Mr. Speaker, audit data on the Canada emergency wage subsidy, CEWS, program is highly sensitive information. Providing detailed information regarding the specific number of audits planned/conducted for a given compliance program could embolden some taxpayers to cut corners and take aggressive positions in the hopes that they will avoid detection.
With regard to parts (a)(i) and (ii),the total number of Canada emergency wage subsidy applications that have been approved is available on the CRA website on the “Claims to date: Canada Emergency Wage Subsidy” page at www.canada.ca/en/revenue-agency/services/subsidy/emergency-wage-subsidy/cews-statistics.html/. As of March 7, 2021, 10,670 initial CEWS applications were cancelled/disallowed, i.e., denied. Of that figure, 7,020 were cancelled whereas 3,650 were disallowed.
With regard to parts (b), (c) and (f), the CRA does not capture the number of corporate CEWS applicants that had a subsidiary or subsidiaries in foreign jurisdictions of concern in the manner in which the information is requested for this benefit program. The majority of taxpayers that are likely to have a subsidiary or subsidiaries in foreign jurisdictions of concern have not yet filed their current corporate income tax return and all related information returns covering the qualifying periods for which CEWS claims were made. As such, the CRA will be applying its risk assessment systems to these required tax filings, and will identify the highest risk taxpayers for its core compliance programs and for its CEWS post-payment audit program, which can include an examination of subsidiaries in foreign jurisdictions of concern, depending on the compliance risks identified.
As a general matter, the CRA does use the presence of subsidiaries in foreign jurisdictions of concern as a risk factor in selecting files for audit.
With regard to part (d), compliance activities are still ongoing. A notice of determination will be sent to the taxpayers when, as a result of a post-payment audit, it is determined that the taxpayers’ claims should be reduced or denied.
With regard to part (e), as noted above, compliance activities are ongoing and it is premature to report on this, however, the total amount that has been denied through claims either fully or partially disallowed is just over $800 million as of March 22, 2021.