CBC Newsworld recently ran a ribbon announcing that Canadians still owe Ottawa $10.3 billion in pandemic benefits. The number has been repeated so often that it has acquired the authority of an established fact. Canadians received money they were not entitled to, the government discovered the problem, and now the money must be returned.
It is a wonderfully simple story. Unfortunately, the simplicity is largely a CRA construction.
The $10.3 billion is not an independently established measure of money Canadians wrongly received and retained. It is the accumulated product of decisions made by the agency that administered the benefits, reviewed eligibility, established debts and pursued repayment. CRA has counted what CRA decided was owing, and the resulting total is presented to the public as proof that the money is owed.
The number is real as an administrative entry. It is a tall tale – a fiction.
CERB and CRB were created in an emergency. More than eight million Canadians received CERB. The government deliberately chose to pay first and verify later, relying on applicants to attest that they qualified. It was a reasonable way to get money to people whose work had disappeared almost overnight, but it came with an obligation to recognize what the government had done. People were not required to submit documentary proof before receiving payment. Years later, CRA began asking them to produce records they had never been told to preserve, might never have possessed, or could no longer obtain.
Before considering the people CRA pursued, consider the people who paid them.
Have you ever hired a teenager to babysit? Paid someone to rake the leaves, shovel the driveway, clean the house or repair a fence? Did you issue a T4? Demand an invoice? Provide a receipt confirming payment? Did you insist that the person deposit every dollar into a bank account so that, several years later, the deposit could be matched against the work performed?
Of course not. You paid for the work, the person did the work, and both of you went on with your lives.
That does not make the income imaginary. It does not make the work fraudulent. And it does not mean the person was exempt from reporting taxable income. It means that millions of ordinary transactions take place without producing the particular documentary trail that CRA later wanted to see.
The person who paid the babysitter knows the work happened. The babysitter knows the work happened. But if the babysitter subsequently applied for CERB, CRA might ask for evidence that neither party ever imagined would be necessary.
There is a particular absurdity in making the recipient responsible for records that the person paying them was never realistically going to create. We have made the informality of the purchaser’s ordinary conduct into a potential debt for the worker.
Consider Fatana Mursal Khairy, an Afghan immigrant who earned money cleaning a bakery, a supermarket and private homes. She issued invoices and was paid mainly in cash. When the pandemic interrupted her work, she received $14,000 in CERB.
Years later, CRA demanded it all back. Her invoices did not match her bank deposits.
Ms. Khairy explained that she often gave the cash to her husband for household expenses. Whatever remained might then be deposited or transferred into her account. The money had been earned, but much of it had already performed its intended function: it had helped her family live.
CRA treated the banking discrepancies as a failure to establish her income. It also questioned the exact cost of cleaning supplies she had bought alongside household goods, although her evidence indicated that even the upper end of her expense estimate would leave her above the $5,000 eligibility threshold.
The Federal Court found CRA’s decision unreasonable. Justice Darren Thorne did not say that cash income need never be verified. He asked why CRA had failed to explain what was wrong with the invoices and corroborating letters she had supplied, and why bank statements had become effectively decisive.
There is something almost comic about an agency that administers Canada’s income tax system treating the deposit of cash into a bank account as though it were the event that created income. A cleaner earns money by cleaning. She does not earn it by depositing it. Nor does she cease to have earned it because she spends it before reaching the bank.
Scott Bishop, a handyman in British Columbia, encountered another version of the problem. He reported $6,200 in cash income from renovation work. When CRA later sought corroboration for his Canada Recovery Benefit claim, he could not obtain it from the former client despite repeated attempts. The Federal Court set aside CRA’s decision because the officer had failed to evaluate his sworn explanation.
Imagine being the person who hired Bishop. You paid him to renovate something. You were satisfied with the work and thought the transaction was finished. Years later, your former handyman is trying to reach you because the federal government wants you to help prove that you once paid him. If he cannot find you, the consequences fall on him.
The problem is even more obvious when an employer has closed. CRA can ask for a letter, payroll records or confirmation of lost work, but a shuttered restaurant cannot write a letter. A vanished employer cannot recreate a payroll file. The applicant is left trying to prove a historical fact through a third party who is no longer available.
CRA asks for records from the past as though the past were still open for business.
Then there were the honoraria. The government’s own early CERB guidance expressly included qualifying honoraria, such as payments to emergency-service volunteers, among income that could count toward the $5,000 threshold. Self-employed recipients were also caught by the confusion over gross and net income. Some applied believing that $5,000 before expenses was sufficient, only to have CRA later apply the net-income requirement.
The government eventually acknowledged that its own early gross-income guidance had been unclear and incorrect. It issued a remission order for certain otherwise eligible recipients who had relied on it, recognizing that collection would be unreasonable and unjust. A debt could be legally established, in other words, and still be wrong to collect because of what the government itself had told people.
And we have not yet considered what happened to the benefits after they were paid.
For many recipients of provincial social assistance, CERB or CRB reduced their welfare or disability benefits. Others paid higher rent in rent-geared-to-income housing. Some subsequently had federal tax refunds or credits applied against the pandemic debt.
The federal ledger can record the full amount of a benefit as owing without showing how much the person actually retained after another government reduced assistance or a housing provider increased rent. A province may have saved money when CERB was paid, while Ottawa now demands that the recipient return the same CERB. The person can end up carrying the consequences of transactions between governments that neither government has properly reconciled.
A new accounting high water mark?
Governments can recover or save money in different places, while the individual remains the debtor in the one account that makes the headline.
None of this means there was no fraud. There was. Nor does it mean every eligibility decision was wrong. Some recipients knowingly made false claims, some misunderstood the rules, and some failed genuine eligibility requirements. But the $10 billion figure does not tell us how much belongs in any of those categories. It does not distinguish a fraudulent application from a disputed honorarium, an unreachable former client, an unreasonable evidentiary decision or a benefit that had already reduced someone’s provincial assistance.
CRA’s administrative total has been asked to perform a feat it cannot perform: to tell us not merely what the agency recorded, but what actually happened.
The government’s own financial statements make the public presentation still more peculiar. At March 31, 2025, the Public Accounts recorded $12.96 billion in gross COVID-benefit overpayments. Against that, the government recorded a $10.49 billion allowance for doubtful accounts, leaving a net receivable of $2.47 billion. Those are figures for that date, not a recalculation of the more recent $10 billion headline. The allowance does not cancel the debts or prove that they were improperly established. It means the government assessed most of that gross balance as unlikely to be recovered. Public Services and Procurement Canada
So, Ottawa publicly emphasizes the gross debt, accounts for much of it as doubtful, and continues collecting from people whose eligibility may have been determined through methods that courts have found unreasonable. The size of the recorded debt then becomes a justification for continuing the collection campaign.
This is why Let It Be Over calls for an end to the prolonged pursuit of low-income pandemic-benefit recipients. But the argument is not simply that collection is hard on people who cannot repay. It is that the number being used to justify collection is being made to say more than it knows.
What government paid, what CRA subsequently declared ineligible, what remains recorded as owing, what people actually retained and what can reasonably be recovered are different amounts. The familiar headline collapses them into one enormous IOU.
We do not have the underlying data needed to calculate how much of the outstanding balance was wrongly established. That uncertainty is not a reason to accept CRA’s figure as a measure of genuine overpayment. It is a reason to stop pretending that the figure answers the question.
If Ottawa wants Canadians to believe that $10.3 billion was wrongly received and remains properly recoverable, it should demonstrate that proposition rather than simply announce the balance on its books.
Meanwhile, think again about the person who shovelled your driveway. You paid them, they cleared the snow, and neither of you thought to create a file for a federal eligibility review several years in the future. You would probably be astonished to discover that your failure to document the transaction could help turn their emergency benefit into a debt.
Postscript: What kind of country keeps a debt for 117 years?
Finally, there is a larger question behind the $10.3 billion. Why are we so determined to have such a large number in the first place?
The number does political work. Say that Canadians still “owe” $10.3 billion and the instinctive response is that government has a duty to get it back. The size of the debt becomes the justification for collection, even though the number itself contains disputed debts, doubtful debts and debts that may never be collectible.
Consider what “collection” can actually mean. Someone living in poverty owes $14,000. CRA determines that $10 a month is all they can afford. At $120 a year, repayment will take 117 years.
Of course it won’t. The person will die owing Canada money. At that point we are no longer seriously collecting a debt. We are maintaining one.
And here is the strange circularity. Uncollectible debts remain on the books. They help produce the enormous headline number. The enormous number then produces public support for continuing to collect the debts that made the number enormous.
Failure to collect becomes the justification for continuing to collect. That should trouble us beyond CERB.
What kind of country wants its government to behave this way? Canada usually imagines itself as pragmatic and moderate, with public administration directed toward useful ends. Yet we are prepared to maintain debts that can outlive the people who owe them because our machinery is much better at creating an account receivable than deciding when it has ceased to serve a public purpose.
Pursue deliberate fraud. Collect clearly established debts from people who can reasonably repay them. But a serious country should also know the difference between stewardship and ritual — between recovering public money and keeping a number alive on a ledger.
Perhaps that is the deepest problem with the $10.3 billion. We have allowed the number itself to become the argument.
CRA establishes the debts. CRA adds them together. Government announces the total. The total creates public alarm. And the alarm becomes the reason to keep collecting the debts that created the total.
That is a circle, not evidence. A $14,000 debt being repaid at $10 a month does not need a more determined collector. It needs 117 years.
No sensible public policy should require its debtor to live that long in order for the policy to succeed.