Report 7 - Canada Emergency Wage Subsidy (Office of the Auditor General of Canada)

Summary

This is the "At a Glance" page for Report 7 of the Auditor General of Canada, an audit of the Canada Emergency Wage Subsidy (CEWS), completed 12 January 2021 and tabled 25 March 2021. It finds that the Department of Finance Canada performed a partial analysis of the program's initial design, and that the Canada Revenue Agency delivered payments rapidly but chose not to establish tighter controls. The subsidy covered up to 75% of qualifying wages (up to $847 per week per employee), was expected to cost approximately $97.6 billion by the end of 2021–22, and drew 1,741,919 applications. Recommendations include publishing an economic evaluation and using business intelligence information for targeted audits.

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Full text

At a Glance Report 7—Canada Emergency Wage Subsidy

Why we did this audit

- The Canada Emergency Wage Subsidy (CEWS) is one of the largest initiatives the government has ever undertaken.
- CEWS is one of the key programs for supporting employers and economic recovery after the pandemic.

Our findings

- The Department of Finance Canada performed a partial analysis of the initial design of the CEWS program. It subsequently performed a sound and complete analysis to inform the changes to the program.
- Although the Canada Revenue Agency delivered the subsidy payments rapidly, it chose not to establish tighter controls, and it lacked the sub‑annual and up‑to‑date earnings and tax information it needed to efficiently assess applications.

Key facts and figures

- The purpose of the CEWS is to help eligible employers retain their employees during the pandemic by subsidizing up to 75% of qualifying wages (up to $847 per week and per employee).
- According to the Department of Finance Canada’s estimates, CEWS is expected to cost approximately $97.6 billion by the end of the 2021–22 fiscal year.
- Canada Revenue Agency CRA received 1,741,919 applications to CEWS.

Our recommendations

- The Department of Finance Canada should complete and publish an economic evaluation of its wage subsidy programs.
- The Canada Revenue Agency should strengthen its efforts toward tax compliance for GST/HST to ensure that it has the information needed to do validations for the programs that it is administering.
- To improve the integrity and validation efficiency of any future emergency programs, the Canada Revenue Agency should use automated validations with a unique identifier that can be used in all programs.
- The Canada Revenue Agency should strengthen the integrity of the Canada Emergency Wage Subsidy program by using business intelligence information as soon as it is available in order to conduct targeted audits.

See full list of recommendations and responses

Related information

Entities
Completion date | 12 January 2021
Tabling date | 25 March 2021
Related audits | 2021 Reports of the Auditor General of Canada to the Parliament of Canada Report 6—Canada Emergency Response Benefit 2021 Reports of the Auditor General of Canada to the Parliament of Canada Report 8—Pandemic Preparedness, Surveillance, and Border Control Measures 2021 Reports of the Auditor General of Canada to the Parliament of Canada Report 4—Canada Child Benefit—Canada Revenue Agency

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