Liberal government says CRA gave 'unclear' instructions on eligibility requirements for CERB

The federal government acknowledged Friday night that it provided unclear instructions to self-employed Canadians on how to apply for the $2,000 monthly Canada emergency response benefit (CERB).

"The Government of Canada acknowledges that communications on this topic were unclear in the first days after the CERB was launched," said a statement from the Canada Revenue Agency (CRA). 

"This includes both the CERB webpages, and the information provided to call centre agents. We regret that this lack of consistent clarity led some self-employed individuals to mistakenly apply to the CERB despite being ineligible."

Earlier Friday, before the government statement was issued, Marc Brière, the national president of the Union of Taxation Employees, which represents CRA employees, told CBC News that his staff was given incorrect information about the benefit's eligibility. 

"At the beginning, when people were phoning, unfortunately there was a mistake made," Brière, said. "The agents were provided with their ... guidelines to answer questions and it referred to gross income. That's what some of them have told Canadians when they were calling."

Brière, whose comments were first reported by iPolitics, said the mistake was noticed a few weeks later, changes were made and new instructions were given to the agents answering calls. 

The CRA has sent out 441,000 letters warning people who received the CERB that they may not be eligible for the benefits they have so far received. The letters ask recipients who don't meet income requirements to pay back the money by Dec. 31 so it does not negatively affect their tax returns.

Described as "education letters" by a CRA spokesperson, the letters were sent to those for whom the agency said it was "unable to confirm ... employment and/or self-employment income of at least $5,000 in 2019, or in the 12 months prior to the date of their application" — one of the key criteria for the CERB program.

In the past several weeks, many Canadians have reported they received such letters and now fear they'll have to repay thousands of dollars in benefits.

Many of those affected have argued that the federal government never clearly defined how the $5,000 amount would be calculated. Some point to the CERB application, which asks if the person received "a minimum of $5,000 (before taxes) in the last 12 months, or in 2019 ...." but makes no explicit mention of expense deductions.

In emails to CBC News, the CRA said it has been clear about how it defines income.

"The CRA considers self-employment income as the net pre-tax income (gross income less expenses). This is consistent with how self-employment income is calculated when dealing with the CRA. To be clear, there has been no change to this position during the lifecycle of the CERB," a CRA spokesperson told CBC News earlier this month.

A CBC News search of archived internet pages shows that information was added sometime after April 21 — about two weeks after the program opened for applications.

'What they're doing — it's unjust'

Tammy Seed, a self-employed holistic nutrition instructor who works from home, says she was also given the wrong information. 

Seed said when the CERB was launched, she called the CRA on two different occasions and was told that she should use gross income to determine her eligibility. She also said she has continued to get incorrect information from the CRA since receiving her "education letter," including an officer who she said told her to ignore the letter sent to her by the CRA.

"I feel it's an unnecessary strain that they have put on countless families now," Seed told CBC News on Friday. "What they're doing is ... it's unjust"

Trudeau says 'don't worry'

Prime Minister Justin Trudeau has said repeatedly that Canadians who made "good faith" mistakes when applying for the CERB should not worry. He repeated that message in his year-end interview with the CBC's Rosemary Barton this week.

"We sent out those letters, but the message that I'm giving to Canadians is — if that letter is causing you anxiety, don't worry about it," he said.

"You don't have to repay during Christmas. You don't have to think about Jan. 1 as any deadline, and we're going to work over the coming weeks and months to make sure that there's a path forward that makes sense."

Seed said she does not find that message comforting. 

"The best comparison that I've been able to come up with is, it's like telling someone that they're very ill, to not worry about it," she said. "There's no reassurance in what he has said. He is simply saying don't worry about something that it's not acceptable to ask people to not worry about."

In the statement Lebouthillier's office released Friday evening, the federal government said that there would be no penalties or interest in cases where CERB needs to be paid back, but it stopped short of saying the payments would be forgiven.

"We recognize that, for some individuals, repaying the CERB could present a significant financial hardship. For this reason, we will give Canadians more time and flexibility to repay based on their ability to pay," the statement said.

"As the prime minister said yesterday, we will work with impacted individuals on a case-by-case basis, and we expect to be in a position to provide more details in the coming weeks."