Executive Summary: Key Legal and Evidentiary Issues

• Ms. Patang received two $2,000 CERB payments while simultaneously collecting Employment Insurance benefits, rendering her ineligible under section 6(1)(b) of the Canada Emergency Response Benefit Act

• A Service Canada agent allegedly advised the Applicant that she could offset the CERB overpayment by forgoing future EI claims of equal value, leading her to rely on this representation

• Section 12(1) of the CERB Act creates a mandatory obligation to repay income support payments received by individuals who were not entitled to them

• Public law promissory estoppel was considered as a potential remedy, requiring proof of a clear promise by a public authority that induced reliance and changed conduct

• Estoppel cannot prevent the application of express legislative provisions or override statutory obligations, particularly where the repayment requirement is mandatory rather than discretionary

• The Service Canada agent lacked authority to bind the CRA regarding CERB overpayments, as the agent administered EI benefits under different legislation with no jurisdiction over CERB

Background and parties

Nadera Patang challenged a January 30, 2024 decision by the Canada Revenue Agency confirming that she owed $3,000 to the CRA. Ms. Patang, who represented herself throughout the proceedings, received two $2,000 Canada Emergency Response Benefit payments for which she was ineligible between March 15, 2020 and May 9, 2020, and had already repaid $1,000 of the total overpayment.

The facts

Ms. Patang did not dispute that she received both Employment Insurance and CERB payments simultaneously during the relevant period. However, she maintained that a Service Canada agent administering EI told her over the phone that she could keep the $3,000 CERB overpayment by not collecting EI of equal value in subsequent months. Relying on this advice, Ms. Patang chose not to apply for EI in later months where she likely would have been eligible for benefits. After two reviews by different CRA officers examining her eligibility, the CRA determined that Ms. Patang must repay the $3,000 overpayment of CERB. She brought this judicial review application challenging the CRA's second redetermination of the issue.

Legislative framework

The enabling legislation for CERB is the Canada Emergency Response Benefit Act. Section 6(1) of the CERB Act sets out the eligibility criteria for income support payments. Critically, subsection 6(1)(b)(ii) prohibits individuals from receiving CERB payments if they receive benefits as defined in subsection 2(1) of the Employment Insurance Act for the same consecutive days on which they have ceased working. Because Ms. Patang received benefits under the Employment Insurance Act for the same period as her CERB payments, she was statutorily ineligible to receive the CERB payments. Furthermore, subsection 12(1) of the CERB Act creates a mandatory obligation on individuals who were not entitled to receive income support payments to repay the amounts. The provision states that if the Minister determines a person has received an income support payment to which they are not entitled, or an amount in excess of what they are entitled to, the person must repay the amount or excess amount as soon as feasible.

Reasonableness of the decision

Justice Azmudeh found that although the reasons provided by the CRA officer were brief, they were consistent with the non-discretionary language of the governing legislation and were responsive to the underlying facts. The court concluded that the decision was reasonable based on the clear statutory framework prohibiting simultaneous receipt of CERB and EI benefits.

Promissory estoppel analysis

Even though Ms. Patang did not raise the issue of promissory estoppel, Justice Azmudeh informed the parties that the court would address it given that Ms. Patang had relied on representations from a Service Canada agent. The court acknowledged that public law promissory estoppel may arise from representations of a public official, requiring proof of a clear and unambiguous promise made to a citizen by a public authority to induce the citizen to perform certain acts, along with reliance on that promise resulting in changed conduct. However, the court noted that estoppel in public law yields to an overriding public interest and cannot be invoked to prevent the application of an express legislative provision. The Supreme Court of Canada has held that promises made by public authorities in cases where estoppel was allowed were either not unlawful or were consistent with a statutory discretion.

The court found that both limitations on public law estoppel applied in this case. First, the legislative provision entitling a claimant to benefits was express, and the court cited Justice Fothergill's holding in a similar case that the legislation is paramount in such contexts. Second, the Service Canada employee's promise would have been inconsistent with the statutory discretion afforded to them because the employee would have been exercising delegated ministerial powers under the EI Act rather than the CERB Act, and the obligation to pay benefits to Ms. Patang and her corresponding obligation to repay them was mandatory rather than discretionary. To contradict these mandatory obligations would contradict the express text of the statute.

Court's observations

Justice Azmudeh expressed sympathy for Ms. Patang's situation, stating that there was no reason to doubt that she honestly relied on the agent's advice and believed that overpayment for CERB could be offset against not collecting EI. The court understood that navigating the multitude of programs administered by different government bodies was frustrating, and that it was reasonable for Ms. Patang to have trusted the authority of advice from a government employee, even though that employee had no authority to bind the program administered by another government entity. The court noted that its ability to offer remedies is limited in the judicial review process and expressed hope that the relevant authorities would consider the matter more globally to offer an equitable solution.

Ruling and outcome

The application for judicial review was dismissed without costs. The Attorney General of Canada was the successful party, and the CRA's decision confirming Ms. Patang's $3,000 repayment obligation was upheld. No monetary award was granted to either party, and no costs were ordered.