EI fraud surpasses $100-million, but government sees long collection times

OTTAWA – The collection bill for money fraudulently claimed through the employment insurance program has surpassed $100 million, but the government doesn’t expect to collect the money any time soon.

Figures released to The Canadian Press show that debt collection is increasingly being pushed off to future years, even as the government appears to be more efficient at uncovering bad debts.

The figures show that in fiscal year 2013-14, which ended March 31, 2014 and are the most recent figures available, the department responsible for overseeing EI — Employment and Social Development Canada —watched the collection bill hit almost $102.7 million.

That’s the amount the government aims to collect at some point over the next six years.

READ MORE: How do you solve Canada’s labour instability trap?

In fiscal year 2007-08, the second year of the Conservative government, the value of fraudulent claims the government expected to collect at some point in the future stood at just under $25.3 million, or about one quarter of what was expected in 2013-14.

It’s unclear why the department is putting off more and more of its debt-collection efforts into the future. The department didn’t explain why, nor did the minister’s office.

“Our Conservative government will not apologize for ensuring taxpayers’ money is treated with respect,” Employment Minister Pierre Poilievre said in a statement. “Our party, unlike the Liberals and NDP, is committed to keeping taxes low for Canadians, which means recouping funds when they are improperly claimed.”

READ MORE: Number of Alberta workers collecting EI spikes

The longer the debt goes uncollected, the greater the likelihood the government will have to write off millions in benefits wrongfully handed out to Canadians for a variety of reasons, including if the debtor dies or declares bankruptcy, or that the debt itself has passed the 72-month statute of limitations for its collection.

“They seem to be putting effort in finding the fraud…but if this is actual, honest-to-goodness fraud, we have a better chance of getting it now than we would five years from now,” said Angella MacEwen, senior economist with the Canadian Labour Congress.

But even as more and more of the collection of those bad debts is being postponed for future collection, the government appears to be getting better at rooting out fraud.

READ MORE: How lack of affordable, accessible child care hurts the economy

The amount collected in fiscal year 2006-07 was about $1 million of bad claims that year.

The amount collected steadily rose in subsequent years, and peaked in fiscal year 2012-13 when the government collected $31.4 million, the same year the Conservatives faced accusations they were requiring officials to meet quotas in the fraud hunt, a charge the government denied.

EI officials continue to keep a close eye on claims.

The amount of fraud, however, remains low relative to the total amount handed out. Of the more than $15 billion in benefits handed out annually, less than one per cent is for fraudulent claims, MacEwen said.