Executive Summary: Key Legal and Evidentiary Issues

• CRA's rejection of Canada Recovery Benefit (CRB) and Canada Recovery Sickness Benefit (CRSB) applications lacked justified, transparent, and intelligible reasoning regarding income threshold findings.

• The Applicant disputed CRA's determination that he did not earn at least $5,000 in employment or net self-employment income in the relevant periods.

• Repeated unreasonable decisions by CRA—this marked the third judicial review challenge by the Applicant after two prior settlements.

• Whether a substituted decision ordering direct benefit payment was warranted under the Vavilov framework.

• Eligibility for CRB periods 8-27 remained contested, with the Applicant claiming he was blocked from applying within the 60-day statutory deadline.

• Scope of redetermination authority and whether CRA could consider periods for which no timely application was filed.

Background and benefit applications

Paul Armatowicz, a self-represented applicant, brought a judicial review application before the Federal Court of Canada challenging the Canada Revenue Agency's decisions rejecting his applications for the Canada Recovery Benefit and the Canada Recovery Sickness Benefit. Mr. Armatowicz had applied for CRB for benefit periods between September 27, 2020, and January 2, 2021 (periods 1-7), and between October 10, 2021, and October 23, 2021 (period 28). He subsequently applied for CRSB for benefit periods between January 16, 2022, and February 26, 2022 (periods 69-74). The CRA finally refused all applications on February 13, 2025.

The income threshold dispute

The central issue in the CRA's refusal was its finding that Mr. Armatowicz did not earn at least $5,000 (before taxes) of employment and/or net self-employment income in 2019, 2020, or in the 12 months before the date of his applications. Mr. Armatowicz maintained that this finding was unreasonable and did not reflect the evidence he had submitted. The Respondent, the Attorney General of Canada, conceded that the CRB decision "did not in a justified, transparent and intelligible manner, provide the Applicant with justification of why he did not meet the CRB Income Threshold." Similarly, the CRSB decision "did not provide the Applicant with justification for why the Second Invoices were unconvincing or insufficient to ascertain the self-employed Applicant's income between March 4, 2021, and March 3, 2022."

History of prior judicial reviews

This case was notable for being Mr. Armatowicz's third challenge to the CRA's refusal to grant him these benefits. On both previous occasions, his applications for judicial review were settled by the Respondent. Given this history, Mr. Armatowicz expressed understandable skepticism that another redetermination would result in a better outcome. He requested that the Court not only quash the decisions and order redetermination but also "order the CRA to pay…the full amount of the CRB and CRSB, including all missed payments for the periods in question" without further delay. He further asked the Court to find that he was owed payments for CRB periods 8-27, claiming he was blocked from applying for benefits during those periods despite being eligible. Mr. Armatowicz did not produce evidence to support his claim that he was blocked.

The Respondent's position and the Vavilov framework

The Respondent opposed the imposition of a substituted decision, relying on Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 at paragraphs 141-142, which establishes that reviewing courts will only substitute a decision in limited circumstances, such as "where it becomes evident to the court, in the course of its review, that a particular outcome is inevitable and that remitting the case would therefore serve no useful purpose." The Respondent also argued that because Mr. Armatowicz did not apply for benefits for periods 8-27 within the 60-day statutory deadline under subsection 4(2) of the Canada Recovery Benefits Act, SC 2020, c 12, s 2, the CRA had no authority to grant him those benefits.

The Court's analysis and ruling

Justice Brouwer agreed with both parties that the decisions were unreasonable and must be quashed. However, the Court was unable to grant Mr. Armatowicz's request for a substituted decision. While sympathizing with his frustration regarding the delays and repeated errors by the CRA, the Court was not convinced based on the record and submissions before it that the outcome of a redetermination was inevitable. The Court was also unpersuaded by the Respondent's argument that Mr. Armatowicz's ineligibility for periods 8-27 was a foregone conclusion, noting that he would have an opportunity on redetermination to make further submissions and provide proof of having been blocked, and that the CRA would be required to give any such submissions and evidence proper consideration. The Court ordered that Mr. Armatowicz's eligibility for CRB and CRSB benefits be redetermined expeditiously by a different officer on the basis of the full record and any additional submissions and/or evidence provided by Mr. Armatowicz. No order as to costs was made, as Mr. Armatowicz had not sought costs and the Respondent had quite properly conceded, early in the proceedings, the unreasonableness of the decisions under review. However, the Court noted that if the CRA renders yet another unreasonable or unfair decision, costs may well be justified, as indeed might be a substituted decision to allow Mr. Armatowicz to step off the "endless merry-go-round of judicial reviews and subsequent reconsiderations." No specific monetary amount was awarded in this decision, as the matter was remitted for redetermination rather than resolved on the merits.