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B.C. government chasing $10.5M in COVID-19 overpayments

The province found that of the more than 11,000 B.C. Emergency Benefit for Workers files audited, 95 per cent should not have received a one-time, tax-free $1,000 payment.
Auditor General Michael Pickup said that as of the end of June, the ministry reviewed more than 11,000 files and found that 95%, or 10,454 applicants, could not demonstrate they filed a 2019 tax return and should not have received the $1,000, one-time tax-free payment.

The B.C. government is trying to claw back $10.5 million in COVID-19 relief payments, according to a report issued Tuesday by the province’s auditor general. 

The Ministry of Finance paid $643 million to 643,000 people under the B.C. Emergency Benefit for Workers program beginning in May 2020. Auditor General Michael Pickup said that, of the 11,000-plus files audited by the end of June 2022, 95 per cent (nearly 10,500) were ineligible for the one-time, tax-free $1,000 payment, because they did not demonstrate that they had filed a 2019 tax return. Doing so was one of the program’s eligibility requirements.

According to the report, the Ministry of Finance has identified approximately 45,000 files under the workers program for audit – about seven per cent of total benefit recipients – because "applicants did not appear to have filed their 2019 taxes."

By contrast, eligible families and single parents could receive up to $1,000 and individuals $500 tax-free under the B.C. Recovery Benefit for Families and Individuals. The Ministry paid out $1.3 billion, but only $54,000 has been identified for recovery. That program was rolled out just before Christmas 2020 to fulfil a campaign promise made during Premier John Horgan’s snap election.

Pickup said that eligibility was verified before payments to families and individuals, which resulted in fewer payments to ineligible applicants than the program for workers. 

“This is really up to the government to determine the controls that they want in place, both upfront, when they design a program, obviously they're aiming to get money out fairly quickly, if you're in a difficult situation,” Pickup said.

The Ministry of Finance is reviewing a third program, the Small and Medium Sized Business Recovery Grant. 

Pickup’s report also estimated the cost of response and recovery to 2021’s wildfire and flood disasters was $5 billion – more than all the natural disasters in the previous 19 years combined.

B.C. had 24 significant floods, landslides and wildfires over the last 20 years, nine of which happened since 2016. 

The November 2021 torrential rains, floods and landslides cost an estimated $3.5 billion, over half of all the estimated costs for weather-related disasters in the past 20 years. 

Pickup’s report included a qualified rating for the government’s summary financial statements due to three significant errors or omissions. Pickup is the fourth consecutive auditor general to issue a qualified report, because the government is not following generally accepted accounting standards. 

“Private sector organizations could face severe repercussions if they received a qualified auditor’s report,” Pickup said. “And the public sector should be held to a similarly high standard where qualifications to auditor reports do indeed matter.”

Pickup red-flagged the $6.48 billion in deferred revenue overstatement, which falsely implied the government had a $6.48 billion liability. The contractual obligations disclosure did not include all amounts, such as contracts below $50 million, resulting in a $3.45 billion understatement. There was also a $91 million understatement of both revenue and expenses in gambling revenues earned and transferred under the B.C. First Nations Gaming Revenue Sharing and Financial Agreement.