Audits Of Canada Emergency Wage Subsidy Claims Underway

A key part of the Canadian government's response to the COVID-19 pandemic has been the Canada Emergency Wage Subsidy (CEWS). In its most recent costing estimate, the Parliamentary Budget Office estimated that the CEWS will cost $85.6 billion in 2020-21 and $13.9 billion in 2021-22 (with about $11.5 billion and $1.9 billion, respectively, recovered in corporate income taxes), making it the costliest element of Canada's COVID-19 Economic Response Plan.

With a historic deficit, the Canadian government will need to find solutions to offset its unprecedented spending. The Canada Revenue Agency (CRA) has already informed taxpayers that it intends to closely scrutinize CEWS claims. And it has issued warnings that employers that do not meet the CEWS eligibility criteria or that abuse the program will face severe penalties, even fines, in addition to having to reimburse, with interest, amounts previously received.