ottawa –
The small business loan program rolled out by the federal government during the coronavirus pandemic was not administered with “adequate consideration of value for money,” Comptroller General Karen Hogan said Monday.
The Canada Emergency Business Accounts Program has loaned $49.1 billion to 898,000 small businesses to cover expenses such as rent and payroll during the pandemic.
Horgan said Export Development Canada, which is responsible for the program, acted quickly to disburse the loan but relied on single-source contracts and a single vendor without strong checks and balances.
According to Hogan’s report, the Crown corporation gave its vendor, Accenture, “too much control over important aspects of the contract, such as scope of work and pricing, and over whether payments were in line with the contract.” “They failed to perform basic contract management, such as monitoring.” work done. ”
At the same time, it said the federal government did not provide effective oversight to ensure the program was cost-effective.
The report estimates that $3.5 billion of the loans went to ineligible recipients.
“We only partially agree with our recommendation that EDC conduct additional work to identify all ineligible recipients and recover the amounts involved,” Hogan told reporters. I’m concerned about that,” he said.
In an emailed statement, Export Development Canada said it could only partially agree because “practically speaking, (the recommendations) would be difficult to implement and could be costly.” Todd Winterhardt, the company’s director of communications and public relations, said in a statement that the company will consider potential options to recover the funds.
The Auditor General’s report outlined examples of call centers set up to provide information about loan programs.
“The original contract signed for the call center was expected to last four months and cost $2.78 million. However, as of March 31, 2024, the call center was still operational and the cumulative total cost was approximately $23.2 million,” the report outlines.
Meanwhile, the cost per call increased from an average of $31 in 2020 to $589 in spring 2023. Expert Development Canada didn’t need timesheets, so it didn’t notice a drop in call volume in 2022. And the agent was answering six calls a day while “continuing to pay his full-time job.”
Winterhardt said the organization was asked to “design, develop and launch a program within two weeks.”
He said the organization is “very proud of what we were able to accomplish on behalf of the Government of Canada for Canada’s small and medium-sized businesses. This was an entirely new program with no precedent and no instruction manual to follow.” ” he said.
According to the report, as of March this year, $8.5 billion of the loans were still unpaid.
Hogan said in a press conference that the program is ongoing. “Payments will continue…for several years, but the response to default has only just begun,” she said.
“Without increased oversight and improved plans to recover defaulted debts, value for money will be further undermined.”
This report by The Canadian Press was first published Dec. 2, 2024.