Executive Summary: Key Legal and Evidentiary Issues

• Judicial review of Canada Revenue Agency second-review decisions denying Frederico Ramos eligibility for the Canada Recovery Benefit and the Canada Worker Lockdown Benefit.

• The court found a breach of procedural fairness regarding the CRB because the second review was concluded 16 days after advising the applicant to consult an accountant, without setting a deadline or advising that the review would end on August 18, 2022.

• The applicant’s 2019 reassessment, issued on September 1, 2022 and increasing his net self-employment income to $6,062, was not before the Second Officer but was considered in assessing procedural fairness for the CRB.

• No breach of procedural fairness was found for the CWLB because the 2019 reassessment was not relevant to CWLB eligibility and the Second Officer had explained that pension income was not qualifying income and confirmed there was no additional income to report.

• The CWLB decision was found reasonable based on the Second Officer’s findings that the applicant did not meet the $5,000 net income requirement and that his region was not designated as a COVID-19 lockdown region during some of the relevant periods.

• The application was allowed in part: only the CRB second-review decision was sent back to a different officer for reconsideration, and no costs were awarded.

Facts and procedural background
The applicant, Frederico Ramos, who is self-represented and earns commission income, applied for the Canada Recovery Benefit for periods between September 27, 2020 and October 9, 2021, and for the Canada Worker Lockdown Benefit for periods between October 24, 2021 and March 12, 2022. The Canada Revenue Agency’s first-review letters dated June 10, 2022 advised that he was ineligible for both benefits because he had not earned at least $5,000 of qualifying employment or net self-employment income in the relevant reference periods. The applicant requested a second review on July 5, 2022, and a different officer conducted the review. On August 2, 2022, the Second Officer spoke with the applicant by phone, explained that pension income is not qualifying income, asked if he had other income to report, and suggested that he consult an accountant or financial advisor. The applicant stated that he had no additional income to report and that he would speak to an accountant and get back to the Second Officer. The Second Officer made the CRB and CWLB second-review decisions on August 18, 2022. The CRA issued a reassessment of the applicant’s 2019 tax return on September 1, 2022, increasing his net self-employment income to $6,062. By letters dated September 2, 2022, the CRA advised the applicant of the CRB and CWLB decisions. The applicant named the Canada Revenue Agency as respondent, but the court held that the proper responding party is the Attorney General of Canada and amended the style of cause accordingly.

Benefit framework and record before the decision maker
For CRB, section 3 of the Canada Recovery Benefits Act required at least $5,000 of prescribed income in specified reference periods, with self-employment income calculated on a net basis. For a two-week period beginning in 2020, the $5,000 had to be in 2019 or the 12-month period preceding the day of the first application, and for a two-week period beginning in 2021, the $5,000 had to be in 2019, 2020, or the 12-month period preceding the day of the first application. For CWLB, section 4 of the Canada Worker Lockdown Benefit Act required at least $5,000 of prescribed income in specified reference periods, with self-employment income calculated on a net basis, and required that the loss of employment, inability to work, or reduction of at least 50% in average weekly income be due to a designated lockdown. For a week beginning in 2021, the $5,000 had to be in 2020 or the 12-month period preceding the application, and for a week beginning in 2022, the $5,000 had to be in 2020, 2021, or the 12-month period preceding the application. The court held that the Second Officer made the decisions on August 18, 2022, and that the applicant’s 2019 reassessment dated September 1, 2022 was not part of the record before the Second Officer. The court declined to consider the reassessment and other additional materials on the merits but referred to the reassessment in assessing procedural fairness.

Procedural fairness and the CWLB decision
The court found that procedural fairness required that the applicant receive notice of the case to meet and an opportunity to respond by providing information to substantiate his eligibility for the benefits. For the CRB, the court held that, after recommending on August 2, 2022 that the applicant seek professional advice, the Second Officer allowed an unduly short period of time before concluding the second review on August 18, 2022, without setting a deadline for further information or advising that the second reviews would be concluded on that date. The court noted that the timing of the 2019 reassessment indicated that the applicant took steps within a reasonable period to have his 2019 return reassessed. The court concluded that the process that led to the CRB decision did not afford a meaningful opportunity to respond and did not meet the duty of procedural fairness. The court held that the fact that the 2019 reassessment was issued after the CRB decision did not oblige the CRA to reopen the second review; the breach arose from the decision to conclude the review on August 18, 2022 without allowing a reasonable period for the applicant to take steps based on the professional advice. The court found that this procedural fairness breach had no impact on the CWLB decision because the 2019 reassessment was not relevant to CWLB eligibility.

Reasonableness and outcome of the case
The court did not address the reasonableness of the CRB decision after finding a lack of procedural fairness. For the CWLB decision, the court held that the Second Officer reviewed whether the applicant met the $5,000 income requirement in the applicable periods and recorded that the documents showed $805 in net commission income in 2020 and no net commission income in 2021, leading to the conclusion that the applicant did not meet the $5,000 minimum income requirement in 2020, 2021, or in the 12 months before his first application on October 24, 2021. The Second Officer also found that the applicant’s region was not designated as a COVID-19 lockdown region during some of the relevant periods, and the court noted that the failure to meet the minimum income requirement independently made him ineligible for CWLB. The court held that the Second Officer’s reasons were transparent and intelligible and that the CWLB decision was justified in relation to the record and the CWLB Act. The application for judicial review was granted in part, and the matter was sent back only on the CRB second-review decision to be reconsidered by a different officer having regard to the court’s reasons. The court ordered that no costs be awarded.