The Canada Revenue Agency (CRA) may face some hurdles in collecting the money loaned through COVID-19 pandemic relief programs, like the Canada Emergency Response Benefit (CERB), according to a tax lawyer.
The CRA announced last month that it would start issuing legal warnings and potentially take steps to recover overpayments of all COVID-19 programs, including CERB.
After ruling many people ineligible for these payments, the tax agency seeks to regain the money — a total of about $9.53 billion.
“If you divide $9.5 billion by $20,000 or whatever people have received in overpayment, it’s a lot of people,” Dale Barrett said in an interview with CTV Your Morning on Tuesday. Of that $9.53 billion sum, the CRA seeks to collect $5.41 billion from CERB overpayments alone.
Barrett noted several Canadians who received these pandemic relief payments have left the country and aren’t set to return.
“We hear about people who are out of the country, who shouldn’t have received the money, who would never come back, and who are going to get away with it. There’s just so many people who this is affecting,” Barrett said.
There are people who have already “gotten away” without repaying the loan, Barrett adds.
“I’ve dealt with so many people who are out of the country … who will get away without paying it, but there are a lot of people in the country who may get away without paying it,” the lawyer said.
Some Canadians may be unable to afford the CERB repayment.
“Once they’re assessed by the CRA, they can do a consumer proposal, they can do a bankruptcy, the government may never see those dollars but I believe the vast majority of people who are gone after – who are pursued by the CRA – will eventually end up paying that,” Barrett said.
Through the CERB program, Canadians could receive up to $2,000 monthly in financial support if the COVID-19 pandemic affected their employment.
What to do once you’ve received a warning
Barrett explained once someone receives a warning from the CRA, they can ask for another review of their financial situation and whether they have to repay the government.
“They can provide additional information to (the) CRA and ask for a second review of the matter that will go to, generally, someone who didn’t look at the file the first time around,” he said.
“The goalpost changed, the rules for qualifying for the benefits changed from time-to-time, so people have to prove that at the time they applied that they were qualified.”
Failing to provide adequate proof, Barrett explained, will bring the CRA back to your door. In which case, if someone is incapable of paying the money back, Barrett said the only recourse left — outside of declaring bankruptcy or death — is to head to a federal court for judicial review.
Otherwise, Barrett says the CRA can freeze bank accounts, seize assets or put a lien on your home.
“They can generally make your life fairly miserable by assigning a collector to your files who will hound you day in and day out. So they’re very, very good at collecting,” Barrett said.
The tax agency has said it will only take legal action for those who are unresponsive or uncooperative, and who have also been deemed capable of paying the money back.
So far, the government’s efforts have brought on more than 1,000 court battles between claimants and the CRA.
With files from The Canadian Press
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