Export Development Canada (EDC) has initiated multiple criminal investigations into suspected loan fraud cases, according to Blacklock's Reporter. The federal bank has identified several borrowers whose loan applications have raised concerns about potential fraudulent activity. The findings have prompted a formal investigation into the integrity of the pandemic support initiative.“Referrals to the RCMP were made on August 4, 2022,” EDC managers wrote the Commons Public Accounts Committee with at least 17 cases of suspected fraud.In 2020, Parliament established the Canada Emergency Business Account (CEBA), a federal assistance program to support small businesses affected by pandemic-related lockdowns and travel restrictions. The program offered $60,000 interest-free loans to eligible businesses. Despite expressing concerns about insufficient resources and specialized knowledge to manage such an initiative, EDC was designated by the Cabinet to oversee the program's administration, according to official records.EDC told the Commons committee that early borrowers were not required to prove they were qualified before receiving taxpayers’ loans. “Applications were funded based on businesses attesting to meet the payroll criteria,” wrote the EDC.Subsequent audits revealed that 51,000 loan recipients failed to meet the program's eligibility requirements, a significant oversight in distributing these emergency funds.“Export Development Canada was instructed by the Department of Finance to deliver ineligibility notifications to this population starting in October 2022,” wrote the EDC.Auditors determined that $3.5 billion was disbursed to ineligible recipients. EDC characterized this finding as "an extrapolation" based on randomly selecting accounts.The loan program's daily operations were outsourced to Brazilian contractor Accenture PLC for $209 million in consulting fees. In a December 2 report, Auditor General Karen Hogan identified multiple irregularities, including Accenture charging rates up to $750 per hour and billing for 14-hour workdays that were not actually performed.The Auditor General's report revealed that a Brazilian call center handling Canadian borrower inquiries saw costs balloon from an initial $2.78 million budget to $23.2 million.In testimony before the Public Accounts Committee on December 2, Hogan placed ultimate responsibility for the program's mismanagement on the Department of Finance.“They really did fail,” she said.Despite inquiries from MPs, those responsible for overseeing the program within the finance department remain unidentified. EDC's committee report avoided naming specific individuals.“Accenture, Export Development Canada and the Department of Finance met frequently,” wrote management. Contacts with the finance department were unidentified as “officials from the financial sector policy branch up to the associate assistant deputy minister,” they said.Soren Halverson, who served as associate assistant deputy during the program and is now Assistant Commissioner at the Canada Revenue Agency, has not been called before MPs to address the program's mismanagement.During his testimony at the 2020 hearings of the Commons Finance Committee, Halverson proudly stated that strict management practices had effectively identified and excluded ineligible borrowers. “It would be below 10%,” he remarked.“Why were they rejected?” asked Halverson. “About half of them are getting rejected because of fraud. Others may have not met other parameters that are part of the application.”
