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The federal government was not prepared for a major pandemic but did act quickly to approve billions of dollars in support payments for workers and businesses, according to a wide-ranging Auditor-General’s report into Ottawa’s response to COVID-19.

Auditor-General Karen Hogan’s report includes a close look at how Ottawa awarded $97.6-billion under the Canada Emergency Wage Subsidy (CEWS) and $83-billion to workers through the Canada Emergency Response Benefit (CERB). It found that well more could have been done to ensure the payments only went to those who genuinely needed the support, but it generally supported the government’s view that the benefit of fast action was worth the risk.

“They prioritized the speed of getting support to individuals and businesses and then made adjustments in real time based on some issues that arose,” Ms. Hogan told reporters Thursday. “They were able to add some controls and they were able to adjust the program to expand some inclusions.”

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Misuse of pandemic early warning system, inaccurate risk assessments hurt Canada’s response to COVID-19, Auditor General says

The report said this focus on speed means the government will need to review those transactions and recover any payments that didn’t fit the rules of the programs.

Thursday’s report includes chapters on CEWS, CERB and the Public Health Agency of Canada. In addition to the three pandemic-related chapters, the Auditor-General also reported on an audit of the federal government’s $188-billion Investing in Canada infrastructure plan. The audit had been requested in January, 2020, through a Conservative Party motion that opposition parties approved over the objection of Liberal MPs.

The report criticizes the government for failing to produce clear information for the public as to how the money is being spent. It also found that the spending is behind schedule.

“We also found that no one was tracking the effect of funds being moved into the future for the plan as a whole, in part because of gaps in information about the progress of projects,” the report states.

On CERB, which went directly to workers who lost nearly all of their income because of COVID-19, and CEWS, which went to affected employers to cover most of their staffing costs, the report praised the fact that the payments were rolled out in record time.

The audit report states that the legislation approving CEWS did not allow officials to deny applications from employers with a history of non-compliance when it comes to tax obligations. Auditors said this created a risk that the program “may have subsidized applicants that were operating non-viable organizations.”

Auditors also said the Canada Revenue Agency “missed an important opportunity” to approve targeted audits of CEWS payments during the summer and fall of 2020, meaning the agency will now have to rely on more costly comprehensive audits in 2021.

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In response to the report on the CERB, the CRA and Employment and Social Development Canada said they would complete their compliance work by 2023 and 2024 respectively.

Employment Minister Carla Qualtrough told reporters Thursday that most of the audits will be done well before 2024 but that a multiyear plan was needed to give the federal government the runway to investigate fraud and other inappropriate applications.

“Some of them will be very complex, in terms of, particularly, the more sophisticated fraud,” Ms. Qualtrough said. The goal she said is to “assure Canadians that we’re doing the due diligence we promised we would do after the fact.”

Despite Canada’s experience with SARS almost 20 years ago, the Auditor-General found that the federal government was not ready for a pandemic of COVID-19′s magnitude.

An audit of the Public Health Agency of Canada (PHAC) found the agency had not dealt with “long-standing gaps in its information sharing,” which was critical to a national health response. It noted that the agency gave COVID-19 a low-risk ranking for two months and only moved it to high risk a week after Italy entered a countrywide lockdown and days after the World Health Organization declared a pandemic.

The Auditor-General found a “lack of complete and timely surveillance data” made it difficult for PHAC to fulfill its mandate to detect and contain the virus early. It noted the gap persisted in 2020, despite the issue being flagged by previous auditors-general in 1999, 2002 and 2008.

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“The government should not need a crisis to understand the importance of acting promptly to keep its house in order,” Ms. Hogan said.

Her report found that PHAC missed its own timelines to review and update emergency management and emergency response plans and that it did not adequately test its plans before the pandemic.

“We will never be able to tell Canadians what would have happened if the preparedness issues had been better addressed before the pandemic hit and if all the plans had been updated and tested as they needed to be,” she said.

Thursday’s report is far from the final word on Canada’s COVID-19 response. Ms. Hogan notes that her team came across “significant shortcomings” with the Temporary Foreign Worker Program and flagged these to the government in February. She said her office found the federal government didn’t follow inspection protocols and so couldn’t show whether workers were properly quarantined.

She defended not releasing the full findings immediately, saying they were raised with the government and her office will monitor the 2021 growing season for changes before releasing its report.

Similarly, the office has delayed issuing findings on Ottawa’s approach to securing COVID-19 vaccines after the main departments involved asked for more time to work with the auditors. Ms. Hogan said her office has reached out to her provincial counterparts to consider a co-ordinated assessment of Canada’s vaccine rollout. A report on the country’s ill-equipped National Emergency Strategic Stockpile is also pending.

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Editor’s note: The CRA and Employment and Social Development Canada said they would complete their compliance work by 2023 and 2024 respectively in response to the report on the CERB and not CEWS. The story above has been updated to properly reflect this information.

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