Ottawa wrote off $4.5 billion in COVID benefit debts last fiscal year, audit shows

Audited public accounts for 2025-26 show Ottawa wrote off $4.5 billion in COVID-19 benefit overpayments it no longer expects to recover, up from $26 million a year earlier. Auditor General Karen Hogan's office said expected losses on Canada Emergency Business Account loans rose to $5.6 billion of $7.2 billion outstanding; all CEBA loans fall due at the end of December. The audit found more than 110,000 Phoenix pay transactions still waiting over a year on March 31, 2026, and said National Defence inventory errors understated the department's deficit by $751 million. Ottawa keeps pursuing overpayments it still expects to recover.