The small business loan program the federal government rolled out during the COVID-19 pandemic wasnB次元官网网址檛 managed with B次元官网网址渄ue regard for value for money,B次元官网网址� auditor general Karen Hogan said Monday.
The Canada Emergency Business Account program lent 898,000 small businesses $49.1 billion to help cover expenses such as rent and payroll during the pandemic.
Hogan said while Export Development Canada, which was responsible for the program, acted quickly to get the loans out, it relied on sole-source contracts and a single vendor without strong checks and balances.
HoganB次元官网网址檚 report says the Crown corporation gave that vendor, Accenture, B次元官网网址渢oo much control over key aspects of contracts, such as the scope of work and pricing, and failed to exercise basic controls in contract management, such as monitoring that amounts paid aligned with the work performed.B次元官网网址�
At the same time, it says the federal government didnB次元官网网址檛 provide effective oversight to ensure the program was cost-effective.
The report estimates $3.5 billion of the loans went to recipients that were ineligible.
Hogan told reporters she is B次元官网网址渃oncerned that EDC only partially agreed with our recommendation that it should carry out additional work to identify all ineligible recipients and recover the amounts involved.B次元官网网址�
In an emailed statement, Export Development Canada said it only partially agreed because in B次元官网网址減ractical terms, implementing (the recommendation) would be challenging and may also come at significant cost.B次元官网网址� Todd Winterhalt, its head of communications and public affairs, said in the statement it would explore potential options to recoup the money.
The auditor generalB次元官网网址檚 report outlined the example of a call centre that was set up to provide information about the loan program.
B次元官网网址淭he initial contract awarded for the call centre was expected to last four months and cost $2.78 million. However, as of March 31, 2024, the call centre was still operating with a cumulative total cost of approximately $23.2 million,B次元官网网址� the report outlines.
The costs per call, meanwhile, increased to $589 per call in the spring of 2023, up from $31 on average in 2020. Because Expert Development Canada didnB次元官网网址檛 require timesheets, it didnB次元官网网址檛 realize that the number of calls had dropped in 2022 and agents were answering six calls a day, while it B次元官网网址渃ontinued to pay for full-time work.B次元官网网址�
Winterhalt said the organization was asked to B次元官网网址渄esign, develop and launch the program within two weeks.B次元官网网址�
He said the organization is B次元官网网址渧ery proud of what we were able to accomplish on behalf of the Government of Canada for Canadian small businesses. This was a net-new program with no precedent or instruction manual to follow.B次元官网网址�
The report found that as of March of this year, $8.5 billion of the loans hadnB次元官网网址檛 yet been repaid.
Hogan noted in the press conference that the program is ongoing. B次元官网网址淧ayments B次元官网网址� will be ongoing for several years while action on defaulted loans is just beginning,B次元官网网址� she said.
B次元官网网址淰alue for money will be further compromised without better monitoring and improved plans to recover defaulted loans.B次元官网网址�
