CERB fraudsters could face fines or jail time, draft bill shows

Hundreds of fraud cases linked to CERB The Canadian Anti-Fraud Centre says that between March and June, they received more than 700 reports of CERB-related fraud.

OTTAWA — The federal government is looking to put into law new punishments, including jail time and fines, for Canadians who are found to be defrauding the Canada Emergency Response Benefit (CERB) program, according to a copy of a draft piece of legislation that has not been tabled in the House of Commons.

According to the draft bill obtained by CTV News, the government wants to impose tough new enforcement mechanisms ranging from fines to six months of jail time if someone has made a “false or misleading” benefit claim, knowingly failed to declare income for the period which they applied for the benefit, received a benefit cheque they were “knowingly” not eligible for, or aided someone in committing one of the aforementioned offences. The proposed legislative changes were first reported on by The Globe and Mail.

Under the proposed legislation, the amount of the fine could be up to $5,000 plus up to double of the amount of the benefit that was received or would have been received in CERB due to the fraud.

The program offers $2,000 per month to those out of work. It was introduced in late March in an effort to help those who were out of work due to the COVID-19 pandemic and the cross-Canada shutdown it prompted to make ends meet. As of June 7, more than 8.4 million Canadians have applied for CERB, receiving a total of $44.6 billion.

The aid program was initially set up to be something Canadians could claim for up to 16 weeks, with the requirement to re-apply every four weeks. Now, the government is looking at allowing Canadians to apply to collect the CERB “for any period of four weeks falling within the period beginning on March 15, 2020 and ending on July 2020” in addition to being able to apply to cover “any period of two weeks falling within the period beginning on July 5, 2020 and ending October 3, 2020.”

The latter offering of two weeks of pay could be a way for the federal government to offer paid sick leave to Canadians who don’t currently have that benefit through their employer and would need to stay home in case they were showing symptoms of COVID-19 or have to stay home to care for someone who is. The current public health guidance suggests two weeks in self-isolation is required for anyone who suspects they might have the virus.

The government also wants it written in law that workers would not be eligible for the income support if they:

Canadians who knowingly breach these eligibility criteria could face a fine of up to three times the amount that was received or would have been received in CERB money.

These proposed changes come as the government is mulling how to evolve the program as the economy reopens and many businesses are able to bring their staff back into work. The initial hope was that once the 75 per cent wage subsidy program got off the ground, a large number of laid-off workers would be brought back on the job with the help of the subsidy, but so far take-up has been far below what was initially projected by Finance Canada.

A government source speaking on background told CTVNews.ca that the rationale for proposing these changes to CERB are meant to address the concerns around fraudulent claims and potential disincentives to return to work, as well as allowing Canadians flexibility with the time they need to take off work going forward.

CERB SCAMS A CONCERN

Fraudulent CERB claims and the government’s ability to track down and enforce penalties on Canadians who are intentionally scamming the system has been an ongoing question since the direct financial assistance program first rolled out.

Last week, the Canada Revenue Agency updated its “Leads Program” online to allow Canadians who suspect CERB fraud to report it to the government. The CRA is also looking for intel on any possible misuses of the Canada Emergency Student Benefit and the Canada Emergency Wage Subsidy programs.

Last month, reports emerged that staff processing aid applications were told to ignore red flags of individuals not meeting the criteria and to make payments even when there was suspected fraud. Prime Minister Justin Trudeau later acknowledged that his government chose speed over scrutiny in processing aid payments and would clean up after the fact.

Fraudulent claimants aside, some Canadians may have inadvertently "double-dipped" and received two payments when they were only entitled to one. Those individuals are able to return or repay the CERB benefit online or by mail. The government has said they will be looking to claw back all misappropriated funds by tax time next year.

OTHER AID, LEGAL TIMELINE CHANGES

The draft bill also includes proposed changes to the wage subsidy program, but they appear to be largely technical such as the wording and timelines around aspects of the eligibility criteria and terms for employers to apply to have their workers’ salaries subsidized by 75 per cent.

Under this legislation, the government is also proposing to make the changes needed in order to implement promised one-time payments to eligible Canadians with disabilities.

As well, as already promised by the federal government, the draft bill includes a section that would rectify the risk of Canadians being penalized for missing key deadlines in ongoing legal matters due to the ongoing COVID-19 pandemic.

There are numerous fixed deadlines in various civil litigation proceedings, from bankruptcy to divorce, and the draft bill proposes to enact a “Time Limits and Other Periods Act (COVID-19)” which would address the needs for flexibility with certain legal timeframes.

Specifically, if passed as drafted, the bill would suspend for six months certain time limits related to court proceedings, temporarily allow ministers to extend or suspend time limits going forward for the next six months, and wrap in parliamentary oversight on any extensions or suspensions granted.

TO BE DEBATED WEDNESDAY

The bill—which will be the fifth piece of emergency legislation passed since COVID-19 was declared a pandemic—is expected to be the focus of an emergency sitting of the House of Commons on Wednesday.

House Speaker Anthony Rota announced late Monday that the House would be recalled to deal with this latest piece of government legislation. The Liberal minority will need the backing of at least one other major party in the House of Commons to see the bill pass.

The emergency sitting will follow the special all-party COVID-19 committee that is now meeting four days a week in a hybrid format that allows some MPs to participate from inside the chamber, while others can join in virtually from their ridings, through video screens set up in the House of Commons.

As part of the standing agreement on holding any emergency sittings of the House of Commons, the government has been presenting the draft bill to opposition parties in advance under embargo, in part to allow for pre-study of what’s being proposed before MPs vote on whether or not to fast-track its passage.

Ahead of the expected sitting, both outgoing Conservative Leader Andrew Scheer and Bloc Quebecois Leader Yves-Francois Blanchet spoke about the bill and the demands they’ll be looking to negotiate with the government on, meaning the proposed text that is ultimately tabled could differ from the draft proposal.

With files from CTV News’ Jonathan Forani