CRA admits 'unclear' CERB communications led to mistaken applications

TORONTO — As millions of Canadians rushed to apply for the Canada Emergency Response Benefit in the early rollout, CRA call-centre agents were given wrong instructions for how self-employed Canadians would be assessed for their eligibility, according to the head of the union that represents the call centre workers.

“It was erroneous,” Marc Brière, president of the Union of Taxation Employees, told CTVNews.ca on Friday. “I’m calling it an honest mistake for the first three weeks of the program.”

The CRA now says messaging wasn't clear on the subject of net and gross income with its employees and the general public.

“The Government of Canada acknowledges that communications on this topic were unclear in the first days after the CERB was launched. This includes both the CERB webpages, and the information provided to call centre agents,” CRA spokesperson Sylvie Branch told CTVNews.ca on Friday.

“We regret that this lack of consistent clarity led some self-employed individuals to mistakenly apply to the CERB despite being ineligible.”

As CTVNews.ca first reported, some Canadians have been asked to repay up to $14,000 from CERB by Dec. 31 because they were never eligible. To be eligible, self-employed Canadians had to have received more than $5,000 in income in 2019 or in the previous 12 months before applying.

Confusion arose as the CRA counts self-employment income only as net pre-tax income, despite the word “net” not being included on applications or on the “Who is eligible” page for CERB.

It wasn’t until sometime after April 21 — more than two weeks after applications opened — that the CRA updated a Q&A page online to include specific language on net income.

But even as that change was made, Brière said CRA agents received different guidelines internally. He said that written instructions provided to agents stated that gross income, not net, was how someone’s eligibility for CERB would be determined. Those guidelines, though inaccurate, were communicated to callers seeking clarity.

“It was specified in brackets: gross income, not net income,” Brière said.

Brière said there’s no way to know how many people received the inaccurate information. More than 300,000 Canadians applied for CERB in the first few hours that applications opened, and millions more applied in the weeks that followed. Now, the CRA has sent 441,000 “educational” letters warning Canadians who received CERB that they may need to repay the funds because the agency has been unable to confirm their eligibility.

In one instance, a New Brunswick woman says she may need to sell her home to cover her unexpected CERB repayment. In another, a B.C. man is selling off his truck, tools and closing down his business of 33 years.

The mistake was eventually identified after a CRA agent noticed the discrepancy between the internal guidelines and the Q&A page online, Brière said. The agent flagged the issue to their manager, and Brière said it made its way all the way up to Employment and Social Development Canada.

“They came back and advised the CRA at HQ, which transferred back the message to the agents right away, that there was a mistake. It should be net income. When they talk to taxpayers, they should refer to the net income, like the website was saying, and not the gross income,” Brière said.

The CERB program was rolled out quickly in order to get funds to as many Canadians as possible, with money going to more than 8.9 million people.

In a statement on Friday, the CRA reiterated that there will be no penalties or interest in cases where CERB needs to be repaid.

“However, we recognize that, for some individuals, repaying the CERB could present a significant financial hardship. For this reason, we will give Canadians more time and flexibility to repay based on their ability to pay. As the Prime Minster said yesterday, we will work with impacted individuals on a case-by-case basis, and we expect to be in a position to provide more details in the coming weeks,” Branch said.

Brière said he decided to speak out because he’s upset that some CERB recipients affected by the mix-up are unleashing their anger at CRA agents over the phone.

“Some agents are very affected by this and stressed out,” said Brière, who represents more than 28,000 CRA employees. “They are being insulted on the phones by furious taxpayers. And I can understand that some people are upset, I totally get that. But unfortunately it’s the people who only did their job that are taking the fury of some taxpayers.”

Brière said CRA agents should be proud of their work in helping millions of Canadians access much-needed money in the early days of the pandemic. They should not be blamed for a mistake they didn’t make, he said.

“I don’t want them to be held responsible for something that they did not do wrong. They were following the instructions,” he said.

Prime Minister Justin Trudeau said Friday that people who have been contacted by the Canada Revenue Agency about repaying Canada Emergency Response Benefit funds doled out during the first wave of the pandemic shouldn’t stress about paying it back over the holidays.

“We were serious when we said we would be there for people. We didn't deliver support to millions of Canadians who needed it just to claw it back at Christmas,” Trudeau told reporters on Friday, in an apparent contradiction to the directives from the CRA.

“Be reassured any good faith mistakes will not be penalized, will not be pursued. We're going to work with people over the coming weeks and months to ensure that people get the support they need,” Trudeau said.

“These letters should not be a source of anxiety for anyone.”

In letters sent to Canadians flagged by the CRA for possible repayment, the CRA warned that tax slips could be issued if repayments are not received by Dec. 31.

Now, Trudeau is telling them not to worry about it over the next few weeks.

“Already we've seen over a million repayments from people who got the CERB payments unjustly or extra CERB payments and that's because Canadians are fair, fair minded, and responsible. But every step of the way we promised to be there for vulnerable people so I don't want this to be an extra stressor on a Christmas that is already not like others,” he said.

NDP Leader Jagmeet Singh has called on Trudeau to fix the situation. In a letter sent Dec. 10, Singh said the government should instead focus on cracking down on big corporations taking advantage of tax loopholes.

“These people did nothing wrong. They are artists and small business owners. They are people forced into poverty by the pandemic. They needed support from your government to keep their head above water and now, you are penalizing them, just before the holidays,” Singh wrote.

Green Party Leader Annamie Paul, who was the first federal leader to address the issue, has called on the government to suspend CERB repayments until 2021 and called on the CRA to propose “a much more compassionate plan.

More than 32,000 people have signed an online petition urging the government to halt CERB repayment requests until an investigation has been conducted into the “misleading eligibility requirements” communicated online.

With files from CTV News’ Rachel Aiello in Ottawa