Mother of 2 frustrated by mixed messages over CERB eligibility, clawbacks

When Ashleigh Buchanan had her hours cut and was eventually put out of work during the COVID-19 pandemic, she — like thousands of Canadians — turned to government programs to help her make ends meet.

But the London, Ont., mother of two said she's struggling again after the Canada Revenue Agency (CRA) held back her $12,000 tax refund this year, claiming she wasn't eligible for the pandemic benefits she received.

Buchanan's story isn't unique, as several Canadians have had their refunds garnisheed after being told their eligibility status had been revoked. 

But Buchanan said she's getting mixed messages from various government departments after asking for a second review of her eligibility.

"I'm just frustrated with having to call Canada Revenue and doing circle phone calls for days and literally not getting an answer," she said. "Or you get one answer, and then you call back a couple hours later and you get a total different answer."

$5K income threshold

Buchanan said she originally applied for employment insurance through Service Canada before being transferred to Canadian Emergency Response Benefit (CERB).

She received letters last month — which she has shown CBC — from the CRA and from Service Canada. The CRA letter, dated June 1, said she was ineligible for the CERB because she didn't earn at least $5,000 in the 12 months before the pandemic, which is the income threshold first established under the program.

But the letter from Service Canada, dated June 22, says she did meet the income threshold.

"Based on the information we have on file regarding your earnings, we confirm you have met the earnings eligibility requirement," the letter from Service Canada reads.

Buchanan said she's spent hours calling both the CRA and Service Canada trying to get some clarity, but is still without a concrete answer.

"I'm beyond frustrated," she said. "I shouldn't have to be calling every day and pleading with them."

Katrina Miller, executive director of Canadians for Tax Fairness, said issues like Buchanan's were bound to happen given the speed with which CERB was rolled out. But she said the government should take more responsibility in resolving those issues.

"Right now, the onus seems to be on the individuals to sort out the often confusing information they get from the government," Miller said.

Auditor general says $4.6B sent to ineligible individuals

Last year, Auditor General Karen Hogan found that roughly $4.6 billion in pandemic benefits had been sent to ineligible individuals. She also said that more than $15 billion in Canada Emergency Wage Subsidy (CEWS) payments should be further investigated to ensure they were sent to eligible businesses.

Bob Hamilton, the CRA commissioner, told a House committee in January that he disagreed with Hogan's assessment of the CEWS payments. He said it "wouldn't be worth the effort" to probe the $15 billion the auditor general flagged.

Miller said she's confused why the CRA is taking a "draconian" approach to individuals while seemingly ignoring large businesses.

"Having the government … choose to go after small individual taxpayers for $4.6 billion, which is a lot of money, but completely ignore potential ineligibility of CEWS for $15 billion, which is three times the amount — that doesn't make any sense," she said.

CBC reached out to both Employment Minister Carla Qualtrough, who is responsible for Service Canada, and Minister of National Revenue Diane Lebouthillier for comment. Both ministers' offices referred CBC to the CRA, and Lebouthillier's spokesperson said the Income Tax Act prevents her from commenting on specific cases.

A CRA spokesperson told CBC on Thursday that taxpayers can ask that their cases be reviewed by the CRA.

"We want to help impacted individuals resolve any issues and our agents will work with them on a case-by-case basis," the spokesperson said in an email.

The spokesperson also said the CRA is investigating CEWS recipients deemed "high-risk" but has found a high degree of compliance with the program's eligibility rules.

Francois Boileau, Canada's taxpayers' ombudsperson, told CBC he hasn't yet heard complaints from people like Buchanan who are getting mixed messages about their eligibility. He said Canadians can reach out to his office if they are having such issues, but urged them to try to resolve them with the departments first.

Boileau's office has been hit with dozens of complaints from Canadians who say the CRA took their tax return this spring even though they paid back their outstanding debts.

The office is facing a backlog and is currently trying to address complaints it received in early June. Still, Boileau encouraged Canadians to reach out if they're having issues.