Executive Summary: Key legal and evidentiary issues

• Matthew Simser was found ineligible for the Canadian Recovery Benefit (CRB) for failing to meet the minimum $5,000 net self-employment income threshold under paragraph 3(1)(d) of the Canadian Recovery Benefits Act.

• The CRA calculated Mr. Simser's 2019 income at approximately $4,395 after deducting his originally claimed Capital Cost Allowance (CCA) from his gross self-employment revenue.

• Admissibility of Mr. Simser's affidavit evidence was conceded by the Respondent, but the Court held it could not re-weigh evidence or draw its own conclusions on eligibility under the reasonableness standard of review.

• Mr. Simser argued his amended 2019 tax return—removing the CCA—should have been used, but the CRA reasonably relied on the original return since Mr. Simser confirmed the CCA was directly related to his filmography business.

• The Court distinguished this case from Judt and Lydford, finding subsection 3(2) of the Act does not permit alternative interpretations of self-employment income and the CRA agent's reasoning was fully documented.

• Application for judicial review was dismissed without costs, with the Court commending Mr. Simser's honesty and integrity as a self-represented litigant.

Background and facts of the case

Matthew Simser, a self-represented litigant, was a young entrepreneur who turned 20 years old in 2019 and launched a filmography business as a newly self-employed individual. When the COVID-19 pandemic struck, Mr. Simser applied for the Canadian Recovery Benefit (CRB), a social benefit established under the Canadian Recovery Benefits Act, SC 2020, c 12, designed to alleviate the economic impact of the pandemic. Between September 27, 2020 and October 9, 2021, he received CRB payments for 27 two-week periods. To qualify, applicants were required under paragraph 3(1)(d) of the Act to have earned at least $5,000 in employment or net self-employment income in 2019 or in the 12-month period before the day on which the claiming individual made their application. Self-employment income was defined under subsection 3(2) as "revenue from the self-employment less expenses incurred to earn that revenue."

The CRA compliance review and second review process

The CRA selected Mr. Simser for a compliance review and, in a letter dated June 1, 2022, found him ineligible for the CRB on the basis that he had not met the $5,000 income threshold. Mr. Simser requested a second review, which again found him ineligible on December 8, 2023. He sought judicial review of this initial second review determination, but the matter was eventually discontinued after both parties agreed it would be remitted to another CRA agent for redetermination.

Mr. Simser's additional submissions and the CRA's redetermination

In April 2024, Mr. Simser provided the CRA with additional submissions ahead of the redetermination, including evidence of additional income and an affidavit expressing his intention to remove the Capital Cost Allowance (CCA) from his 2019 tax return, accompanied by a draft amended tax form. During a phone call on May 7, 2024, a CRA agent asked Mr. Simser about the expenses underlying his original CCA claim. Mr. Simser confirmed that the CCA was for equipment directly related to his filmography business and that he claimed the same type of expense as CCA in the following year. On July 8, 2024, the CRA issued its Final Second Review Determination, again finding Mr. Simser ineligible. The agent's notes calculated his 2019 net self-employment income at approximately $4,395—below the required $5,000—after deducting the original CCA from gross income and declining to rely on the amended tax return, since it had been altered only after the initial eligibility determination and Mr. Simser himself had confirmed the CCA was genuinely business-related.

The applicant's arguments before the Federal Court

Mr. Simser raised several arguments on judicial review. He contended that the CRA erred by not using his amended 2019 tax return as the basis for evaluating his business expenses, arguing this approach would have been consistent with the Income Tax Act. He also submitted that the CRA's reliance on its internal policy on Confirming Covid-19 Benefit Eligibility led to an unduly restrictive interpretation of self-employment income. Additionally, he argued that since subsection 3(2) of the Act does not specify the method of calculating net self-employment income, the CRA agent should have considered excluding the CCA expenditures. Mr. Simser cited Canada (Attorney General) v Buchanan in support of the Court drawing its own conclusions from his affidavit evidence, and relied on Lydford v Canada (Revenue Agency) and Judt v Canada (Attorney General) to argue the CRA agent's reasoning was unresponsive and unduly narrow.

The Court's analysis and distinction of case law

The Honourable Mr. Justice Ahmed applied the reasonableness standard of review as established in Canada (Minister of Citizenship and Immigration) v Vavilov. While the Court found Mr. Simser's affidavit evidence admissible under Rule 309(2) of the Federal Court Rules, it held that it was not open for the Court to re-weigh the evidence and draw its own conclusions—a function distinct from the Tax Court of Canada's more active fact-finding role discussed in Buchanan. The Court distinguished Lydford, noting that unlike in that case, the CRA here maintained a full certified tribunal record, including Mr. Simser's submissions to the CRA, notes analyzing Mr. Simser's submissions, and notes regarding the phone calls between the CRA agent and Mr. Simser, demonstrating that Mr. Simser's arguments had been duly considered. The Court also distinguished Judt, finding that subsection 3(2) of the Act does not allow for a wide variety of interpretations of self-employment income, unlike the broader income-source provisions at issue in that case. Justice Ahmed agreed with Justice Gascon in Lavigne that the formula in subsection 3(2)—revenue less expenses—is the proper method to determine CRB eligibility, and that provisions of the Income Tax Act cannot replace those of the Canadian Recovery Benefits Act.

Ruling and outcome

Ultimately, Justice Ahmed found no legal basis for disturbing the CRA agent's decision. The Court held that the Final Second Review Determination was reasonable, as it accorded with the legal framework for the CRB eligibility requirements and the evidence before the decision-maker. The CRA agent had reasonably relied on Mr. Simser's originally claimed CCA as it more accurately reflected his true business expenses, and the agent's reasoning properly applied the statutory definition of net self-employment income. While the Court expressed sympathy for Mr. Simser and commended him for his honest, respectful, and highly able submissions as a self-represented litigant, the application for judicial review was dismissed. The successful party was the Attorney General of Canada (the Respondent). No costs were awarded, and no specific monetary amount was ordered, as the decision simply upheld the CRA's finding of ineligibility for the CRB without addressing the precise repayment obligation.