These Islanders say the CRA wants them to repay thousands from emergency COVID-19 benefit

·6 min read
Eligible Canadians received $2,000 a month beginning in March of 2020. But some people say they were put on CERB without knowing. (Giordano Ciampini/The Canadian Press - image credit)
Eligible Canadians received $2,000 a month beginning in March of 2020. But some people say they were put on CERB without knowing. (Giordano Ciampini/The Canadian Press - image credit)

Islanders who received money from the federal government's COVID-19 emergency benefit say they're surprised to be getting emails and letters claiming they owe the Canada Revenue Agency thousands of dollars.

The federal government introduced the Canada Emergency Response Benefit (CERB) during the early days of COVID-19. The benefit was created for Canadians facing financial hardship due to the pandemic, including those who had reduced hours at work or a complete loss of employment.

Eligible Canadians received $2,000 per month starting in March of 2020. But some people say they were put on CERB without knowing, including emergency room nurse Donna Lee Cole.

Cole said she didn't apply for CERB. She said in April 2020, she applied for medical employment insurance after fracturing two bones in her hand. As a nurse, she said she couldn't work with the injury and was off work for five weeks.

When she received a CERB payment, she said she thought it was a mistake because she thought she wasn't eligible for the emergency benefit.

"I said, 'I'm supposed to be getting medical EI,' and their response was that everybody's getting CERB now," Cole said. "I wasn't sure what else to do at that point."

Cole was surprised when she received a notice of debt from the Canada Revenue Agency.

"I did get an email initially saying that I was going to have to repay and I thought that was a scam," she said.

CRA 'worked swiftly'

In a statement, Employment and Social Development Canada (ESDC) said the government "worked swiftly" to provide Canadians with financial help, which resulted in a rushed, advance payment of $2,000, to "get money into the pockets of Canadians as quickly as possible."

That included an advanced payment of $2,000, which was deducted from subsequent CERB claims.

ESDC said these deductions "reconciled the CERB payments for more than one million clients," but some returned to work or no longer claimed the benefit while these deductions were made.

In mid-November of 2021, Service Canada began sending notices to Canadians who owe money because of that advance payment.

In a statement, ESDC said, "in order to prevent causing undue hardship, flexible repayment options are available by contacting the Canada Revenue Agency."

'I was quite frustrated'

Cole isn't the only Islander CBC News spoke with who received what they say was a surprising notice of debt.

Hannah Bryenton
Hannah Bryenton

Jessica Storring works in retail and said she was off work for around two months during the pandemic.

"We had applied for regular EI and it was automatically switched over to CERB, so it wasn't what we were expecting when we applied for it," she said.

She said she was told that anyone who applied for EI and qualified was automatically switched to CERB.

Storring received a notice saying she owes some of that money back, which she wasn't expecting to see.

"I was quite frustrated just because it's two years later," Storring said. "I've had two tax returns since then. If the government would have just taken my tax returns it could have been paid off."

'Happy to defend'

Anyone who applied for employment insurance in the early days of the pandemic was automatically given the CERB benefit, which was taxable, meaning those receiving CERB had to report the income on their personal income tax return.

Sean Casey, member of Parliament for Charlottetown, said the government wanted to get money to Canadians as quickly as possible in the early days of the pandemic.

"It's probably fair to say that we anticipated at some point we would be in this situation because of a decision that the government made to get money into the hands of Canadians that needed it," he said in an interview with CBC News.

Casey said the government decided to send CERB payments out quickly and verify eligibility later, rather than taking time to sift through applications before distributing the money.

Chris Helgren/Reuters
Chris Helgren/Reuters

"This is a policy decision that the government made that I am quite happy to defend," he said.

Casey said there will not be any penalties or interest if people cannot repay immediately, and individuals have the option to challenge the audit.

"There absolutely is a process for appeal," Casey said. "If there are constituents that feel that they're hitting a brick wall … my office is prepared to help."

Since the cost of living on Prince Edward Island has increased, Casey understands not everyone can afford the bill. He said this has been an ongoing issue across Canada.

"I have great empathy for the people that are in a situation of having to pay back the government and they don't have the money," he said. "It's important that the system has integrity, and there will be empathy shown by the CRA in terms of the timing of collections."

Casey said applicants were told they would have to repay the advance payment when they received it. He also said those who applied for EI or other benefits are not the ones being audited now.

'Paycheque to paycheque'

Cole and Storring say that's not the case for them.

"Now you have this lump sum that you need to pay back and there was no indication that we would ever have to pay it back in general," Storring said.

Storring said she's heard from a number of others who are in the same position. She said she has savings she can use to repay the $2,000, but that's not an option for everyone.

Cole said she was never told she would have to repay a portion of the benefit, and said if she had known she would not have accepted it.

Steve Bruce/CBC
Steve Bruce/CBC

"If I had thought I was going to have to repay $2,000, I would have adjusted my spending habits or put [money] away in a savings account," she said. "I have the money to pay it back, but the vast majority of people do not."

Cole said she received a subsequent letter giving her the option to pay back the $2,000 in instalments of $200 per month. She said she feels lucky to have the financial ability to repay the money she now owes, but is worried for people living on minimum wage.

"I think the vast majority of our population lives paycheque to paycheque and doesn't have money stashed away in a savings account," she said. "That's a lot of money for somebody who is living hand-to-mouth."

"With the escalating cost of [living], I don't understand how they expect people to pay this back."