The speedy rollout of pandemic-era business loans appears to have come with a steep price tag.
What happened: The federal government paid out over $3.5 billion worth of Canada Emergency Business Account (CEBA) loans to ineligible businesses during the pandemic, according to a new auditor general report.
- Auditor general Karen Hogan says the feds doled out loans to more than 77,000 ineligible businesses. That’s 9% of all businesses that received the COVID-era loans.
- Fingers have been pointed at Ottawa’s reliance on IT firm Accenture, which received $313 million in contracts to build and execute the loan payment system.
Catch-up: Another auditor general report from 2022 found that Ottawa had sent $4.6 billion in pandemic benefits to individuals who weren’t eligible. The report suggested that another $27.4 billion in payments should be "investigated further” for potential ineligibility.
Why it matters: Many of these issues aren’t in the rearview mirror. The new report casts serious doubt on Ottawa’s ability to collect the outstanding $8.5 billion in CEBA loan repayments with the current system.
Zoom out: While many eligible businesses were kept afloat by the $49 billion worth of pandemic loans, insolvencies have since hit decade highs as business owners faced repaying those debts.—LA