Canadians who make fraudulent claims for the coronavirus emergency benefit could face a fine of up to $5,000, a penalty double what they received in improper benefits and jail time.
Those who refuse to go back to work could also face financial penalties.
That’s according to a draft version of legislation expected to be tabled by the federal government on Wednesday that aims to fill in some of the gaps in the existing rules.
Global News has obtained a copy of that draft bill, which was first reported on by the Globe and Mail.
While the government has said from the start of the Canada Emergency Response Benefit (CERB) program that those making fraudulent claims will face penalties, they have not said what those penalties could be.
The draft legislation, however, lays that out for the first time.
Making a false or misleading claim, failing to declare all income, knowingly receiving an income benefit that a person isn’t eligible for, non-disclosure of facts or facilitating omission of any facts are all listed as offences under that legislation.
Committing any of them will land a person a fine of up to $5,000 “plus an amount of not more than double the amount of the income support payment that was or would have been paid as a result of committing the offence.”
They could also get hit with the fine of up to $5,000 plus up to six months in jail.
Continuing to collect the benefit while refusing to work will also result in penalties.
The legislation says individuals in that category include those who “fail to return to work when it is reasonable to do so and the employer makes a request for their return; fail to resume self-employment when it is reasonable to do so; or decline a reasonable job offer when they are able to work.”
Doing so could result in a retroactive fine of up to triple the amount improperly claimed once the individual was able to return to work.
Vern Krishna, a tax law professor with the University of Ottawa and a tax lawyer with Toronto’s TaxChambers LLP, said making the financial penalties retroactive is legal but any attempts to do the same for jail time would likely be challenged in court.
Krishna said he expects the government didn’t include any penalties in the original legislation laying out the benefits because they were simply rushing to get it rolled out.
“They didn’t think the thing through at the time,” he said.
“They were eager to get out of the gate and they had not worked their way through the entire structure so now we’re into June and they’ve been working on the structure and of course want to hit with a heavy stick.”
While the government has said since it unveiled the program that anyone abusing it will face “consequences,” it has also faced criticism from Conservative critics who argued it should do more to prevent abuses from taking place in the first place.
Since the Liberals hold a minority government, they will now need the support of at least one other party to pass the legislation.
NDP Leader Jagmeet Singh said on Tuesday morning he has concerns about the bill and worries it could force vulnerable workers into unsafe conditions.
In his daily briefing with journalists later that same day, Prime Minister Justin Trudeau was asked about those concerns and said he is open to working with the other parties on amendments to the bill.
“I understand his concern but that is not at all the intention of this bill,” Trudeau said about Singh’s fears.
“We are giving ourselves the ability to sanction fraudsters who are trying to deliberately take advantage of the system during a crisis and when people are most vulnerable. We do not have the intention of penalizing people who made a mistake but we have to have a system that is capable of targeting people who deliberately defrauded the system.”
The Bloc Quebecois and Conservatives have both reportedly told the government that any support from their parties for the bill will be tied to the government presenting a fiscal update: in other words, no fiscal update, no support for the bill.
The federal budget was supposed to be tabled in March but that was cancelled due to public health concerns about the spread of the coronavirus.
Trudeau says providing a fiscal update isn’t feasible when the government can’t make any predictions about the state of the economy, and the baseline economic metrics that normally ground any assessment are still unsettled from the global uncertainty.
“The challenge with any fiscal update is as the economy starts up again, it’s very difficult to know what that will look like,” he said.
“There are so many things that we simply don’t know that making projections about what our economy could look like six months for now or a year from now would be an exercise in invention and imagination.”
The House of Commons is expected to debate and vote on that bill on Wednesday.
— With files from Global News’s Bryan MullanView link »