Ottawa Writes Off $4.5B in COVID-19 Benefit Debt
The federal government wrote off the debt after determining some recipients were overpaid or ineligible, and expects more pandemic business loans to go unpaid.
Updated on Nov. 9, 2026 in Debt Relief
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The federal government wrote off $4.5 billion in COVID-19 benefit repayments last fiscal year, up from $26 million the previous year. Ottawa also expects a larger portion of pandemic business loans will not be repaid.
Why it matters
Write-offs signal that a significant share of pandemic-era support will not be recovered from recipients. The rising allowance for potential losses on Canada Emergency Business Account loans points to ongoing costs for taxpayers.
Audited statements show $4.5 billion in COVID-19 benefit debt was written off, up from $26 million the year before. The allowance for potential losses on $7.2 billion in outstanding Canada Emergency Business Account loans rose to $5.6 billion.
The players
Government of Canada
The federal government administers the COVID-19 benefit programs and the Canada Emergency Business Account loans, and it is responsible for recovering or writing off the debt.
The details
When Ottawa determines someone was overpaid or ineligible for a COVID-19 benefit, it attempts to recoup the money, and it writes off debt it does not expect to recover. The government is working to recover payments made to Canadians during the pandemic, while the audits show the scale of amounts it now considers unlikely to be repaid.
Timeline
Last fiscal year: Ottawa wrote off $4.5 billion in COVID-19 benefit repayments.
Macro View
The rising allowance for potential losses on CEBA loans shows the program's pandemic-era debt is now being measured as a likely cost rather than a repayable asset. This marks a shift from expecting repayment to accounting for losses on the Canada Emergency Business Account loans.
Canadians who received COVID-19 benefits they were later found ineligible for may face recovery efforts, while the write-offs show the government is not expecting to collect every dollar. Businesses that took Canada Emergency Business Account loans should check their repayment status with the government.
The takeaway
Pandemic-era support is being partly written off, so anyone with outstanding benefit or loan obligations should confirm their status and repayment terms. Keep records of any government correspondence about overpayments or loan balances.
Further reading
For more on how debt is forgiven or written off, see Debt Relief coverage.
Source note: This article includes information reported by North Shore News.
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