OTTAWA—The auditor generals office is narrowing its focus for a review of billions in federal spending meant to cushion the economic blow from COVID-19, MPs were told Tuesday.
Karen Hogan, the nominee to be Canadas next auditor general, said the focus of the COVID-19 audit will be on how prepared federal officials were for the pandemic, as well as key parts of the federal response, in order to provide the most value for Canadians and parliamentarians.
She said the potential for fraud in some emergency aid programs may expand the scope of audit work that the office is trying to manage, with limited budget resources and employees working from home.
The office has delayed multiple reviews of federal programs to look at the Liberals $187-billion infrastructure program and now $151.7 billion in pandemic-related aid, plus tens of billions more in loans and tax deferrals.
Hogan said other work might have to fall by the wayside if the auditor generals office cant get millions more in funding.
MPs on the public accounts committee have been told the current need is about $10.8 million. The office has an annual budget of about $90 million.
“We will do our best,” Hogan told MPs vetting her candidacy, “and I commit to getting information to Parliament as quickly as we can so that we can begin to see if there are any lessons learned or changes that we can make to better prepare ourselves and the government should we have to go through (a similar event) again.”
Meanwhile, there were new warnings about household debt, even though federal officials and the Bank of Canada have said the spending and credit help has put a financial floor under many Canadians to help them manage the crisis.
The head of the Canada Mortgage and Housing Corp. said Tuesday the aid has helped keep a lid on the amount of rent non-payment and mortgage deferrals.
However, CMHC president Evan Siddall also warned of the potential for arrears—a “deferral cliff,” he called it—if the economy hasnt improved enough when payments restart in the fall.
He told the Commons finance committee that CMHC expects household debt to top 200 percent of disposable income by next year, up from 176 percent at the end of 2019.
The federal housing agency also expects average home prices to drop between nine and 18 percent over the coming 12 months.
“The resulting combination of higher mortgage debt, declining house prices and increased unemployment is cause for concern for Canadas longer-term financial stability,” Siddall said in his opening remarks, adding the agency is reviewing underwriting policies in light of the pandemic to limit excessive borrowing.
He also promised more details next week on a commercial rent assistance program, with tips for businesses on how to convince leery landlords to apply.
Also on Tuesday, the Liberals promised to deliver details soon of an expansion of a small-business loan program, responding to weeks of criticism about its design.
The program provides interest-free loans of $40,000 for eligible small businesses to cover costs like rent and utilities, with the possibility of forgiving one-quarter of the amount if it is paid off by the end of 2022.
The program has lent $24 billion, but left out companies that didnt have traditional payrolls, such as family-run businesses that pay themselves in divRead More – Source