Self-employed Canadians who got the Canada Emergency Response Benefit (CERB) under the mistaken impression they were eligible shouldn’t have to repay it, says NDP Leader Jagmeet Singh.
“Prime Minister Justin Trudeau should issue a directive very clearly stating that self-employed workers (who) have applied in good faith … should not be the subject of any scrutiny,” Singh told reporters on Tuesday.
About 441,000 “educational” letters from the Canada Revenue Agency were recently sent to CERB recipients telling them to verify their eligibility.
Many self-employed workers have learned that CERB eligibility was based on net — not gross — income of $5,000 or more in 2019, or in the 12 months before applying.
While the CRA usually uses net income — gross income minus expenses — to calculate income from self-employment, the Star reported that, in some cases, Canadians were told by call-centre agents that gross income was being used.
through the Wayback Machine — doesn’t make it clear it was net income. The “net” requirement was added to the page in late April, not long after Trudeau announced that the CERB would be available to Canadians earning less than $1,000 a month.
The CRA began accepting CERB applications on April 6.
Singh said it’s unfair that self-employed CERB recipients who were led to believe gross income was being used to calculate eligibility will now have to repay amounts.
“They applied, with all the information available, appropriately. They should be told it’s okay,” he said.
In an email last Friday, CRA spokesperson Sylvie Branch said net income was always assessed, and “there has been no change to this position during the lifecycle of the CERB.”
However, that section was added sometime after April 21 and before April 25, according to the Wayback Machine.
Before the section was added, information about eligibility of self-employed income was found under the tab “What are the eligibility criteria for the Canada Emergency Response Benefit?” The tab did not specify net income.
Singh also referred to comments made by then-finance minister Bill Morneau in April that CERB eligibility would be based on “earned revenue,” which suggests gross income.
Employment Minister Carla Qualtrough told MPs last week that when she spoke of it in the past, she specified “net income” was being assessed.
An email sent to her office on Tuesday noting reports of call-centre agents giving out incorrect information, and asking if the government was planning to fix the problem, was forwarded to the CRA.
“The CRA takes every effort to ensure its call-agent staff and its resources provide the right information that Canadians depend on, and continues to take efforts to do so,” said agency spokesperson Pamela Tourigny.
If an ineligible worker received $2,000 for each of the seven months of CERB, he or she would have to repay $14,000 to the CRA. There are no penalties, and no interest will be charged on delayed repayments.
The agency has paused all new debt collections, including of CERB repayments, although it’s encouraging those who have to repay the benefit to do so before Dec. 31 in order to avoid problems at tax time.
John Cosgrove, a self-employed artist in St. John’s, N.L., also told reporters he has to repay the CERB, because the arts grants he received in 2019 are not being counted as income.
The CERB was hastily rolled out in April to provide income support to Canadians reeling from COVID-related layoffs. Nearly nine million Canadians have received it.
Confusion over eligibility began as soon as the benefit launched, however. At a House of Commons committee in April, Qualtrough was asked whether expecting mothers, temporary foreign workers, and single parents qualified.
During the meeting, Conservative MP Dan Albas noted that other government ministers had stated that students were eligible, as long as they’d earned $5,000 in the last year, without mentioning that losing work specifically due to the pandemic was another requirement.
More than one million CERB repayments have already been made, Branch said last week. The CRA is offering flexible repayment plans to Canadians who are facing financial difficulties.