Executive Summary: Key Legal and Evidentiary Issues

• Judicial review was sought for three CRA decisions denying COVID-19 emergency benefits.

• The applicant failed to prove income eligibility of $5,000 from employment or self-employment.

• CRA relied on unpaid invoices and modified tax filings submitted after audit initiation.

• The court assessed whether unpaid invoices and RRSP withdrawals qualified as “income.”

• Reasonableness of the CRA’s decision-making process was central to the court’s analysis.

• New evidence introduced during judicial review was deemed inadmissible.

Facts and outcome of the case

Background and benefit claims

The applicant, Denis Richard, filed for three types of federal emergency benefits during the COVID-19 pandemic: the Canada Emergency Response Benefit (CERB), the Canada Recovery Benefit (CRB), and the Canada Worker Lockdown Benefit (CWLB). These benefits were administered by the Canada Revenue Agency (CRA), and eligibility required a minimum of $5,000 in employment or self-employment income in either 2019 or the 12 months prior to the application.

Richard initially received payments totaling $39,680, but in 2022, the CRA selected his file for review. It found that his income declarations for 2019 and 2020 showed no employment or self-employment earnings. The CRA asked Richard to submit evidence of income, prompting him to file invoices and bank statements, and later to amend his tax filings to reflect business income.

CRA’s findings and decisions

Despite several submissions, including invoices related to business activities under the brand “BHealth” and updated T2125 forms, the CRA found that Richard did not meet the income threshold. The agency cited five main reasons: no original income declarations, no prior self-employment history, only two invoices submitted, confirmation that invoices were unpaid, and insufficient net income reported in revised filings.

The CRA issued formal decisions on May 28, 2024, determining that Richard was ineligible for all three benefits. These decisions prompted him to file for judicial review.

Legal arguments and evidentiary disputes

Richard argued that the CRA had disregarded relevant explanations and documentation. He claimed that eligibility requirements were ambiguous and referenced contradictory notes from CRA agents suggesting he was initially found eligible. He also asserted that an agent verbally confirmed his eligibility during a call.

The Attorney General of Canada, representing the CRA, maintained that the agency acted reasonably in its evaluation. The government emphasized that unpaid invoices and RRSP withdrawals could not qualify as income and that amended tax filings made after the audit began lacked sufficient credibility.

The court’s analysis

The court applied the standard of reasonableness under the Vavilov framework. It found the CRA’s decisions to be coherent, well-explained, and based on the evidence before the agency at the time. The court upheld the CRA’s interpretation that unpaid invoices do not constitute earned income under the applicable legislation. Similarly, RRSP withdrawals were not counted toward the $5,000 income threshold for benefit eligibility.

Richard’s attempts to introduce new evidence or arguments at the judicial review stage were rejected. The court emphasized that it cannot consider documents or explanations not previously submitted to the decision-maker unless certain narrow exceptions apply, which were not met here.

Decision and conclusion

The court dismissed all three applications for judicial review. It concluded that the CRA’s decisions were reasonable and not legally flawed. While the Attorney General requested $500 in costs, the court exercised discretion and declined to award costs against Richard due to his self-represented status.