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William Don Falconer of Vancouver did not claim Canada Emergency Response Benefit payments for which he wasn’t eligible. Nor did he make the easy mistake of applying for the financial aid twice, as many Canadians unwittingly did amid the confusion that surrounded the rollout of the pandemic benefit in the spring of 2020.

And yet, Mr. Falconer recently discovered he owes $2,000 in benefit overpayments.

He is among 1.7-million CERB recipients who are being told they may have to pay money back nearly two years after they received the benefit, all because of an extra payment from Ottawa.

The issue dates back to the early days of the CERB, when Ottawa distributed a $2,000 “advance” payment to many who applied for the benefit through Service Canada before June 14, 2020. The funds, which were in addition to the regular benefit of $500 a week, represented a four-week advance of future payments and were an effort to get money into people’s pockets as quickly as possible, the government said at the time.

To puzzled applicants like Mr. Falconer, who wondered why they were receiving more cash than expected, Ottawa said not to worry. The advance would be applied against a future claim period, ESDC, which operates Service Canada, said back then.

As promised, many Canadians who’d received the advance saw their CERB payments interrupted later on their claim. But for those who were not entitled or did not collect payments for a period of at least 20 weeks, some or all of the advance is now an outstanding balance owing, according to ESDC.

Mr. Falconer, who collected only six weeks of CERB before going back to what was then his job as a hotel manager, is among the Canadians for whom Ottawa did not reconcile the advance payment.

“I don’t think that it’s wrong for the government to be asking for this money back,” he said. “It was great that they tried to get as much money into the hands of Canadians as they could in a very uncertain time for a lot of people.”

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Over all, the Ottawa paid out $81.6-billion in CERB and employment insurance to 8.9 million recipients between March 15 and Oct. 3, 2020.

Mr. Falconer said he always wondered whether he’d have to give the money back. But the news that he did still came as a surprise after he was able to file his 2020 taxes last year without issue, he added.

ESDC said Service Canada began notifying Canadians who still have a balance owing from the advance payment in November, 2021. However, Mr. Falconer said he has yet to be formally notified.

Instead, he said he found out about the issue when he recently logged into his online CRA account to file his 2021 return. It was then that he noticed he had a $2,000 balance under employment insurance. The Canada Revenue Agency collects EI overpayments on behalf of ESDC.

Even after calling both Service Canada and the CRA, Mr. Falconer said he couldn’t get a clear answer on whether he will also have to refile his 2020 return since he paid tax on the advance CERB payment.

The government says it will not charge penalties or interest on the CERB overpayment and will work with taxpayers to establish flexible repayment schedules if necessary.

Mr. Falconer said he was offered a 10-month repayment plan, although he added he doesn’t need it.

“It worked out well for me because at the time I really needed $2,000,” he said. Now, he says, returning that sum is “not going to be the end of the world.”

But Mr. Falconer worries about low-income Canadians who might struggle to pay back the money.

ESDC said Canadians “will not be put into financial hardship by having to repay emergency benefits they received.”

A government backgrounder on the CERB overpayments says communication from Service Canada will also outline Canadians’ appeal rights.

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