A COVID-19 loan program meant to help businesses through the pandemic paid over $2 billion to ineligible firms, according to new data. The data does not include the borrowers rejected because of suspicion of fraud.. Young workers .Improper payments were disclosed in an Inquiry Of Ministry tabled in the Commons at the request of Conservative MP Brad Vis (Mission-Matsqui, BC), who asked “What is the dollar amount of Canada Emergency Business Account funds that were initially provided to businesses that were later deemed ineligible?”.Parliament in 2020 funded the program to aid small businesses affected by pandemic lockdown orders. Initial offers of $40,000 interest-free loans were later expanded to $60,000 with a third forgiven, a maximum of $20,000, on final repayment..Total costs were $49.2 billion, by an official estimate..The program went through private banks and credit unions, with Export Development Canada managing the program..The Inquiry was told that $2,047,682,710 of loans went to ineligible firms..According to Blacklock’s Reporter, the reasons for ineligibility included “data quality issues,” suspicious business registration numbers, multiple loan applications by the same firms, and “failure to respond to an audit request.” .About 50,500 borrowers were found to be ineligible, wrote staff..According to a Canada Revenue Agency Inquiry of Ministry, loans to failed firms were $1.05 billion, with 2,640 companies considered insolvent..The insolvency figures were tabled at the request of Conservative MP Kelly McCauley (Edmonton West, AB), who asked “How many organizations that received funding are in receivership or insolvent, and how much funding did the organizations receive?”.The total losses in the program will not be known until 2024, as the loan repayment deadline has been extended to Dec. 31, 2023..“In general, loan recipients tended to be young businesses,” the department of Industry wrote in a January 5 report SME Profile: Recipients Of The Canada Emergency Business Account..“Around 41% of them had been in operation for no more than 10 years. Most of these, 53%, were micro-sized, having no more than four employees.”. Oil Workers .Most borrowers were affected by pandemic lockdowns, said the SME Profile. About a fifth of borrowers, 18%, had already run lines of credit, applied for second mortgages, and used credit cards to stay afloat..Findings were based on a federal survey of 19,283 businesses nationwide..At a 2020 Commons Finance committee hearing, the department of Finance said less than 10% of applicants were rejected..“It would be below 10%,” testified Soren Halverson, then-associate assistant deputy finance minister, at a hearing on April 16, 2020..“Why were they rejected?” said Halverson..“About half of them are getting rejected because of fraud. Others may have not met other parameters that are part of the application.”
A COVID-19 loan program meant to help businesses through the pandemic paid over $2 billion to ineligible firms, according to new data. The data does not include the borrowers rejected because of suspicion of fraud.. Young workers .Improper payments were disclosed in an Inquiry Of Ministry tabled in the Commons at the request of Conservative MP Brad Vis (Mission-Matsqui, BC), who asked “What is the dollar amount of Canada Emergency Business Account funds that were initially provided to businesses that were later deemed ineligible?”.Parliament in 2020 funded the program to aid small businesses affected by pandemic lockdown orders. Initial offers of $40,000 interest-free loans were later expanded to $60,000 with a third forgiven, a maximum of $20,000, on final repayment..Total costs were $49.2 billion, by an official estimate..The program went through private banks and credit unions, with Export Development Canada managing the program..The Inquiry was told that $2,047,682,710 of loans went to ineligible firms..According to Blacklock’s Reporter, the reasons for ineligibility included “data quality issues,” suspicious business registration numbers, multiple loan applications by the same firms, and “failure to respond to an audit request.” .About 50,500 borrowers were found to be ineligible, wrote staff..According to a Canada Revenue Agency Inquiry of Ministry, loans to failed firms were $1.05 billion, with 2,640 companies considered insolvent..The insolvency figures were tabled at the request of Conservative MP Kelly McCauley (Edmonton West, AB), who asked “How many organizations that received funding are in receivership or insolvent, and how much funding did the organizations receive?”.The total losses in the program will not be known until 2024, as the loan repayment deadline has been extended to Dec. 31, 2023..“In general, loan recipients tended to be young businesses,” the department of Industry wrote in a January 5 report SME Profile: Recipients Of The Canada Emergency Business Account..“Around 41% of them had been in operation for no more than 10 years. Most of these, 53%, were micro-sized, having no more than four employees.”. Oil Workers .Most borrowers were affected by pandemic lockdowns, said the SME Profile. About a fifth of borrowers, 18%, had already run lines of credit, applied for second mortgages, and used credit cards to stay afloat..Findings were based on a federal survey of 19,283 businesses nationwide..At a 2020 Commons Finance committee hearing, the department of Finance said less than 10% of applicants were rejected..“It would be below 10%,” testified Soren Halverson, then-associate assistant deputy finance minister, at a hearing on April 16, 2020..“Why were they rejected?” said Halverson..“About half of them are getting rejected because of fraud. Others may have not met other parameters that are part of the application.”
