COVID-19 loans to businesses rolled out quickly but value for money compromised by poor program management and oversight failure

Ottawa, 2 December 2024—A report from Auditor General Karen Hogan tabled today in the House of Commons concludes that while the Canada Emergency Business Account (CEBA) program worked to quickly provide Canadian small businesses with loans during the COVID‑19 pandemic, overall, the program was not managed with due regard for value for money.

Export Development Canada (EDC), as the Crown corporation responsible for delivering the CEBA program, acted quickly to disburse $49.1 billion in loans to approximately 898,000 small businesses across Canada. The loans were to cover unavoidable expenses during the COVID‑19 pandemic, such as payroll, rent, and insurance. The audit found that 91% of loans went to eligible businesses.

As of 31 March 2024, 83% of the loan amounts originally disbursed were repaid with partial forgiveness. This leaves some $8.5 billion to be repaid. The audit also found that EDC’s plan to collect defaulted loans lacked key elements, while the Canada Revenue Agency, which is supporting EDC in collection efforts, had a more detailed plan but was missing
targeted timelines.

Furthermore, the audit found significant weaknesses in EDC’s contract management. The corporation relied on a single vendor—Accenture—to deliver the program, using a series of non‑competitive contracts representing 92% of the $342‑million value of contracts awarded for this program. EDC gave too much control to the vendor 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. As a result, value for money
was compromised.

The audit also found that the Department of Finance Canada and Global Affairs Canada did not effectively oversee the CEBA program. As a result of unclear roles and responsibilities, neither department took accountability for the program, leaving many basic program elements, such as lifecycle planning, either delayed or incomplete. Also, the Department of Finance Canada did not set a limit on EDC’s administrative spending, which
went unchallenged.

“Unlike other COVID‑19 programs, CEBA is a loan program with repayments that will be ongoing for several years while action on defaulted loans is just beginning,” said Ms. Hogan. “Value for money will be further compromised without better monitoring and improved plans to recover defaulted loans.”