Executive Summary: Key Legal and Evidentiary Issues

• Shelly Herrera sought judicial review of a CRA decision finding her ineligible for the Canadian Emergency Response Benefit (CERB) on the basis that she did not stop working due to COVID-19.

• Central to the dispute was whether the Applicant could demonstrate continuous income or work activity between March 2019 and the commencement of the pandemic in spring 2020.

• The Applicant's motion to file a New Affidavit containing a transcript of her conversation with the CRA Officer was granted under Rule 312, as it was relevant to procedural fairness.

• Evidence showed the Applicant's invoices and bank deposits stopped in March 2019, with the proof of work she provided relating to September 2020—after the CERB periods.

• Procedural fairness was not breached, as the Officer clearly communicated the requirement to show work continuity until the pandemic began.

• The Federal Court applied the reasonableness standard for the merits and correctness standard for procedural fairness, ultimately dismissing the application.

Background and factual circumstances

Shelly Herrera, a self-represented applicant, received CERB payments for six four-week periods between April 12, 2020, and September 26, 2020. By letter dated October 29, 2020, the CRA advised her that she was ineligible because she had not stopped working, or had her hours reduced, for reasons related to COVID-19. A subsequent letter dated April 23, 2024 advised that the CRA had completed a review of her eligibility and found she was not eligible because she did not earn at least $5,000 (before taxes) of employment and/or self-employment income in 2019, or in the 12 months before the date of her first application.

On May 10, 2024, the Applicant submitted a written request to the CRA for a second review of her CERB eligibility, accompanied by documentation including documents reflecting the Applicant invoicing or being paid amounts totalling $10,800.00 in January and February of 2019. On May 17, 2025, the Applicant submitted additional documents to the CRA, including documents reflecting invoicing by or payments to the Applicant, or a company in which she has an interest, in January to March of 2019 and commencing again in September 2020. Following telephone conversations between the Applicant and the Officer on May 1 and 15, 2025, the Officer sent a letter dated May 23, 2025 conveying the Decision.

The CRA Officer's reasoning

The Officer's notes dated May 21, 2025 stated that the benefit recipient earned $9,536 from net self-employment income in 2019 and did not report any eligible income in 2020. The $5,000 income requirement was validated through cheques, invoices and bank deposits. However, invoices and bank deposits stopped in March 2019, and the Applicant did not send in any document to prove she was still working from April 2019 until COVID-19 hit. The proof of work she provided was in September 2020, which was after the CERB periods. The Officer concluded that she stopped working in March 2019 and her income was not affected by COVID-19, deeming her not eligible for CERB periods 2-7.

Applicant's motion to file additional evidence

Eight days before the hearing scheduled for January 28, 2026, the Applicant filed a Motion Record dated January 20, 2026, seeking leave under Rule 312 to file a New Affidavit sworn on January 15, 2026, to supplement her Original Affidavit sworn on July 23, 2025. The Court applied the test from Forest Ethics Advocacy Association v National Energy Board, 2014 FCA 88, finding that the transcript of the telephone conversation was admissible under the procedural fairness exception recognized in Association of Universities and Colleges of Canada v Canadian Copyright Licensing Agency (Access Copyright), 2012 FCA 22. The evidence was relevant and appeared to have significant probative value for assessing whether the Applicant was afforded procedural fairness. The motion was granted, and the New Affidavit as included in the Motion Record was deemed to have been filed in the application.

Standard of review applied

The Court applied the correctness standard to the procedural fairness issue, requiring an assessment of whether the procedure followed was fair having regard to all the circumstances, citing Canadian Pacific Railway Company v Canada (Attorney General), 2018 FCA 69. For the substantive merits of the decision, the Court applied the reasonableness standard as established in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, examining whether the decision was justified, intelligible, and transparent.

Reasonableness of the decision

The Court found that the Applicant had not identified any substantive defect in the Officer's analysis of her CERB eligibility. The Decision accounted for the information that the Applicant had provided and explained the conclusion that, in the absence of any evidence that the Applicant was receiving income between March 2019 and the commencement of the COVID-19 pandemic in the spring of 2020, the Applicant had not established that her income was affected by the pandemic. While the Applicant was dissatisfied with the Decision because she had additional income information she could have provided to the Officer, such information was not relevant to the Court's review of the reasonableness of the Decision, which must be based on the information that was before the Officer.

Procedural fairness assessment

The Applicant argued she misunderstood the Officer's requests during their May 1, 2025 conversation, believing that demonstrating any income in that time period would be sufficient. The transcript revealed that the Officer explained the need to prove the $5,000 requirement and also to prove that because of COVID-19 she could not work. The Officer stated that from February 2019 until April 2020, when the Applicant applied, the Officer needed to know whether she earned any income and whether she was still working. The Officer also clarified that if the Applicant's last paystub was in September 2019, for example, she could indicate that from September she did not work and did not earn any income, but reminded her that if she did not work after that, she may not be eligible. The Court concluded there was no breach of procedural fairness, as the Officer identified the requirement several times and the Applicant was afforded the opportunity to present her case fully and fairly.

Ruling and outcome

The Federal Court dismissed the application for judicial review, finding the Decision reasonable and made in a procedurally fair manner. The Applicant was granted leave under Rule 312 to file the New Affidavit. While the Respondent, the Attorney General of Canada, prevailed in this application, it did not claim costs, and therefore no costs were awarded against the Applicant.