Executive Summary: Key Legal and Evidentiary Issues

• Applicant challenged ineligibility determinations for CERB, CRB, and CRCB benefits, all requiring a minimum of $5,000 in employment or net self-employment income during qualifying periods.

• Net self-employment income reported as losses ($6,587 in 2019 and $4,694 in 2020) could not contribute toward the income threshold for benefit eligibility.

• Procedural fairness was contested on grounds that the applicant allegedly did not understand the case she had to meet regarding her net income calculations.

• Evidentiary objections arose regarding documents in the Applicant's Record that were not properly before the administrative decision maker and did not fall within recognized exceptions.

• The reasonableness standard of review applied to the substantive decision required the court to assess whether the officer's conclusions were transparent, intelligible, and justified.

• Multiple administrative reviews (initial, second, and further second review) were conducted before the judicial review application was filed.

Background and the applicant's circumstances

Nicolette Knight, a self-represented applicant, sought judicial review of three decisions dated September 18, 2024, which determined she was ineligible for the Canada Emergency Response Benefit, the Canada Recovery Benefit, and the Canada Recovery Caregiving Benefit. These programs were created by the Government of Canada to alleviate the economic impact of the COVID-19 pandemic on employed or self-employed individuals. A fundamental eligibility requirement for all three benefits was that a claimant must have earned at least $5,000 (before taxes) of employment income or net self-employment income in the applicable qualifying period.

The applicant's income and eligibility assessment

Knight earned income from two sources during the relevant periods. Her employment income came from limited-term contracts as an instructor with a Toronto theatre company, while her self-employment income came from commissions she earned as a real estate agent. For the 2019 taxation year, she reported T4 income of $2,580 and net commission income of a loss of $6,587. For the 2020 taxation year, she reported T4 income of $2,393 and net commission income of a loss of $4,694. Because her self-employment income was reported as net losses, it could not factor into her eligibility for the benefits.

Administrative review process

The applicant's file was selected for a review of her eligibility for the benefits in January 2023. After being determined to be ineligible in February 2023, she requested a second review, which confirmed her ineligibility in August 2023. At her request, in September 2024, the CRA granted her a further second review of her eligibility. Since the applicant was entitled to remission in relation to the CERB benefits she received and would not have to repay them in any event, the further second review focussed on her eligibility for the CRB and the CRCB.

Procedural fairness arguments

The applicant contended that the decisions were made in breach of the requirements of procedural fairness because she did not know the case she had to meet. The Court rejected this argument, finding that the benefit eligibility requirements clearly state that, with respect to self-employment income, the relevant amount is pre-tax net income. CRA officers expressly asked the applicant about the net losses she had reported on her tax returns, putting her on notice that this was a concern. The applicant stated that her tax returns had been prepared properly but if she or her accountant had made mistakes in calculating her net income, they were "innocent" ones, yet she never resiled from or corrected the reported losses. The Court concluded she understood the significance of her net income figures and had a fair opportunity to meet that case.

Reasonableness of the decisions

On the merits, reading the decision letters together with the officer's case notes and in light of the record, the Court found the reasons for concluding that the applicant did not qualify for the benefits were transparent, intelligible and justified. Given that the applicant stood by the correctness of the amounts of self-employment income reported on her 2019 and 2020 tax returns, it was reasonable for the officer conducting the further second review to take the reported net losses at face value. The officer reviewed all of the records of employment available to him and expressly looked at the available information in the light that was most favourable to the applicant, assuming that some claimed income not reflected in records of employment had been earned in the relevant qualifying periods. Even after having done so, the officer found that the applicant's employment income still fell short of the required threshold for the CRB, the CRCB, or the CERB.

Ruling and outcome

Justice Norris of the Federal Court dismissed the application for judicial review, finding that the process followed by the decision maker was fair and the decisions were reasonable. The style of cause was amended to name the Attorney General of Canada as the correct respondent. The respondent did not seek costs and none were awarded. Accordingly, the Attorney General of Canada prevailed in this matter; no specific monetary amount was ordered as the case involved benefit eligibility determinations rather than damages.