Help now, and clean up later
When the federal government launched the Canada Emergency Response Benefit, or CERB, just seven weeks ago, the goal was crystal clear:
Get money out to people whose jobs have vanished due to the COVID-19 lockdown as fast as possible — and sweat the consequences later.
That’s how the program was designed, and that’s how it was sold. Anyone who wanted the money simply had to sign an “attestation” that they qualified, and they’d start receiving $2,000 a month.
Big parts of the economy were vanishing because the government had ordered them to close immediately to try and halt the pandemic. It was the very definition of an emergency, and the government responded with an emergency measure.
Everyone knew some people would try and cheat the system. They always do. And no one tried to pretend otherwise. From Prime Minister Justin Trudeau on down, officials openly acknowledged there would be fraud. They said they’d deal with that down the road, once the immediate crisis had eased.
Yet here we are, seven weeks later, and from some quarters the cry is going up: the CERB is rife with fraud! And the Liberals are turning a blind eye! In the pages of the Toronto Sun, Trudeau is accused of treating the public purse like his “personal piggy bank” for partisan gain.
Exhibit A in this narrative is a report that employees at Employment and Social Development Canada, which administers the CERB, have been instructed in a memo or note (what it’s called is in dispute) not to hold up applications even if it appears there is “potential abuse.” Only “urgent” cases should be investigated, it reportedly says.
It’s not clear exactly what’s going on here, but at bottom there is no dispute. The government freely admits it has been erring on the side of getting money out the door, and accepting that there will be more fraud as a result.
That’s what Trudeau repeated on Thursday. The government deliberately did not include a security check or eligibility screening process for the CERB, he said, because “we’d still be waiting to get those cheques out.”
The opposition parties all signed on to that concept, and unanimously supported the government’s relief package. They could have objected that it would be too vulnerable to fraud, but they didn’t. They, too, knew how urgent the situation was in late March.
Now, as we know, millions have lost their jobs or seen their hours reduced because of the lockdown. And the hardest-hit have been low-paid workers who are disproportionately represented in industries like restaurants, hotels and retail and the gig economy. Most couldn’t rely on traditional Employment Insurance.
Just imagine if all those people had been thrown out of work with nothing to fall back on. Or if they had to go through a cumbersome qualification process to weed out the cheats.
As Trudeau noted, they’d still be waiting for their money and the government would, quite rightly, stand accused of failing to provide help when it was most needed. By now we’d be in the midst of a humanitarian crisis, with untold numbers of people unable to buy the most basic necessities. And the economy would be in even worse shape than it is.
Instead, as of May 10, some 7.38 million have applied for the CERB, and $30.5 billion has already been paid out. That’s record speed for creating a new government program and getting it up and running.
Of course there’s been fraud, as well as people who will owe money in the end because they unwittingly received both the CERB and other government benefits. And with such huge numbers, even a fraud rate of one per cent (standard for such programs) will add up quickly.
The government must certainly make sure it recovers that money through the tax system in the months ahead. But far better to make some mistakes now, than to fall short when the need is greatest.
The government should certainly make sure it gets money back from cheaters