Ottawa wrote off $4.5B in COVID benefit repayments last year: auditor general
OTTAWA — The Office of the Auditor General of Canada says the federal government wrote off billions of dollars last year in COVID-19 benefits that it no longer expects to see repaid.
The Auditor General of Canada revealed that Ottawa wrote off $4.5 billion in COVID-19 benefit repayments during the previous fiscal year, a significant increase from $26 million the year prior. This decision, made by the federal government when it expects not to be repaid, was detailed in the government's consolidated financial statements for the 2025-26 fiscal year, published on the same day as the 2026 federal budget.
Auditor General Karen Hogan also warned that a larger portion of business loans from the pandemic could remain unpaid, with the government's allowance for losses on these loans rising to $5.6 billion, up from $5.4 billion in the previous year. This is out of a total of $7.2 billion in outstanding loans. Hogan's audit also pointed out that the government has not yet fulfilled its commitment to clear the backlog of pay issues related to the former Phoenix pay system, with over 110,000 transactions awaiting processing over a year later.
The Department of National Defence's inventory management issues persist, with errors in asset tracking leading to a $751 million understatement of its deficit for the last fiscal year. Additional concerns included lack of risk management, board oversight, and overall performance measurement and reporting across various government operations.
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