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Canada’s Auditor General says the federal government in Ottawa mismanaged billions of dollars worth of loans to businesses during the Covid-19 pandemic.
Specifically, the Auditor General says that about $3.5 billion was paid to more than 77,000 ineligible businesses that applied for the Canada Emergency Business Account (CEBA).
That’s nearly 10% of the 900,000 businesses that received loans through the Covid-19 program, which was introduced by the current Liberal government in 2020.
The interest-free loans of up to $60,000 were quickly allocated to help small and medium-sized businesses with payroll, rent, and insurance as businesses were forced to close to control the spread of Covid-19.
Up to $20,000 of the loans was forgivable if businesses repaid the loans by a certain date.
The Auditor General says that the government loan program was plagued by “poor program management and oversight failure.”
In a statement, Canada’s Finance Minister Chrystia Freeland said that while the Auditor General’s report offers some useful recommendations, it fails to acknowledge that the program, “was designed and delivered during a global pandemic.”
The Auditor General’s report concludes that much of the government’s spending during the pandemic went to business owners and workers who shouldn’t have received any funds.
The government has pushed back the deadline for businesses to repay the Covid loans multiple times, and the Auditor General notes that there are still $8.5 billion of loans to be repaid.
Ottawa’s spending during the Covid-19 pandemic increased the federal government’s debt levels by two-thirds, pushing the country’s debt-to-GDP ratio above 40%.
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