Ignore cheating in CERB, EI claims, memo says
Employees told not to halt payment or trigger an investigation when they see abuse
Federal employees vetting the millions of applications for emergency and employmentinsurance (EI) benefits during the pandemic have been told to ignore most potential cases of cheating, despite reports of widespread fraud.
If employees detect possible abuse they should still process the payment and should not refer the file to the department’s integrity branch, says a memo issued last month by Employment and Social Development Canada.
It’s unclear whether anyone would be available to investigate the questionable cases, anyway. The memo says the department has suspended “compliance and enforcement” of the EI program, which is helping manage Canada Emergency Response Benefit (CERB) payments.
Meanwhile, a source familiar with the situation claimed 200,000 applications have already been “red-flagged” as possibly fraudulent because of dubious claims of past employment income and other factors.
Employment minister Carla Qualtrough has said the government knew there was a heightened risk of fraud with the pandemic-aid programs but wanted to get the money out to Canadians in need as quickly as possible, working later to claw back any unwarranted payments.
But the memo seems to take that approach a step further, encouraging civil servants to turn a blind eye to abuse.
It’s one thing to push the payments out rapidly with few questions asked, another to brush aside actual evidence of abuse, said Aaron Wudrick, federal director of the Taxpayers Federation of Canada.
“Governments should be assuming that everyone is honest, but that doesn’t mean they should suspend any and all attempts to follow up potential cases of fraud,” said Wudrick. “Even a small percentage (of fraud) can mean hundreds of millions of dollars wasted.”
But Marielle Hossack, a spokeswoman for Qualtrough, said the system was designed to disperse the funds quickly with “backend safeguards” to ensure that any payments made to ineligible recipients are eventually repaid.
“We intend to continue to regularly conduct file reviews and investigations to identify and address cases of error, fraud, and abuse,” she said in a statement. “We are using computer tracking, data analytics and linked data systems to detect mispayments and fraudulent activity.”
As for applications that arrive from abroad, if the person is a resident of Canada and outside the country “for a temporary period of time,” they can still access CERB, said Hossack.
Another prominent publicspending watchdog defended the approach, suggesting Ottawa has to take some risk as it addresses historic levels of unemployment that were in effect created by government fiat.
“In normal times, it is essential that the EI integrity branch do their job to limit abuse and error,” said Keven Page, former parliamentary budget officer.
“(But) in these unusual times, it is the government who is shutting down the economy to contain spread of the virus,” said Page, now CEO of the University of Ottawa’s Institute of Fiscal Studies and Democracy. “The government is using its spending power to buffer the impact of unemployment and loss of business.”
Auditors, he added, “will have a number of years to address program error – and they will.”
The CERB pays $500 a week during an initial four-month stretch for people rendered jobless by the pandemic and lockdown, so long as they made at least $5,000 in 2019 or the previous 12 months. Those eligible for EI because of their work history are receiving the same amount for that time period, before reverting to regular payments.
The memo was distributed in late April on the ESDC/SC IntraWeb.