Federal government proposes punishing those who fraudulently applied for benefits amid the COVID-19 pandemic

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The federal government is set to table a bill that would fine or imprison people who knowingly made fraudulent claims under the Canada Emergency Response Benefit (CERB).

At a June 9 press conference, Prime Minister Justin Trudeau said that the government is in the process of drafting legislation that will provide support for people with disabilities, make CERB payments more flexible, and propose potential punishments for people who knowingly sought emergency benefits that they were not entitled to. 

Trudeau emphasized that those who received both the CERB and the emergency wage subsidy in error or out of a genuine misunderstanding of what financial support they were entitled to will not face any fines or arrest, but will instead be required to pay back any surplus funds. 

"If people made a mistake, they will not be punished. We need to have concrete measures in place to address a small minority of criminals who took advantage of the pandemic and a period of extreme difficulty to collect this benefit unfairly. We need to have measures in place regarding deliberate fraud," Trudeau said.

"If you took both [the wage subsidy and CERB], you must pay back one. We're not looking at punishing people who made honest mistakes."  

Federal NDP leader Jagmeet Singh said his party won't support the proposed legislation in its current form, arguing that the punishments could disproportionately impact lower-income and racialized Canadians. 

He said the NDP was given a copy of the draft bill on the weekend by the Liberals, ahead of a sitting of the House of Commons tomorrow.

Singh said that the tax system should be used to recover funds that should not have been paid.

"They're effectively opening up the floodgates to retroactively charging people just for applying ... That is the opposite of what we should be doing during a pandemic," he said Tuesday.

"I am outraged at the Liberal government that Prime Minister Trudeau can take a knee on one day while at the same time the Liberal government is drafting a bill that's going to penalize potentially people who applied in good faith but maybe didn't meet a certain criteria. That is wrong."

At the press conference, Trudeau said he expects that only a "very small minority" of people applied for CERB fraudulently. 

Conservative finance critic Pierre Poilievre wouldn't comment on the legislation that has yet to be tabled in the House of Commons, or on whether the Tories support extending the CERB.

He said the federal program should focus on encouraging people to get back to work.

"There's no way you can replace the workforce with a government program," Poilievre said, in an appearance with the Conservative Treasury Board critic Tim Uppal.

"That's why the economy needs to open up and people need to have the opportunity to go back to their jobs, to earn a paycheque."

The most recent federal figures show 8.41 million people have applied for the CERB, with $43.51 billion in payments as of June 4.

The figures surpassed anything the government originally expected, which is why the Finance Department recently updated its spending projections to put a $60-billion price tag on the measure, up from $35 billion.

At the same time, the government is revising downward how much it will spend on a wage subsidy program to $45 billion from $73 billion.

All the spending, and changes in plans, require a thorough review by the federal auditor general, Poilievre said. The Tories are calling on the government to increase the auditor general's budget by about $10.8 million.

The watchdog has said that's roughly what it needs to review COVID-19 and infrastructure spending without having other work fall by the wayside.

Trudeau defended rolling out the CERB without requiring rigorous checks and balances, arguing that getting the money out to desperate people quickly was more important than ensuring each and every claim was legitimate. 

He emphasized repeatedly that those who made an honest mistake and did not apply with malicious intent will not be subject to any criminal penalties.

With files from insauga.com

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