Executive Summary: Key Legal and Evidentiary Issues

• Oliver Mo challenged the CRA's decision finding him ineligible for CERB benefits during periods 2-4 (April 12 to July 4, 2020)

• The applicant exceeded the $1,000 income cap during the relevant benefit periods despite claiming he had stopped working due to COVID-19

• Employer records were no longer available to management at the Costco warehouse, preventing clarification of the nature of payments received

• CRA's second ground for ineligibility—that Mr. Mo did not stop working for COVID-related reasons—was conceded as unreasonable by the Respondent

• Reasonableness review applied, requiring decisions to be based on internally coherent analysis justified by facts and law

• The Court rejected the Respondent's argument to rely on paragraph 142 of Vavilov to decline remitting the matter on the basis that the outcome is inevitable

Background and employment circumstances

Oliver Mo, a 75-year-old retired former Costco Canada employee, worked part-time at the company from 2010 until his retirement in 2022. In March 2020, as COVID-19 measures began to take effect, his manager at Costco informed him that he would not be scheduled to work until further notice because of the seriousness of the pandemic and his heightened risk because of his age (69 at the time). Mr. Mo therefore applied for and received the Canada Emergency Response Benefit (CERB) from March 15, 2020 to September 26, 2020. His reported income in 2020 dropped almost in half, from $30,815.37 in 2019 to $15,314.86 in 2020.

CRA compliance review and initial determination

Three years later, in September 2023, the CRA notified Mr. Mo that it had launched a compliance review and requested additional documentation to support his eligibility for the CERB payments he had received in 2020. Mr. Mo responded with an explanation of the impact of the pandemic on his employment and income during the benefit periods and attached bank statements from late 2019 and pay stubs from March 2, 2020 through September 27, 2020. On March 18, 2024, the CRA determined that Mr. Mo was ineligible for the CERB between March 15, 2020, and July 4, 2020 (CERB benefit periods 1-4), on the basis that he had earned more than $1,000 of employment income during these payment periods and did not stop working or have his hours reduced for reasons related to COVID-19.

Second review and the decision under challenge

Mr. Mo sought an internal review (called a Second Review), in support of which he again provided his pay stubs as well as email correspondence with a Costco assistant warehouse manager showing that he had requested an updated letter of employment specifying that he had been asked not to return to work in 2020 due to COVID-19. The Second Review decision maker contacted Mr. Mo by telephone to explain how eligibility criteria were computed and to confirm the reason for the CERB application. The decision maker issued the decision under review, finding that the first decision maker had erred in finding Mr. Mo ineligible for the CERB during benefit period 1, but that Mr. Mo was nevertheless ineligible during benefit periods 2-4 because he earned more than $1,000 of employment or self-employment income during the applicable periods and he did not stop working or have hours reduced for reasons related to COVID-19.

Mr. Mo conceded that his pay stubs show that he received payments from his employer during the relevant periods and that these payments, even excluding a bonus from the calculation, still exceed the $1,000 income cap set out in section 6 of the Canada Emergency Response Benefit Act, SC 2020, c 5, s 8. He was unable to explain the basis or reason for these payments and has been unable to obtain clarification from Costco because Mr. Mo's records are apparently no longer available to management at the Costco warehouse where he worked. Nevertheless, Mr. Mo submitted the payments must have been for work completed prior to the pandemic and that the payments should not be considered employment income for the purpose of calculating CERB eligibility because he was not actually working at the time, having stopped for reasons related to COVID-19.

Court's analysis of the reasonableness standard

The Federal Court applied reasonableness review to the CRA's CERB ineligibility decision, consistent with established case law including Dekany v Canada (Attorney General), 2025 FC 397; Aryan v Canada (Attorney General), 2022 FC 139; and Flock v Canada (Attorney General), 2022 FC 305. A reasonable decision is one that is "based on internally coherent and rational chain of analysis and that is justified in relation to the facts and law that constrain the decision-maker" as articulated in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65. The Respondent explained that the CRA was authorized to consider wages, vacation pay, statutory holiday pay, bonuses and personal pay when assessing whether Mr. Mo had exceeded the $1,000 income cap for benefits, and for each of the periods at issue these amounts exceeded the cap. The Respondent conceded that the decision maker's second ground for finding Mr. Mo ineligible was unreasonable but maintained that because the first ground was reasonable there is no reason to send the matter back for redetermination.

Ruling and outcome

The Federal Court dismissed Mr. Mo's application for judicial review. Despite the Court's sympathy for Mr. Mo's situation—he is retired and facing a demand to repay government benefits he applied for and received five years ago based on what was no doubt a good faith belief that he was eligible for them—Justice Brouwer was not persuaded that the CRA decision maker's calculation of the income cap was unreasonable. The Court accepted the Respondent's submission that the decision maker properly took into account the evidence, applied the law, and reasonably explained the outcome. While the second basis for the decision was unreasonable, as conceded by the Respondent, the error was immaterial given that the first ground was reasonable and was independent from the second.

The Court rejected the Respondent's argument to rely on paragraph 142 of Vavilov to decline to remit the matter for redetermination on the basis that the outcome is inevitable. Justice Brouwer noted there has been no "endless merry-go-round of judicial reviews and subsequent reconsiderations" as this is Mr. Mo's first judicial review. The style of cause was amended to identify the Attorney General of Canada as the Respondent. No order as to costs was made, as the Respondent had not sought costs. No specific monetary amount was ordered against the applicant in this proceeding regarding the repayment of benefits.