The federal government deposited nearly $ 26 million in bad bank accounts in the past fiscal year – and more than $ 10 million could be lost for good.
According to figures tabled in the House of Commons, the government made 22,170 direct deposits into bad bank accounts between April 1, 2020 and March 31, 2021. In the previous fiscal year, it deposited 9,619 payments of a total value of $ 6.6 million in the wrong accounts.
The number of cases reported in fiscal year 2020-2021 is the highest since at least 2012. The total amount paid into bad accounts – $ 25.9 million – is much higher than the figure reported for the previous year and is the second largest annual amount. misdirected money reported since at least 2009.
While the government was able to recover $ 7.1 million in misdirected payments last year, another $ 10.2 million lost is listed in government documents as “should not be recovered.” The government says it hopes to hunt and recover an additional $ 8.6 million in the years to come.
The largest single payment misdirected last year – for $ 3.5 million – was clawed back by the federal government.
With billions of dollars in federal direct deposit payments of all types made each year, a small percentage of them inevitably end up in the wrong place.
But for those waiting for money from Ottawa, misdirected payments can cause headaches and hardship.
Conservative Treasury Board spokesperson Kelly McCauley said his office received numerous calls from constituents whose benefit payments never arrived and who were unable to contact the Revenue Agency. Canada (CRA), which oversees many pandemic benefit programs.
âThe difficulty has been trying to reach the CRA for months and months,â said McCauley, MP for Edmonton West.
The government says the rise in the number of misplaced payments is due to the sharp increase in the number of payments made to Canadian individuals due to the pandemic.
“There has been a significant increase in payments issued from April 1, 2020 to March 31, 2021 to individuals and businesses due to measures taken by the government to support the difficulties created by the COVID-19 pandemic,” wrote StÃ©fanie Hamel , spokesperson for Public Services and Procurement Canada (PSPC). The ministry includes the office of the Receiver General, which oversees government payments.
âFrom 2020 to 2021, the Receiver General issued 405 million direct deposits worth $ 494 billion,â Hamel continued. “This represents an annual increase of 35 percent and 56 percent respectively.”
Hamel said misdirected deposits only accounted for 0.0053% of the total paid.
In a backgrounder prepared for an appearance before the committee in March 2020, PSPC said the percentage of direct deposit money that was misdirected was 0.002% of the total in 2018-19 and 0.003% in 2017. -2018.
Hamel said government payments can end up in bad accounts for a number of reasons.
“Some reasons for misdirected deposits can include manual errors, wrong information received from the recipient (i.e. recipient provides incorrect banking information), wrong information received from the department and potentially fraud,” he said. she wrote.
Hamel said the department has “rigorous processes” in place to recover money deposited in bad accounts and is making a “sustained effort … within the parameters of the law” to recover the money.
The process for issuing a replacement payment for misplaced deposits can vary from department to department, but often requires that the person whose payment was deposited in the wrong account sign an affidavit in front of a witness for certify that she has not received payment, said PSPC spokesperson MichÃ¨le LaRose. Once the government receives the affidavit form, it can issue a replacement payment.
“In cases where the department responsible for the payment considers that waiting for this process to complete would create undue hardship for the intended recipient (as in the case of some socio-economic payments), the department may issue the second payment without the form. filled, âadded LaRose. âIn these cases, departments have processes in place to recover funds in the event of an overpayment, as these payments tend to be recurring. “
McCauley said that while he understands that more payments mean more chances of making mistakes, that amount of money suggests a bigger problem.
“I think it comes down to the problems we’ve seen where the government opens the doors without oversight or protection for taxpayers on how this money is spent,” he said.
McCauley said the Auditor General has pointed out that it is costing the government a lot to recover money that was accidentally paid out.
He said he understood the need to get things done quickly in March and April 2020, but the problems continued thereafter.
“In October, the CRA (Canada Revenue Agency) told us it still hasn’t put in place better safeguards to protect Canadians – either taxpayers from fraud or taxpayers from taking in charge of their accounts or requesting money (for) on their behalf, “he said. noted.
“It just shows a lack of competence of this government or a lack of attention on the part of the government. They are more interested in making these announcements about having your back rather than doing it right.”
NDP revenue critic Niki Ashton said Prime Minister Justin Trudeau’s government “is betraying Canadians.”
âCanadians rely on these benefits to survive,â she wrote in a statement. “The cost of living is on the rise … The Liberals’ approach to taxation is to let billionaires get away with it while working people pay the price.”