The Canada Revenue Agency paid millions in unrecoverable COVID wage subsidies to tax delinquents and insolvent companies, records show. Revenue Minister Diane Lebouthillier disclosed the figures in the House Commons..“How many companies that received the Canada Emergency Wage Subsidy have since gone bankrupt?” asked an Inquiry Of Ministry. The Agency replied that 750 insolvent firms received payments..According to Blacklock's Reporter, when asked, “What is the total amount of subsidy received by the companies?” The Agency said payments to the 750 insolvent firms totaled $145.9 million..Of the 750 bankrupts, almost half were tax delinquents before they successfully applied for taxpayers’ aid. The inquiry said 352 owed back taxes to the Canada Revenue Agency when they were sent the Canada Emergency Wage Subsidy payments..Lebouthillier defended the wage subsidy, which was one of the costliest pandemic relief programs at $100.7 billion. “The subsidy was a key measure to ensure workers were able to count on a source of income through the COVID-19 pandemic,” wrote Lebouthillier..When asked, “What are the names of the companies that owed back taxes?” Lebouthillier replied: As the protection of taxpayer information is of utmost importance the confidentiality provisions of the Acts administered by the Revenue Agency prevent the disclosure of taxpayer information.”.Parliament approved the wage subsidy in the first weeks of the pandemic on March 25, 2020. The original program paid a 10% subsidy to small businesses then expanded to a 75% grant to publicly-traded corporations including Canadian subsidiaries of foreign companies..Almost all applicants, 99%, received a subsidy, according to an April 5 Inquiry Of Ministry tabled in the House of Commons. Payouts averaged $226,162 per applicant..Finance Minister Chrystia Freeland repeatedly claimed the program saved millions of jobs. “It has played an essential role,” said Freeland..However, Statistics Canada said in a February 23 report that comparatively few small businesses, the largest employers in Canada, ever received subsidies. “The smallest businesses have the lowest usage rates,” said one report..“Less capital intensive businesses may have lower fixed costs than more capital intensive larger businesses,” wrote analysts. “Thus it may be better for the smallest businesses to close rather than to continue operating.”.Only 29% of small operators with fewer than five employees received subsidies under the program, said Statistics Canada A total of 13% of small businesses closed. By comparison, 61% of large corporations with more than 100 employees received subsidies and 2% of them closed.
