CRA sent 441,000 'education letters' to Canadians who may have to repay CERB benefits

The Canada Revenue Agency says it has sent out 441,000 letters warning individuals that theymay not beeligible for the Canada Emergency Response Benefits they received.

Described as "education letters" by a CRA spokesperson, the letters were sent to those for whom the agency said it was "unable to confirm ... employment and/or self-employment income of at least $5,000 in 2019, or in the 12 months prior to the date of their application" one of the key criteria for theCERB program.

In the past severalweeks, many Canadians have reported they received such letters and now fear they'll have to repay thousands of dollarsin benefits.

The new figure provided byCRA suggestshow broad theproblem might be.According to federal figures, 8.9 million Canadians applied for CERB. That means nearly 5 per cent of applicants have receivedletters saying they may not be eligibleand could be forced to repay benefits.

Many of those affected have argued that the federal governmentnever clearly definedhow the $5,000 amount would be calculated.Some point to the CERB application, which asks if the person received "a minimum of $5,000 (before taxes) in the last 12 months, or in 2019 " but makes no explicit mention of expense deductions.

In emails to CBC News, the CRA says it has been clear about how it defines income.

"The CRA considers self-employment income as the net pre-tax income (gross income less expenses). This is consistent with how self-employment income is calculated when dealing with the CRA. To be clear, there has been no change to this position during the lifecycle of the CERB," a CRA spokesperson toldCBC News earlier this month.

The CRA also said the employment incomerequirement has been publicized on Canada.ca "since the beginning" ona Q&Apage for self-employed and independent workers.

However, a CBC News search of archived internet pages shows that information was added sometime after April 21 about two weeksafter the program opened for applications.

WATCH: Repaying CERB benefits

What you need to know about repaying CERB

4 years ago

Duration 6:54

Some Canadians are getting letters from the Canada Revenue Agency, suggesting they could have to repay thousands of dollars in CERB money because they may not have been eligible to receive it in the first place.

The CRA says that not everyone who receives a letter will be required to repay their CERB benefits. Recipients are encouraged to complete their 2020 tax returns to help the CRA correctly identifythebenefits and credits to whichthey are entitled.

The letter says that those who do owe CERB money are encouraged to repay by Dec. 31. A CRA spokesperson said this is for tax filing purposes, not a repayment deadline.

A promise of 'flexibility'

"If you are unable to immediately repay the amount," readsa sample of the warningletter provided to CBC News, "we can make an arrangement to give you more time and flexibility based on your ability to pay."

In fact, the CRA has suspended collectionactivityon new debt during the pandemic. The agency hassaid it willresume collecting on debts, including CERB payments, "when it is responsible to do so."

Some of those who receivedletters from the CRA say they spent their CERBbenefitson basic needs such as groceries and rent. They say theyfear they would not be able torepay the money if asked.

Asked about the situation in question period last week,Prime Minister Justin Trudeausuggestedthe government had been clear from the beginning about the pandemicsupports it has offeredCanadians.

"The rules did not change, but we indicated to Canadians that we will work with them if people made good-faith mistakes," he told the House of Commons.

CRA's most recent runofwarningletters is in addition to the 213,000 letters the agencysent out in November. Those letters wereaddressed to Canadians who applied for CERB through both Service Canada and the CRA, and warnedthemthat repayment may be required.

The CRA says it's possiblethat some Canadians received both letters.