While hundreds of thousands of Canadians face the prospect of having to repay the money they got from the Canada Emergency Response Benefit (CERB), Prime Minister Justin Trudeau said on Friday it should not be a source of stress on anyone.
Speaking at a media conference, Trudeau was asked about the CRA’s recent letters to roughly 441,000 Canadians, suggesting they might need to repay some or all of the monthly $2,000 payments they received by Dec. 31, 2020.
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The letters sent to Canadians ask for more information from recipients, in order to determine if they meet the income eligibility criteria for CERB. Trudeau said this is because some people have committed fraud and companies have also profited in ways that “aren’t right.”
But, he said if Canadians made a “good faith mistake” when filling out the income eligibility for CERB, then they will not be “punished.”
“We didn’t deliver support for millions of people who needed it just to claw it back at Christmas,” Trudeau said.
“Already we are seeing over a million repayments of people who got the CERB unjustly, or extra CERB payments, that’s because Canadians are fair-minded and responsible,” said Trudeau.
“I don’t want this to be an extra stressor on a Christmas that is already not like others.”
The prime minister said people can feel “reassured that any good-faith mistakes will not be penalized.”
“We are going to work with people over the coming weeks and months, to ensure they get the support they need.”
When the CERB was first launched, the government said it would check afterward on eligibility and recoup wrongful payments, part of a process Trudeau described as a way to help Canadians have confidence in their institutions during a crisis and root out fraudsters.
CERB recipients say the mistaken ineligibility is due to a lack of a clear explanation from the CRA, specifically when it comes to the income threshold for claiming the benefit.
An eligibility webpage for the benefit states that in order to claim the $2,000 CERB payment, recipients must have earned a minimum of “$5,000 (before taxes)” in the last 12 months, or in 2019, from employment or self-employment income, or from maternity or parental benefits.
But the CRA said this income threshold is calculated after a recipient has deducted their expenses, a fact that is not spelled out explicitly on the eligibility webpage.
That means the CRA considers Canadians who may have cleared the threshold before expenses but did not clear it after expenses to be ineligible for the CERB.
The agency denies changing the rules, and said it already calculates self-employment income as “net pre-tax income” or, in other words, “gross income less expenses.” It pointed out that another webpage that contains a Q&A about CERB does include this distinction.
CRA spokesperson Sylvie Branch told the Canadian Press that individuals who got the letter should not see it as a final determination they must pay back the money — only that the agency does not yet have enough information from recipients to confirm CERB eligibility.
Branch also said the Dec. 31 date in the letter is not a payment “deadline,” just a preferred date to avoid impacting 2020 income tax returns.
When Trudeau was asked whether some people will not be taxed, the prime minister said in French: “I can confirm that people who made honest mistakes … don’t have to worry about taxes. I don’t want people to get worried. I have made a promise that we shall help the people who need help.”
— With files from the Canadian Press