Executive Summary: Key Legal and Evidentiary Issues

• The Minister’s March 1, 2024 redeterminations denied all CEWS and HHBRP benefits for qualifying periods 13–28, but at the hearing the Respondent conceded the Appellant’s entitlement to CEWS periods 13–21 and HHBRP periods 22–23, leaving only HHBRP periods 24–28 in dispute.

• For HHBRP periods 24–28 (December 19, 2021 to May 7, 2022), the Appellant’s claimed and reassessed-as-denied benefits totalled $45,014.07, with individual period amounts ranging from $3,787.72 to $9,230.84.

• The central legal question was whether, for periods 24–28, the Appellant’s COVID revenue was “one-half or less” of its pre-COVID revenue, as required for HHBRP eligibility.

• The Minister used average monthly revenue derived from the Appellant’s own T2 corporate tax returns and related statements, while the Appellant relied on month-specific figures prepared by or for Mr. Wu, unsupported by detailed source records and marked by inconsistencies and gaps.

• The Court found a lack of reliable, measurable financial information for the critical pre-COVID (January–February 2020) and COVID (January–June 2022) periods, and rejected Mr. Wu’s reconstructed COVID-period revenue in light of the T2 filings, bank statements, and accountant’s working papers.

• The appeal was allowed only to reflect the Respondent’s concession for benefit periods 13–23 and dismissed for HHBRP periods 24–28, so the Minister’s denial of HHBRP amounts for periods 24–28 stands, with the matter referred back for reconsideration and no order as to costs.

Background and procedural history

The Appellant, Postalong Technology Inc., applied for Canadian Emergency Wage Subsidy (CEWS) for qualifying periods 13–21 and Hardest Hit Businesses Recovery Program (HHBRP) benefits for qualifying periods 22–28. After these subsidies were paid, the Minister redetermined the Appellant’s eligibility by notice dated March 1, 2024, and reassessed to deny all such CEWS and HHBRP benefits. The appeal from those redeterminations was heard on November 17, 2025, in Vancouver, British Columbia, before the Honourable Justice Randall S. Bocock. Edward Wu acted as agent for the Appellant, and Jessye Kilburn appeared as counsel for the Respondent.

Purpose and structure of the CEWS and HHBRP

Parliament enacted the CEWS and HHBRP to provide relief for businesses, non-profit entities, and charities that were negatively impacted economically during the COVID-19 pandemic. To receive CEWS and HHBRP benefits, eligible entities had to experience a prescribed percentage decrease in revenue and be obligated to pay eligible remuneration to staff. In the case of non-arm’s length employees, benefits were restricted by eligible baseline remuneration. The programs operated on defined “qualifying periods,” generally two-week periods during the pandemic. Over time, the required threshold of reduced revenue increased across benefit periods, so later benefit periods demanded greater revenue reductions to qualify. In this case, that is why the Appellant could qualify mathematically for benefits in periods 13–23 but not 24–28.

Concessions at the hearing and disputed periods

At the hearing, Respondent’s counsel conceded that the Appellant was entitled to CEWS benefits for qualifying periods 13–21 and HHBRP benefits for qualifying periods 22–23. Only HHBRP benefit periods 24–28 remained outstanding and were the contested subject of the appeal and the reasons. For those five qualifying periods, the claimed HHBRP benefits, which had been paid and were then denied on reassessment, were:

• Period 24 (December 19, 2021 to January 15, 2022): $7,221.72
• Period 25 (January 16 to February 12, 2022): $7,044.12
• Period 26 (February 13 to March 12, 2022): $9,230.84
• Period 27 (March 13 to April 9, 2022): $3,787.72
• Period 28 (April 10 to May 7, 2022): $3,902.12
  for a total of $45,014.07.

Pre-COVID revenue: competing positions

The Respondent filed an affidavit summarizing the Appellant’s total annual revenue from goods and services, plus interest and less subsidies, as reported in its T2 corporate tax returns for 2019–2022. The totals were:

• 2019: $103,301 from goods and services, $38,451 interest, total $141,752
• 2020: $78,761 from goods and services, less $53,967 in subsidies, total $24,973
• 2021: $149,737 from goods and services, less $145,970 in subsidies, total $57,66.00 (as shown in the text)
• 2022: $198,405 from goods and services, less $52,943 in subsidies, total $145,461
  Mr. Wu, an officer and director of the Appellant, testified and accepted in cross-examination that the annual revenue from sales of goods and services and the subsidy amounts were accurate on an annual basis. He disputed that pre-COVID and COVID revenues for specific months could be derived by simply dividing annual figures by twelve, asserting that there were large monthly variations.

Mr. Wu gave specific pre-COVID monthly revenue figures for January and February 2020: $4,700 and $5,800 respectively. He said these should be used to determine pre-COVID revenue. The Court noted that for at least some earlier benefit periods (17–19 and 21–23), the Appellant appears to have chosen the “alternate approach” using the first two months of 2020, and that the wage subsidy calculations for uncontested qualifying periods 18, 19, and 23 also used the $4,700 and $5,800 amounts. The Court used those numbers for the purposes of its reasons, but expressly held that applying the general approach instead would not have changed the outcome.

COVID-period revenue for periods 24–28

For COVID-period revenue relevant to periods 24–28, Mr. Wu testified that the Appellant’s monthly revenue for early 2022 was:

• January 2022: $1,500.00
• February 2022: $850.00
• March 2022: $1,730.00
• April 2022: $1,260.00
• May 2022: $1,350.00
  He supported these figures with a list (Exhibit A-3) identifying “2020 revenue” for described periods #1 and #2, later identified as January and February 2020, as $4,700 and $5,800, and with corresponding 2022 figures (including real-time correction during the hearing) as numbers 1–4 in columns and rows identified as monthly 2022 revenue. He also referred to wage subsidy calculations for earlier periods that used the same January and February 2020 amounts, a list of “director investments” from January 3, 2020 to December 13, 2021 totalling more than $205,000, and bank statements showing “ATM deposits” in early 2020 and in January to May 2022.

Mr. Wu explained that the office manager did not deposit daily cash receipts but instead held them until a certain threshold was reached, causing large, irregular deposits. He argued that this made both the bank statements and computer-generated receipts journal unreliable for identifying when revenue was actually earned and undermined the Minister’s use of an average.

The legal test and focus on COVID revenue

The issue for HHBRP qualifying periods 24–28 was whether the Appellant’s COVID revenue was one-half or less than its pre-COVID revenue. While the parties did not precisely agree on pre-COVID revenue (with the Respondent treating it as $2,066.00 for all or for some periods, and Mr. Wu giving an average of $5,275.00 based on $4,700.00 and $5,800.00), the Court held that this disagreement did not affect the outcome. The determinative question was the Appellant’s COVID revenue in the four-week qualifying periods 24–28, running from December 19, 2021 to May 7, 2022. On the Court’s analysis, if COVID revenue for those periods exceeded $2,635.00, even on Mr. Wu’s own numbers, it would not be one-half (50%) or less than pre-COVID revenue.

Documentary evidence introduced by the Crown

Through cross-examination, the Respondent introduced:

• the Appellant’s bank statements (Exhibit R-1)
• an affidavit with revenue from goods and service sales for relevant periods (Exhibit R-2)
• the accountant’s working papers (Exhibit R-4), including annual trial balances, receipts/disbursements journal entries for 2019 and 2020, and income statements and receipts/disbursement journal for 2022
  These materials were used to test the Appellant’s asserted monthly revenue and to ground revenue analysis in the Appellant’s own filed returns and accounting records.

Court’s assessment of credibility and records

Justice Bocock identified multiple concerns with the Appellant’s evidence and records. Mr. Wu’s grouping of deposits as either cash receipts of the business or cash infusions by related parties was described as “elusive, variable and insusceptible of any conclusion one way or the other.” His testimony was not consistent as to why some amounts were treated as advances and other similar amounts as revenue. He also resisted explaining journal entries, indicating that the office manager and accountant were better suited to do so, while acknowledging neither attended as witnesses. Certain records were said to be unavailable without much explanation.

The Court noted that documents such as the revenue, wage subsidy and rent subsidy summary page, prior and COVID revenue calculation sheets (Exhibit A-3), and the third-party cash injection schedule (R-3) were unauthored, constructed for litigation, incorrect in instances, inscrutable in others, and not referenced to any historical financial data. There was no distinct cash/revenue receipts or cash/revenue disbursements journal beyond the annual trial balances/working papers and single general monthly bank statements.

The T2 corporate tax returns showed that 2022, which encompassed all applicable benefit periods, was the Appellant’s best year in terms of revenue. Mr. Wu’s explanation was that the first five months of 2022 were “terrible” while the final seven months were “extremely successful financially,” but there was no meaningful or substantive explanation for this “diametrically opposite financial performance,” which the Court observed occurred some two years after the start of the pandemic and just months before the business ceased to operate. If the Court accepted his explanation and his asserted COVID revenue for January to May 2022, the cumulative revenue (excluding subsidies) would have been $6,740.00 for the first five months and $138,721.00 for the final seven months of 2022, again without substantive description as to why.

The Court concluded there was a “dearth of reliable, measurable financial information” for January and February 2020 (pre-COVID revenue) and even less for January to June 2022 (COVID revenue), beyond the T2 returns and attached statements on which the Minister—rather than the Appellant—relied.

Findings on revenue and application of the HHBRP test

On balance, the Court found that the Appellant’s COVID revenue exceeded $2,635.00 for qualifying periods 24–28 and therefore was not one-half or less of its pre-COVID revenue. As a result, the Appellant did not meet the HHBRP revenue-drop requirement for those periods. Justice Bocock acknowledged that the Respondent had used a consistent approach in the absence of reliable source documents: averaging the declared T2 corporate tax return revenue from the Appellant’s own filings. That method had afforded the Appellant CEWS and HHBRP benefits for periods 13–23, when the threshold revenue disparity between pre-COVID and COVID periods was prescribed at a lesser amount. Given the increased thresholds for periods 24–28 and the further diminished quality of the Appellant’s business records, the Court could not conclude differently from the Minister for those later periods.

Ruling and overall outcome

In the formal judgment, the Court ordered that the appeal from the Minister’s March 1, 2024 redeterminations be allowed on a limited basis. By concession of the Respondent, the Appellant’s claims for CEWS and HHBRP benefits for qualifying periods 13–23 were allowed. The HHBRP benefits claims for qualifying periods 24–28, inclusive, were dismissed. The matter was referred back to the Minister for reconsideration and reassessment. In light of the mixed result, the Court ordered that there be no costs.