The CRA is asking more than a million Canadians to pay back their CERB. We spoke to three to find out why that’s tough

As Canadians receive notices stating they were ineligible for some or all of the Canada Emergency Response Benefits they received at the beginning of the pandemic, advocates and CERB recipients are wondering why the federal government has chosen the middle of an affordability crisis to claw back assistance.

Caught between skyrocketing inflation and the prospect of a possible recession, the Notices of Debt (NoDs) and Notices of Repayment (NoRs) could be putting low-income Canadians at a disadvantage as costs pile up, experts say. Some facing repayment have expressed frustration, telling the Star they want to know why they're now facing mounting bills as everyday costs rise.

It's just not a good time," said Emma Stepus, a CERB recipient and mother of two who lost her retail job at a bridal shop as COVID-19 spread across the country in early 2020.

There's just not much left over every month, and definitely not enough to pay back a $2,000 debt that I didn't even realize I had," Stepus added.

The cost of repayment has a disproportionate impact on low-income individuals who may still be facing a poor economic situation, said Leila Sarangi, director of social action at Family Service Toronto. Alongside a CERB amnesty working group, Sarangi is calling for repayment forgiveness for those in the lowest income brackets who cannot afford the additional expense.

We're talking about individuals and families who never had financial resiliency," Sarangi said, adding many people do not have a savings account to pull the money from. Some people Sarangi has spoken to have turned to existing lines of credit to pay the expense and gone further into debt; others have approached their place of worship to ask for funding.

CERB offered a lifeline for lower-income Canadians of all ages, Sarangi said. The monthly payments weren't padding bank accounts, she adds: The benefit funded supplies for children to study from home, and food or rent payments for people who couldn't afford it.

According to data available from Statistics Canada, 36.3 per cent of women received CERB compared to 34.2 per cent of men. Workers who are visible minorities were more likely to receive the funding, making up 41 per cent of recipients, with women and youth who are visible minorities slightly more likely to have applied for the benefits.

Together, CERB recipients comprise roughly a third of the working population over age 15 who earn $5,000 or more annually.

The Canada Revenue Agency, for its part, said it understands some may have difficulty repaying and has committed to supporting Canadians during these challenging times."

In a statement, a spokesperson for the CRA said those who are unable to repay might be able to defer. We will evaluate their situation and could defer payment. We would then follow up at a later date to re-evaluate their situation," the spokesperson said.

This option exists for those facing financial hardship, meaning those who would be deprived of basic necessities like food, clothing, accommodation, medical attention or utilities if they had to pay, the CRA said.

The agency does not appear to have standardized what hardship means, writing instead that whether financial hardship exists and the individual is able to pay is determined on a case-by-case basis, by examining an individual's particular circumstances."

More than a million Canadians have recently received an NoD.

The Star spoke to three CERB recipients to learn what repayment means for them. Their answers paint a stark picture of what new debt could mean for people trying to navigate life in a costlier post-lockdown Canada.

Among those now looking at repayment is Matias Wharton-Mery, who is dreading the possibility it may mean returning the entirety of the CERB he collected in 2020, when he was on the program for five months. Wharton-Mery was notified last week that he owes money to the Canada Revenue Agency, but he's still awaiting an update on the precise amount.

It'd be a big chunk of money for me," Wharton-Mery said, adding the payments he received helped him get through the final year of his schooling. After months of unemployment triggered by the pandemic, Wharton-Mery finally made his way back into the job market. For a while, he was living paycheque-to-paycheque, he says.

At that time, Wharton-Mery's eating habits suffered. He had to buy cheaper food, he says, which was often less healthy and which led to him not feeling good after some meals.

He said he's frustrated because everyone was encouraged to apply for CERB when the program was introduced. It doesn't feel good for (the government) to say that they're there to support us," but turn around after life returns to near-normal and ask for everything back, he says.

The repayment is likely to mean Wharton-Mery has less money for emergencies, such as a car breakdown, he adds.

Emily Dorey agrees with his frustration. It just isn't equitable, especially when the government encouraged people to apply if they needed it," she said. While Dorey has already repaid the $1,000 she owed, she had to dip into her student loan to cover the expense, effectively undoing the progress she had made on her existing debt.

I had certainly expected to be taxed on it but did not expect to have to repay it in full," Dorey said, adding if she knew in advance that she'd face this situation, she might have chosen a different route or not applied at all.

Since the pandemic severely limited her income, Dorey was staring down her credit card and student loan debt. Dorey says she felt desperate about her situation and applied for CERB, believing she qualified for assistance.

Any compassion that folks who were struggling during the beginning of the pandemic were given just isn't there anymore," she said.

Then there's, Emma Stepus, the mother of two who lost her retail job at a bridal shop. For the two months she was out of work, she made the same choice as Dorey and Wharton-Mery and applied for CERB.

The extra money helped Stepus to navigate her time at home with her family. Now, she's on the hook for $2,000, but says it would be a struggle to start paying back that debt.

To her, the repayment demand seems unfair," she said.

It's wrong for the federal government to add a new layer of stress onto people who are already struggling with increased expenditures from rising inflation, she said.

Jenna Moon is a Toronto-based business reporter, focused on personal finance and affordability. Follow her on Twitter: @_jennamoon