Executive Summary: Key Legal and Evidentiary Issues

• Central dispute involves whether the CRA Officer erred in finding the Applicant did not meet the $5,000 minimum income requirement for Canada Recovery Benefit eligibility.

• Applicant failed to provide supporting documents such as bank statements or cheques to corroborate invoices submitted during the review process.

• No history of reporting business income prior to 2019 raised questions about the claimed earnings.

• Despite being given a 2-week window, the Applicant did not address the concerns nor attempt to call the Officer back.

• Income tax declarations do not constitute proof of income, as established by this Court in the context of COVID-19 related benefits.

• Standard of review applied was reasonableness, requiring decisions to be coherent, rational, and justified with respect to the facts and law.

Background and CRB application

Jacob Lax, a self-employed consultant, applied for the Canada Recovery Benefit for a period starting in September 2020 and ending March 2021, amounting to $26,000 in benefits ($13,000 according to the Respondent). In 2024, the Canada Revenue Agency found that the Applicant was ineligible for the CRB because he had not earned the minimum income required.

The review process

Between July 2022 and July 2024, the Applicant's CRB application underwent two reviews to verify his eligibility under the CRB program. The Applicant was selected for a first review and was advised, by letter dated January 13, 2023, that he was ineligible for the CRB as he had not met the minimum income requirement of $5,000. A second review was undertaken, and a new officer contacted the Applicant by phone on June 18, 2024, to ask questions regarding the Applicant's business. During this call, the Applicant was unable to provide more information or answer the questions posed to him. The CRA Officer then gave the Applicant a 2-week window to address his concerns. Not only did the Applicant not address the concerns, but he did not attempt to call the Officer back to do so.

The CRA's findings

In coming to its conclusion that the Applicant did not meet the $5,000 criteria, the CRA Officer found that the Applicant: did not provide any supporting documents, such as bank statements or cheques, that could corroborate the amounts he allegedly earned, as seen on the invoices he submitted; did not have a history of reporting business income prior to 2019; and could not confirm he was working at the outbreak of the COVID-19 pandemic, despite being given the opportunity to call the CRA Officer back and provide additional evidence.

The Applicant's arguments before the Court

The Applicant sought the annulment of the July 12, 2024 decision, a declaration that he qualified for all CRB benefits, and that he is not obliged to reimburse the amount owing set out in his affidavit. To support his claim that he earned more than the minimum $5,000 threshold, the Applicant submitted his income tax declarations for the qualifying period. The Applicant suggested that, because the income tax declarations were never contested or reversed by the Respondent, they constitute proof of his earnings.

The Court's analysis and ruling

Madam Justice Gagné applied the reasonableness standard of review for CRB decisions. The Court rejected the Applicant's argument, noting that the argument that income tax declarations constitute proof of income has not been accepted by this Court in the context of COVID-19 related benefits. The Canadian tax system is based on the principles of self-reporting, and Notices of Assessment do not prove that applicants earned the income they reported in filing their income tax return, citing Aryan v Canada (Attorney General), Lapointe v Canada (Attorney General), Moncada v Canada (Attorney General), and Rehman v Canada (Attorney General). As this was the principal argument led by the Applicant, the Court found this finding alone dispositive of the matter. Having reviewed the record and considered the parties' submissions, the Court was not persuaded that the Officer committed a reviewable error. The application for judicial review was dismissed, and costs in the amount of $500 were granted to the Respondent.