Thank you, Mr. Chair.
I am pleased to be here today to discuss my report on the Canada Emergency Business Account program, or CEBA, which was tabled in the House of Commons on Monday.
I would like to begin by acknowledging that we are on the traditional unceded territory of the Algonquin Anishinabe people.
I am accompanied today by Andrew Hayes, Deputy Auditor General, and Mélanie Cabana, the principal who was responsible for this audit.
The Canada Emergency Business Account program was put in place during the COVID‑19 pandemic to help small Canadian businesses cover expenses they could not defer.
We found that Export Development Canada, EDC, acted quickly to provide $49.1 billion in loans to help almost 900,000 small businesses across Canada. However, the program was not managed with due regard for value for money.
We found significant weaknesses in EDC’s contract management. It relied on a single vendor, Accenture, to deliver the program. The non-competitive contracts awarded to Accenture represented 92% of the total value of $342 million in contracts related to the CEBA program.
EDC gave too much control to Accenture over key aspects of contracts, such as the scope of work and pricing. EDC failed to exercise basic controls in contract management, such as monitoring whether amounts paid aligned with the work performed. Since ongoing program delivery uses Accenture’s proprietary IT systems, EDC will have to rely on these non‑competitive contracts until at least 2028.
We also found that neither the Department of Finance nor Global Affairs Canada provided effective oversight of value for money. There was an accountability void that resulted in basic program elements, including measuring outcomes, being delayed or not completed. Finance Canada did not challenge EDC's administrative spending, or provide an overall spending limit. As of March 31, 2024, that spending totalled $853 million.
While 91% of loans were issued to eligible businesses, we estimated that about $3.5 billion went to ineligible recipients. I am concerned 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.
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. Value for money will be further compromised without better monitoring and improved plans to recover defaulted loans.
This concludes my opening statement.
We would be pleased to answer any questions the committee may have.