The federal government wrote off $4.5 billion in COVID-19 benefit debts in the 2025-26 fiscal year, a sharp increase from $26 million the previous year, according to the Office of the Auditor General of Canada.

The figures appear in audits of Ottawa’s consolidated financial statements, The Canadian Press reported in a story by Craig Lord published by Global News. The government released its annual public accounts on Friday, alongside Auditor General Karen Hogan’s commentary on the previous fiscal year.

Ottawa has been seeking repayment of pandemic benefits from people it determines were overpaid or ineligible. When the government no longer expects to recover a debt, it writes the amount off its books.

The auditor general also flagged growing expected losses on pandemic-era business loans.

The allowance for potential losses under the Canada Emergency Business Account, known as CEBA, increased to $5.6 billion from $5.4 billion a year earlier. Outstanding loans totalled $7.2 billion.

That allowance represents expected potential losses, rather than the benefit debts already written off.

Businesses could have nearly one-third of their interest-free CEBA loans forgiven by repaying the required amount before the applicable deadline, which Ottawa extended twice. Loans not repaid by that deadline began accruing interest, according to the report.

Sources