Governments shouldn’t ‘scare’ Canadians, Liberal MP says as Ottawa threatens penalties for CERB fraud

The Liberal government is proposing legislation that would impose tighter rules for claiming the Canada emergency response benefit (CERB) and is threatening to impose fines and jail time on those who deliberately lie on applications.

The move prompted Toronto Liberal MP Adam Vaughan to argue publicly that governments should never “scare” people to achieve public policy goals.

The draft bill, which has been seen by CBC News and other media outlets, comes as the government faces pressure from the Conservatives on the one hand to weed out fraudulent claims and urge people to get back to work — and pressure from the NDP on the other hand to extend emergency aid and avoid going after Canadians who file ineligible claims.

In a bill to be tabled in the House of Commons Wednesday, the government says Canadians won’t be eligible to claim the benefit if:

The bill also lays out penalties for claimants whose applications include information that is “false or misleading,” and for those who “knowingly failed” to disclose sources of income or other relevant facts when they applied for the federal aid.

An offence could net a fine of up to $5,000, plus a penalty equal to double the amount of the income support claimed, or a fine plus a period of imprisonment up to six months, according to proposed legislation.

The bill says the government can rescind or reduce the penalty in response to new facts, and can issue a warning instead of a penalty.

Vaughan said the government shouldn’t be threatening penalties.

Responding to a tweet from a woman who said she had received a phone call warning of jail time related to CERB (which she isn’t collecting), he suggested the government is fuelling the “scam.”

“That phone call was a scam, but it only works because of the threatening words our government used. I do not and will not support jailing people for CERB … unless they sign up horses with fake SIN numbers and live in Oklahoma,” he said on Twitter.

Vaughan said there are already legal frameworks in place to crack down on those who try to deliberately defraud the system. 

Government sending the wrong message: Vaughan

“It’s not fraud to take a job and not know how to reconcile the account because there’s no mechanism for that yet,” he told CBC News. “And we don’t want to scare people into thinking that if they take a job they’re going to jail.

“That is not the message this government or any government should ever send, and it’s not legislation I would ever support.”

Vaughan said many Canadians are already coping with extraordinary anxiety due to the pandemic, and the government shouldn’t be giving them more to worry about.

“Any time a government uses a threat to accomplish a public policy goal, it needs to be rethought,” he said, adding that the government needs to show the same good faith as the millions of Canadians who have reached out for help during the pandemic.

“We need to help them walk back into this economy in a sensitive way and jail should not be hanging over their heads at any time during this process, because that’s just not fair and that’s not what our intent is and that’s not what we’re going to do,” he said. “So let’s be clear about that and not scare Canadians into being afraid of their government.”

Protecting integrity of program

Prime Minister Justin Trudeau said Tuesday the bill is meant to protect the integrity of the program. He said the government acted fast to get money out the door for desperate Canadians, and that anyone who received money in error because they weren’t clear on the rules will simply be asked to repay the money.

“We’re not looking to punish people who made honest mistakes,” he said.

But the government will crack down on the small minority of “deliberate fraudsters” who took advantage of the pandemic and collected benefits they knew they weren’t eligible for, Trudeau said.

Watch: Prime Minister Justin Trudeau on CERB cheats

Prime Minister Justin Trudeau spoke to reporters about proposed legislation that would fine or jail people who defraud the CERB program. 2:13

About eight million Canadians have received CERB, which offers people about $2,000 a month for up to 16 weeks.

NDP Leader Jagmeet Singh accused the government of “criminalizing” people who collected benefits in error, and suggested the penalties will harm the most vulnerable Canadians.

Watch: Jagmeet Singh says government CERB crackdown goes too far

NDP Leader Jagmeet Singh says the Liberals’ proposed legislation would criminalize people who wrongly received CERB and disproportionately impact more racialized Canadians. 1:25 

“The government has said, ‘It’s okay, try anyways, apply in good faith, you won’t get in trouble,'” he said. “Now they’re saying you’re going to get in trouble and that’s going to impact, without a doubt, racialized people more than anyone else.”

Singh also called for an extension of CERB for at least another four months for those who remain out of work as provinces begin gradually to reopen their economies. The NDPalso has pushed for a national program that would provide 10 days of sick leave.

The draft version of the bill proposes extending CERB past the July 4 expiry date for any two-week period up to Oct. 3.

The NDP does not see that as an acceptable alternative to a national sick leave program.

Federal Employment Minister Carla Qualtrough told Power & Politics host Vassy Kapelos that with both the CERB and the new pandemic benefit for students, the government’s aim is simply to get money back from ineligible applicants. 

“There’s not going to be penalties, and we’re not going to punish people if they did it in good faith,” she said on May 14. “But at the end of the day, there’s rigour at the end of the process and we will figure that all out.”

Conservative Leader Andrew Scheer has called on the government to crack down on fraudulent claims for benefits, and also has urged the government to revamp programs so that workers are encouraged to go back to work as soon as it’s safe to do so to help the economy recover.

Watch: Conservative MP Tim Uppal on the CERB and racialized Canadians

Conservative MP Tim Uppal spoke with reporters on Tuesday after NDP Leader Jagmeet Singh outlined his concerns about a proposed bill that would crack down on CERB fraud. 0:32

Conservative MP Tim Uppal said he was troubled by Singh’s suggestion that a crackdown on fraud would disproportionately affect minorities.

“That would suggest somehow that Mr. Singh believes that racialized Canadians have either committed more of the fraud, or maybe … are more unaware of the rules that go along with this program,” he said.