A report tabled today in the House of Commons by Auditor General Karen Hogan highlights significant management shortcomings in the Canada Emergency Business Account (CEBA) program, despite its success in providing rapid financial relief to small businesses during the COVID-19 pandemic.
The CEBA program, administered by Export Development Canada (EDC), disbursed $49.1 billion in loans to approximately 898,000 small businesses to cover essential expenses such as payroll, rent, and insurance during the economic downturn. While 91% of the loans reached eligible businesses, the audit revealed critical gaps in contract management, oversight, and loan recovery efforts.
As of March 31, 2024, 83% of loans had been repaid, but $8.5 billion remains outstanding. The audit identified inadequate planning by EDC for collecting defaulted loans, compounded by the Canada Revenue Agency’s lack of clear timelines for its collection strategy.
The report further criticized EDC for awarding 92% of the program’s $342 million in administrative costs to Accenture through non-competitive contracts. Auditor General Hogan pointed to weak oversight and excessive reliance on the vendor, noting that basic accountability measures, such as aligning payments with the work performed, were not enforced.
Additionally, insufficient coordination between the Department of Finance Canada and Global Affairs Canada delayed key program management tasks, including lifecycle planning. The Department of Finance also failed to cap administrative spending, leading to unchecked expenses.
“Value for money was compromised,” Hogan stated, warning that continued shortcomings in loan recovery and oversight could further undermine the program’s effectiveness.
The Auditor General’s report underscores the need for immediate corrective actions to protect taxpayer dollars and ensure effective management of the ongoing phases of the CEBA program.
The full findings and recommendations are outlined in the 2024 Reports of the Auditor General of Canada, now accessible on the Auditor General’s website.
