Some self-employed Canadians are being let off the hook on repayment of thousands of dollars received through the Canada emergency response benefit (CERB).
Prime Minister Justin Trudeau made the announcement in a news conference outside his residence at Rideau Cottage today.
“For people who accessed CERB based on their gross income instead of net income — as long as you met the other eligibility criteria, you will not have to return your CERB payments,” he said.
“When we rolled out CERB last March, it was because people needed help in the face of a global, once-in-a-generation crisis.”
A government source not authorized to speak publicly said that self-employed Canadians who applied for CERB, and who would have qualified based on their gross income, will no longer be required to repay — provided they met all the other eligibility requirements. This policy applies regardless of whether applicants accessed CERB through the Canada Revenue Agency or through Service Canada.
Those who meet that description and have already voluntarily repaid their CERB will see the money returned to them, according to the source.
The information was first reported by The National Post.
In November and December of last year, some 441,000 Canadians received so-called education letters from the CRA saying they may not have met the requirements for the thousands of dollars in CERB payments they had received and might have to pay the money back.
Some self-employed Canadians said they were being told by the tax agency that the problem was related to how they calculated whether they met the benefit threshold: $5,000 in income in 2019 or in the last 12 months.
Many reached out CBC News to say they believed that meant all income, since there was no mention of expenses. The CRA insisted self-employment income always refers to “net, pre-tax income,” or gross income minus expenses.
PM had been unclear on repayments
But the CRA didn’t always explain it that way to taxpayers. The Union of Taxation Employees revealed that its members had been given the wrong information on how income would be calculated — and passed that incorrect information along to CRA callers for about three weeks before the problem was corrected.
At the time, Employment Minister Carla Qualtrough said her government wasn’t considering debt forgiveness for those affected.
“There’s not a conversation happening right now where we would forgive people, where we would not require people who were not eligible to pay it back. No,” she told CBC News in December.
The prime minister was less clear in a year-end interview with CBC’s chief political correspondent Rosemary Barton.
“We’re gonna work with them and I don’t want people to worry over Christmas. The system needs to be fair but it also needs to be there to support the most vulnerable. That’s the decision we took from the beginning — we’ll have Canadians’ backs.”
The prime minister was asked repeatedly if some CERB applicants might not have to repay. He said the government was looking at “a range of possibilities.”
“Everyone’s in different situations. We’re going to work with people, we’re going to look at what the options are, but I don’t want people to worry about repaying this holiday season,” he said.
The federal government is also expected to announce today that Canadians with pandemic benefit debt will have up to a year to repay the amounts owing without accumulating any interest.
The move applies to those who made up to $75,000 in taxable income in 2020 and received one of the federal government’s five pandemic relief benefits or employment insurance benefits.
