the absence of established
spending limits, this was one way to monitor EDC’s overall spending.
8.47 However, despite receiving regular expenditure reporting
from EDC for the CEBA program, the Department of Finance Canada
told us that it had no authority to provide oversight of EDC’s overall
administrative expenditures. In our opinion, given that no federal
department was overseeing EDC’s administrative expenditures for the
CEBA program, there is an accountability gap. As a result, we found that
the Department of Finance Canada did not take basic steps to monitor or
analyze EDC’s monthly expenditure reporting—specifically, the following:
• The department did not challenge the expenditures reported by
EDC in its monthly reports, and department officials told us that the
Department of Finance Canada does not generally challenge EDC’s
administrative expenses for Canada Account transactions.
• The Department of Finance Canada deemed EDC’s spending to
be reasonable without any criteria to make this assessment. In
fact, department officials told us that they deemed all expenses
to be acceptable as long as the expenses were related to the
CEBA program.
• We found no evidence that the Department of Finance Canada
analyzed or reported any of this cost information, including
significant increases in EDC’s administrative costs, to its minister.
EDC’s ongoing forecasted program administration costs over the
first 4 years of CEBA rose from $86 million in 2020 to close to
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$300 million by spring 2023 as program parameters expanded and
program implementation continued to be outsourced through new
contracts with Accenture and other third-party vendors.
• At the time of our audit, the Department of Finance Canada had not
asked EDC for forecasts of estimated program costs going forward,
even though EDC did not have forecasts beyond the 2024–25 fiscal
year. EDC has since told us that forecasts for 2025–26 and the
following 5 years were presented to the governance committees at
the end of October 2024.
Recommendation
8.48 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.
The Department of Finance Canada’s response. Disagreed.
See Recommendations and Responses at the end of this report for
detailed responses.
EDC and Canada Revenue Agency (CRA) plans to collect
defaulted CEBA loans were incomplete, and collection efforts
were slow to start
Why it matters
8.49 This finding matters because CEBA is a loan program, and
therefore, there was an expectation that the funding distributed would be
repaid. To assess the program’s performance, a clear plan for how the
funding will be collected, particularly from defaulted loans, is required.
Most CEBA loans were repaid with a portion forgiven, and repayment of outstanding
loans is underway
Findings
8.50 We found that as of 31 March 2024, 83% of the loan amounts
originally disbursed were repaid with partial forgiveness or written off.2
This represents approximately $28.1 billion in repayments, $12.4 billion
in forgiveness, and $0.1 billion in write-offs, with $8.5 billion remaining
in loans yet to be repaid (Exhibit 8.13). Some of the remaining balance
2 Write‑off—The cancellation of an amount owed, the removal of the amount from
official records, and the acknowledgement of the loss or failure to recover the amount by
reporting it in the financial statements.
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is made up of loans in default that have or will be going through the
collection process, and others make up loan recipients providing interest
repayments through financial institutions in accordance with their
loan agreements.
Exhibit 8.13—Status of Canada Emergency Business Account loans disbursed
Remaining loans
$8.5 billion
(17.3%)
Loans written off
$0.1 billion
(0.2%)
Amount forgiven
on repaid loans
$12.4 billion Loans repaid
(25.3%) $28.1 billion
(57.2%)
Source: Based on data from Export Development Canada
Exhibit 8.13—Status of Canada Emergency Business Account loans disbursed—Text description
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%.
Source: Based on data from Export Development Canada
8.51 EDC will accept repayments on loans in good standing through
the financial institutions until the end of 2026. The 5% interest is
currently applicable on these loans, and the full principal amount will
be due on 31 December 2026. Defaulted loans are transferred to EDC
for collection. EDC has created an operational plan for collecting on
defaulted loans, which includes collecting from
• ineligible recipients who have not repaid their loans
by 31 December 2023 (approximately $1.1 billion) (paragraph 8.20)
• eligible recipients who did not take advantage of the loan
forgiveness deadline and who have defaulted on their
interest payments
• eligible recipients who did not take advantage of the loan
forgiveness deadline and who do not repay the entire balance due by
the end of 2026
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8.52 During the collection of defaulted loans, situations may arise
that limit the recovery of amounts owed by small businesses (for
example, bankruptcy, insolvency, inability to repay, inability to locate
recipients, or potentially fraudulent activities), as was the case for the
amounts written off to date. EDC identified and referred 17 cases of
fraud to law enforcement. We did not carry out additional audit work
on these cases. When EDC has exhausted all avenues of collection, the
amount still owed on loans that could not be collected will be reported
as write‑offs each year in the Government of Canada’s consolidated
financial statements and/or in volume 3 of the Public Accounts of
Canada under loss of public money.
EDC and CRA plans for collecting on defaulted loans were incomplete
Findings
8.53 We found that EDC’s plan to collect defaulted loans lacked
forecasted costing, performance management, and other key elements.
8.54 EDC had no forecasts for its program administration costs
beyond 2024–25, even though the collection of defaulted loans is
expected to last until 2032–33. We note, however, that EDC has a signed
contract with Accenture to support the collection of defaulted loans,
with fixed pricing of $78.4 million, until the end of 2028 with options
to renew up to 2031. EDC told us that forecasts for 2025–26 and the
following 5 years were presented to the governance committees at the
end of October 2024. In contrast, the CRA developed cost estimates for
its CEBA collection activities until 2032–33, which currently amounts to
approximately $101 million.
8.55 EDC is missing key performance measures to guide the
collection of defaulted loans, such as average recovery rate or
costs‑to‑recovery ratios. We would have expected EDC to have a detailed
plan with performance measures to verify whether collection efforts are
working. The CRA’s collection plan is more detailed but is missing target
timelines, such as the projected number of files resolved by negotiated
repayment schedules. We would have expected these to be established
and monitored by both EDC and the CRA by the time that the collections
effort launched. Without these key performance measures, it is difficult
to assess whether CEBA’s collection efforts are on track or whether
defaulted loan recipients are being contacted in a timely manner, which
could directly impact future recoveries.
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Recommendation
8.56 Export Development Canada and the Canada Revenue Agency
should reassess their individual collection plans and include missing
elements, such as key performance measures. The Canada Revenue
Agency should coordinate with Export Development Canada to obtain
information in order to establish its own key performance measures
specific to resolving files in a timely manner.
Response of each entity. Agreed.
See Recommendations and Responses at the end of this report for
detailed responses.
Some loan repayment information was missing, causing delays for EDC to continue
collecting on defaulted loans
Findings
8.57 EDC is reliant on the financial institutions to provide monthly
information on CEBA loan repayments, which is required to plan the
collection of defaulted loans with the CRA. EDC anticipated the potential
for reporting delays from financial institutions and added a provision in
its agreements that allow it to withhold payment of administration fees
without interest in cases of overdue reporting. While EDC has deferred
such payments in 2024 where applicable, we found that the provision
was not effective. For example, we found that despite EDC’s efforts,
from March 2024 to August 2024, some financial institutions were late
in providing necessary detailed loan repayment information to EDC on
approximately $1.4 billion of remaining CEBA loans. As of October 2024,
EDC informed us that in working with financial institutions, most delays
had been resolved.
8.58 When EDC receives loan collection information from financial
institutions, it transfers the data to the CRA so its collections officers
can contact and make payment arrangements with the small businesses.
Exhibit 8.14 shows the process between financial institutions, EDC, and
the CRA. Without complete monthly repayment data, EDC does not have
a full picture of the repayment status of all remaining CEBA loans. This
delay has had an impact on the timely identification of defaulted loans
and slowed down the collections process, as the monthly repayment
information is required before a loan can be prepared and sent to the
CRA for collections.
8.59 We also found that the delays in receiving loan repayment
information impacted EDC’s ability to accurately forecast defaulted loans
and the CRA’s plans. In April 2024, EDC estimated that it would provide
approximately 50,000 defaulted loans to the CRA by June 2024 for
action. In response, the CRA increased its initial budget for resourcing
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program collection efforts of defaulted loans from approximately
$6 million to $9 million for 2024–25. However, because of delays in
obtaining the monthly loan repayment data, only 16,000 loans had been
sent to the CRA to collect by the end of August 2024. Because of these
significant delays from the financial institutions and weaknesses in
collections planning, EDC does not have an up-to-date view of its loan
program, making collection efforts significantly slower than expected. In
October, after the period covered by our audit, EDC informed us that the
number of loans sent to the CRA to collect had increased to 60,000.
Exhibit 8.14—Responsibilities for the flow of information between financial institutions, Export
Development Canada, and the Canada Revenue Agency
233 financial institutions Export Development Canada Revenue Agency
are responsible for Canada is responsible for is responsible for
Managing non-defaulted
Validating loan data from
Canada Emergency Business
financial institutions Contacting loan recipients for
Account (CEBA) loans
Sending defaulted CEBA loans repayment or negotiating new
Sending defaulted loans and payment arrangement
to the Canada Revenue Agency
monthly repayment information
for collections
to Export Development Canada
Monitoring payments from new
arrangements and renotifying
the Canada Revenue Agency
if recipients break renegotiated Sending Export Development
payment arrangements Canada–renegotiated payment
arrangement terms
Approving the write-off of CEBA
loans and/or enforcement
activities, if any
Source: Based on data from Export Development Canada
Exhibit 8.14—Responsibilities for the flow of information between financial institutions, Export
Development Canada, and the Canada Revenue Agency—Text description
This flow chart shows the responsibilities for the flow of information between financial institutions,
Export Development Canada, and the Canada Revenue Agency.
There are 233 financial institutions that are responsible for managing non‑defaulted Canada Emergency
Business Account loans and for sending defaulted loans and monthly repayment information to Export
Development Canada.
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Exhibit 8.14— Text description continued
Export Development Canada is responsible for validating loan data from financial institutions and sending
defaulted Canada Emergency Business Account loans to the Canada Revenue Agency for collections.
The Canada Revenue Agency is responsible for contacting loan recipients for repayment or negotiating a
new payment arrangement.
The agency is also responsible for sending Export Development Canada–renegotiated payment
arrangement terms. Export Development Canada is responsible for monitoring payments from new
arrangements and renotifying the Canada Revenue Agency if recipients break renegotiated payment
arrangements and for approving the write-off of CEBA loans and/or enforcement activities, if any.
Source: Based on data from Export Development Canada
Recommendation
8.60 Export Development Canada should enforce the existing terms
and conditions of its agreements with financial institutions to ensure
that data is received in a timely manner. It should also 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.
Export Development Canada’s response. Agreed.
See Recommendations and Responses at the end of this report for
detailed responses.
Conclusion
8.61 We concluded that the Department of Finance Canada, Global
Affairs Canada, and Export Development Canada, according to their roles
and responsibilities, did not manage the Canada Emergency Business
Account pandemic support program for small businesses with due
regard for value for money. In performing a supporting role to Export
Development Canada in collecting on defaulted loans, the Canada
Revenue Agency had shown some consideration of value for money
in establishing a detailed plan, but this plan lacked key performance
measures that would better demonstrate the achievement of value
for money.
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About the Audit
This independent assurance report was prepared by the Office of the Auditor General of Canada
on the Canada Emergency Business Account (CEBA). 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 CEBA program 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
Management 1—Quality Management for Firms That Perform Audits or Reviews of Financial
Statements, or Other Assurance or Related Services Engagements. This standard requires our
office to design, implement, and operate a system of quality management, including policies or
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
Export Development Canada and the Canada Revenue Agency confirmed that the audit report is
factually accurate.
The Department of Finance Canada confirmed that the audit report is factually accurate, with the
exception of the role of the department in providing oversight of Export Development Canada’s
overall administrative costs.
Global Affairs Canada confirmed that the audit report is factually accurate, with the exception of
statements about departmental oversight of the CEBA program. As we report, the department
maintains that its responsibilities for oversight are limited to ensuring that Export Development
Canada’s use of the Canada Account was aligned with the ministerial authorizations.
The Office of the Auditor General of Canada maintains its expectation that both departments should
have provided effective oversight of the CEBA program as these were public funds being spent
through the Canada Account. While the Department of Finance Canada is the policy lead for the
CEBA program, Global Affairs Canada is the department that supports the minister responsible for
Export Development Canada.
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Audit objective
The objective of this audit was to determine whether Export Development Canada, the Department
of Finance Canada, Global Affairs Canada, and the Canada Revenue Agency, according to their roles
and responsibilities, managed the CEBA pandemic support program for small businesses with due
regard for value for money.
Scope and approach
The audit assessed whether the CEBA program was managed with due regard for value for money,
with a particular focus on the role of outsourcing in program delivery. The audit examined whether
Export Development Canada’s procurement processes were fair and transparent and whether its
contract management practices demonstrated a consideration for value for money. A number
of factors were considered, such as whether sound justifications for the use of non‑competitive
procurement were documented, whether contracts clearly described intended outputs and required
resources, and whether purchased goods and services were delivered in accordance with contracts.
To do this, the audit examined a targeted sample of 16 CEBA program contracts (out of 48),
representing 87% of all contract value. The sample included all contracts worth over $8 million, as
well as certain contracts valued between $350,000 and $8 million chosen on a case-by‑case basis
following a preliminary review. The sample included contracts with 4 different vendors.
The audit also examined program outcomes, such as the number and value of loans disbursed,
repaid, and forgiven and of remaining balances, as well as the number of loan recipients who
met the program’s eligibility requirements. To assess the eligibility of loan recipients, we used
a combination of qualitative data analysis and file and document review. For small businesses
that applied under the payroll stream, we compared 100% of eligible recipient information with
Canada Revenue Agency data to ensure that payroll criteria were met for all of the approximately
763,000 loan recipients in this stream (representing loans totalling $41.4 billion). For small
businesses that applied under the non‑deferrable expenses stream, approximately 135,000 loan
recipients (representing loans totalling $7.7 billion) of the program, we compared 100% of recipient
information with Canada Revenue Agency data to ensure payroll criteria were under $1.5 million,
and we used representative sampling to examine and assess the validity of expense documents
submitted by 52 recipients in this stream. Where representative sampling was used, samples were
sufficient in size to conclude on the sampled population with a confidence level of no less than 90%
and a margin of error (confidence interval) of no greater than +10%. We reviewed the documents
that the small businesses provided to ensure that they met the program criteria at the time
of application.
The audit examined the oversight provided by the Department of Finance Canada (in coordination
with Global Affairs Canada) as well as the analysis that informed CEBA program decision makers.
We reviewed documents such as the ministerial authorizations that gave policy direction to
Export Development Canada, briefing notes to ministers prepared by the Department of Finance
Canada and Global Affairs Canada, and meeting minutes from the program’s primary governance
committee. We also interviewed officials from Export Development Canada, the Department of
Finance Canada, Global Affairs Canada, and the Canada Revenue Agency to determine each entity’s
roles and responsibilities in the administration of the CEBA program.
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Finally, the audit looked at the plans in place for the collection of defaulted loans, including the
memorandum of understanding between Export Development Canada and the Canada Revenue
Agency, as well as other planning documents prepared by these entities, and loan data collected
in the period following the final repayment dates of 31 December 2023 (for ineligible recipients),
18 January 2024 (for eligible recipients), and 28 March 2024 (for eligible refinanced recipients).
Criteria
We used the following criteria to conclude against our audit objective:
Criteria Sources
The Department of Finance Canada provided • Financial Administration Act
analysis to inform decision makers on the design
• Export Development Act
of the Canada Emergency Business Account
(CEBA) program, with due consideration of • COVID-19 Emergency Response Act
efficiency, program costs, risks, and timely
• Order-in-Council, PC Number 2020-0206
planning for the program lifecycle.
• Ministerial authorizations for CEBA, 2020–2023
The Department of Finance Canada, in
coordination with Global Affairs Canada, provided • Correspondence from the Secretary of the
effective governance of the CEBA program, Treasury Board to Deputy Heads, 19 March 2020
including oversight of program implementation,
costs, and outcomes, with due regard to risks and • Memorandum of Understanding Between the
value for money. Department of Foreign Affairs and International
Trade and Export Development Canada, 2002
• Canada Account Transactions Guideline, Export
Development Canada, 2018, updated in 2019,
and 2021
• Policy on Financial Management, Treasury Board
• Policy on Results, Treasury Board
• Directive on the Management of Projects and
Programmes, Treasury Board
• Transforming Our World: The 2030 Agenda for
Sustainable Development, United Nations
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Canada Emergency Business Account
Criteria Sources
Export Development Canada implemented the • Financial Administration Act
CEBA program, including procurement and
• Export Development Act
contracting processes, with due regard to risks
and value for money. • Order-in-Council, PC Number 2020-0206
• Ministerial authorizations for CEBA, 2020–2023
• Procurement Policy, Export Development
Canada, 2019 and 2022
• Procurement Procedure Framework, Export
Development Canada
• Procurement Guidelines, Export Development
Canada, 2022
• Supplier Code of Conduct, Export Development
Canada, 2020
• Third-Party Risk Management Policy, Export
Development Canada, 2019 and 2023
• Policy on Financial Management, Treasury Board
• Directive on the Management of Projects and
Programmes, Treasury Board
• Code of Values and Ethics, Export
Development Canada
• Operational Risk Management Framework,
Export Development Canada, 2020
• A Guide to the Project Management Body of
Knowledge (PMBOK® Guide), Sixth Edition,
Project Management Institute, 2017
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Canada Emergency Business Account
Criteria Sources
Export Development Canada and the Department • Financial Administration Act
of Finance Canada, according to their roles and
• Export Development Act
responsibilities, ensured that CEBA loan payments
were timely and that recipients met eligibility • Order-in-Council, PC Number 2020-0206
criteria, as well as took timely actions to recover
• Ministerial authorizations for CEBA, 2020–2023
payments made to ineligible recipients.
• Program administration and credit agreements
with financial institutions
• Applicant attestations
• Letter of agreement between Export
Development Canada and the Canada Revenue
Agency for eligibility verifications, 2023
• Correspondence from the Secretary of the
Treasury Board to Deputy Heads, 19 March 2020
• Directive on the Management of Projects and
Programmes, Treasury Board
• CEBA program eligibility requirements
• Prime Minister announces expansion of support
for workers and small businesses, Government
of Canada news release, 19 May 2020
• More small businesses can soon access
the Canada Emergency Business Account,
Department of Finance Canada news release,
15 June 2020
• Principles of Fraud Control in Emergency
Management, International Public Sector
Fraud Forum
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Canada Emergency Business Account
Criteria Sources
The Department of Finance Canada, Export • Income Tax Act
Development Canada, and the Canada
• Excise Tax Act
Revenue Agency, according to their roles and
responsibilities, established appropriate loan • Canada Revenue Agency Act
collections plans, with due regard for value
• Financial Administration Act
for money.
• Export Development Act
• Order-in-Council, PC Number 2020-0206
• Order-in-Council, PC Number 2022-0337
• Ministerial authorizations for CEBA, 2020–2023
• CEBA Memorandum of Understanding Between
the Canada Revenue Agency and Export
Development Canada, 2024
• CEBA Letter of Intent between Export
Development Canada and the Canada Revenue
Agency, 2023
• Code of Values and Ethics, Export
Development Canada
• Policy on Financial Management, Treasury Board
• Directive on the Management of Projects and
Programmes, Treasury Board
Period covered by the audit
The audit covered the period from 1 March 2020 to 31 March 2024. This is the period to which the
audit conclusion applies. However, to gain a more complete understanding of the subject matter
of the audit, we also examined certain matters that preceded the start date of this period and that
occurred after 31 March 2024.
Date of the report
We obtained sufficient and appropriate audit evidence on which to base our conclusion
on 7 November 2024, in Ottawa, Canada.
Audit team
This audit was completed by a multidisciplinary team from across the Office of the Auditor General
of Canada led by Mélanie Cabana, Senior Principal. The principal has overall responsibility for audit
quality, including conducting the audit in accordance with professional standards, applicable legal
and regulatory requirements, and the office’s policies and system of quality management.
Reports of the Auditor General of Canada Report 8 | Page 42 of 46
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Canada Emergency Business Account
Recommendations and Responses
Responses appear as they were received by the Office of the Auditor General of Canada.
In the following table, the paragraph number preceding the recommendation indicates the location
of the recommendation in the report.
Recommendation Response
8.24 Export Development Canada should Export Development Canada’s response.
work with the Department of Finance Canada Partially agreed. The pre-funding verifications
to consider appropriate actions, including of Non‑Deferrable Expenses prevented
legal implications and options to recoup loan approximately 108,000 ineligible applications (with
forgiveness from ineligible small businesses. an approximate loan value of $5.5 billion) from
Export Development Canada should then identify being funded. Export Development Canada (EDC)
the full population of ineligible recipients in the agrees to work with Finance Canada to consider
non‑deferrable expenses stream. appropriate post-funding actions, including
examining legal implications and options to
recoup loan forgiveness from ineligible recipients
in the non‑deferrable expenses stream. This
examination will also assess any options against
cost-effectiveness considerations. The target
completion date for the examination is March 31,
2025. With regard to a potential initiative to
identify the full population of ineligible recipients
in the non‑deferrable expenses stream, EDC will
only undertake this work if the examination of
post‑funding actions identifies viable recovery
options and EDC receives revised policy direction
from the Government of Canada.
The Department of Finance Canada’s response.
Agreed. The Department agrees to work with
Export Development Canada to consider
appropriate follow-up actions, including
examining legal implications and options to
recoup loan forgiveness from ineligible recipients
in the non‑deferrable expense stream. This
examination will also assess the options against
cost‑effectiveness considerations.
Finance Canada and Export Development Canada
will complete this work by March 31, 2025.
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Canada Emergency Business Account
Recommendation Response
8.35 Export Development Canada should Export Development Canada’s response. Agreed.
strengthen processes for its management Export Development Canada (EDC) is actively
and monitoring of existing and future Canada working to strengthen its vendor performance and
Emergency Business Account contracts, including contract management practices for both current
the following: and future Canada Emergency Business Account
contracts, which includes process enhancements
• Assess and document the reasonability of
to address the recommendations from the
associated costs before signing contracts,
Office of Auditor General of Canada, with target
especially in the case of non‑competitive
completion by December 31, 2024. EDC will embed
procurement. This includes having an awareness
these process enhancements in a new vendor
of the required experience and qualification of
performance tool and will confirm alignment with
resources to justify agreed-upon hourly rates.
government procurement practices, with target
• Ensure that potential bidders are not involved completion by March 31, 2025.
in developing or preparing any part of the
procurement process.
• For hourly-rate contracts, work with contractors
to obtain information that accurately details
the work completed by each resource in order
to perform independent verification prior
to payment.
• For deliverable-based contracts, to ensure
compliance with contractual obligations,
independently monitor the vendors’ performance
and do not rely solely on vendors’ self-reporting.
8.36 Export Development Canada should Export Development Canada’s response.
develop a detailed plan, including costs, for Agreed. Under Export Development Canada’s
the implementation of the transition of Canada (EDC’s) maintenance and support contract with
Emergency Business Account program data to Accenture, EDC owns and has access to Canada
the government. Emergency Business Account program data. The
transition of program data to EDC’s satisfaction
upon termination of the contract is governed by
commercially standard data transition provisions.
EDC commits to ensure that its data ownership
and access rights are appropriately maintained
and will undertake annual reviews of the transition
plan (including estimated transition activities and
costs) that will be finalized at the time a transition
is initiated.
The target completion date for the first annual
review of the transition plan is June 30, 2025.
8.43 The Department of Finance Canada should The Department of Finance Canada’s response.
provide analysis to support the development of Agreed. The Department of Finance Canada
a complete plan, including spending limits, for has already provided analysis on the remaining
all actions required to collect on defaulted loans relevant aspects of the Canada Emergency
through to the end of the Canada Emergency Business Account program. The Department will
Business Account program. work with Export Development Canada and the
Canada Revenue Agency to identify any other
gaps in the program plan, and accordingly provide
advice, as necessary.
Finance Canada will complete this work by
June 30, 2025.
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Canada Emergency Business Account
Recommendation Response
8.44 The Department of Finance Canada and The Department of Finance Canada’s response.
Global Affairs Canada should clarify who has Agreed. Finance Canada will work with
the lead for key program activities such as risk Global Affairs Canada, in consultation with
mitigation and overall program outcomes. Export Development Canada and the Canada
Revenue Agency, to develop a Memorandum of
Understanding for Canada Emergency Business
Account, or similar document, that will define
the roles and responsibilities of each implicated
organization. Approval of the document
will be sought from the Deputy Heads of all
responsible organizations.
Finance Canada and Global Affairs Canada will
complete this work by March 31, 2025.
Global Affairs Canada’s response. Agreed. Global
Affairs Canada will support Finance Canada in
clarifying the roles and responsibilities related to
Canada Emergency Business Account.
8.48 In its role as policy lead, the Department of The Department of Finance Canada’s response.
Finance Canada should address the accountability Disagreed. Finance Canada has no legislative
and oversight gaps for the Canada Emergency requirements to provide oversight of administrative
Business Account program, including oversight of expenditures on the Canada Emergency Business
administrative expenditures that are paid through Account (CEBA) program. As the administration
the Canada Account. of the CEBA program was delegated to Export
Development Canada (EDC), the Board of Directors
of EDC is responsible for providing oversight of the
administrative expenses of the CEBA program.
8.56 Export Development Canada and the Canada Export Development Canada’s response. Agreed.
Revenue Agency should reassess their individual Export Development Canada agrees to work
collection plans and include missing elements, with the Canada Revenue Agency and Finance
such as key performance measures. The Canada Canada to implement meaningful key performance
Revenue Agency should coordinate with Export measures of the collection activities for defaulted
Development Canada to obtain information in order and assigned loans, with a target completion date
to establish its own key performance measures of March 31, 2025.
specific to resolving files in a timely manner.
The Canada Revenue Agency’s response. Agreed.
The Canada Revenue Agency (CRA) will reassess
its collection plans to include key performance
measures specific to resolving files in a
timely manner.
The CRA and Export Development Canada
will coordinate to complete this work
by March 31, 2025.
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Canada Emergency Business Account
Recommendation Response
8.60 Export Development Canada should Export Development Canada’s response. Agreed.
enforce the existing terms and conditions of Export Development Canada (EDC) works closely
its agreements with financial institutions to with participating financial institutions (FI) to
ensure that data is received in a timely manner. monitor and support their timely fulfillment of data
It should also update estimates and forecasts of and reporting obligations for Canada Emergency
defaulted loans to be collected in order to provide Business Account. EDC is implementing additional
the Canada Revenue Agency with more precise reporting metrics to enhance its monitoring of
information for its planning and resourcing. FI deliverables with a target completion date of
March 31, 2025. With regard to forecasting, EDC
has provided updated loan assignment volume
forecasts to the Canada Revenue Agency (CRA) in
July and October 2024 and will continue to share
updated loan assignment volume forecasts with
CRA as new information becomes available.
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