Executive Summary: Key Legal and Evidentiary Issues

• CRA determined the Applicant was ineligible for CERB and CRB benefits totalling $16,000 due to failure to meet the $5,000 minimum income threshold

• Significant confusion arose over whether $12,550 received under a Nova Scotia Self Employment Agreement constituted eligible self-employment income or employment insurance income

• The reviewing Officer failed to consider the Applicant's aberrational circumstances, including an employer's house fire that destroyed payment records needed to prove income

• Procedural fairness was breached when the Officer did not engage with the Applicant's difficulties in obtaining documentation or consider extending the submission deadline

• New cheque evidence submitted by the Applicant during judicial review was excluded as it was not before the original decision maker

• The Federal Court granted the judicial review application, remitting the matter for redetermination by a different CRA officer

The background and facts of the case

Sandra Louise Angst, a self-represented applicant, applied for and received the Canada Emergency Response Benefit (CERB) totalling $14,000 for the period of March 15, 2020 to September 26, 2020, and the Canada Recovery Benefit (CRB) totalling $2,000 for the period of September 27, 2020 to October 24, 2020. In 2018, Ms. Angst had opened a dog daycare and boarding business, financially supported by a provincial government program through a Self Employment Agreement with the Nova Scotia Department of Labour and Advanced Education, under which she received $12,550 in funding in 2019. When the COVID-19 pandemic struck, her business suffered a financial loss and then was closed in March 2020 due to COVID-19 restrictions. In addition to her business, Ms. Angst also worked during 2019 and 2020 for two companies, Mrs Magnetsigns and Mr Barter's Buy, Sell, Trade, and after her business closed, she sought and secured work cleaning the offices of a construction company.

The CRA eligibility reviews

In June 2023, the CRA commenced a review of Ms. Angst's eligibility for the benefits she had received. The central eligibility requirement was that applicants must have earned at least $5,000 (before taxes) of employment or self-employment income in 2019 or in the 12 months prior to applying. Ms. Angst cooperated and, after corresponding with the First Review officer, on August 22, 2023 submitted her 2020 T4A, 2020 T4, 2019 T4 from Mrs Magnetsigns, and a further 2019 T4. A CRA officer also noted that among the documents submitted had been the Applicant's 2019 T4E, which showed that $12,550 had been paid to her, which the Applicant noted was from the government of Nova Scotia as part of the Self Employment Agreement. Despite her submissions, the CRA's First Review concluded, by letters dated January 5, 2024, that she was not eligible, stating the information on file was not sufficient to prove the requisite earnings. The decision reason was updated to "Claim Not Supported by Info Provided."

In January 2024, Ms. Angst again submitted copies of the 2019 T4E reflecting the $12,550 payment and filed an E-objection with the CRA, disputing the First Review CERB repayment decision. The objection was closed "because it has nothing to do with income taxes, penalties or interest," and had essentially been sent to the wrong department of the CRA. Regardless, the Applicant's request for a second review was logged, and she sent in further documents in 2024.

The second and further second reviews

During the Second Review in May–June 2024, the reviewing officer requested bank statements and paystubs/invoices showing over $5,000 in employment or net self-employment income in 2019, 2020 or a year before the Applicant applied for CERB or CRB. The Applicant reported that she did not have anything else to send in. By letters dated June 4, 2024, she was again found ineligible for CERB and CRB.

A Further Second Review then commenced in 2025. On June 6, 2025, the reviewing Officer reached the Applicant to discuss her file. They discussed the income from the Nova Scotia Labour and Education program, which the Applicant had believed to be self-employment income, since in the program she was being paid to take courses and to help to set up her business. The Applicant had noted that she had spoken to her Member of Legislative Assembly, and had been told that these funds were indeed classed as self-employment income. The Officer was not certain this was the case, and asked the Applicant to establish that the 2019 T4E income of $12,550 was not related to employment insurance. It was not until June 24, 2025 that the Officer told the Applicant that the revenue from the Nova Scotia Labour and Education program was properly classed as a type of employment insurance benefit, and so the $12,550 income was considered employment insurance income. The Officer then explained that maternity and parental benefits were the only type of employment insurance income that could count towards the $5,000 income eligibility threshold for CERB and CRB.

The Applicant's difficulties in obtaining documentation

With the program income now excluded, Ms. Angst needed to establish her eligibility through her other employment income. She had been paid by cheque for work done for one employer, but faced extraordinary difficulties in securing documentation. When she contacted that employer to obtain records or copies of the cheques which showed she had been paid by the employer's business in 2019, she was told that the employer's house had burned down in a fire, and that as a result the employer had not been able to supply those records or otherwise help. Ms. Angst noted that she was trying to get records from her bank, and that she had previously submitted highlighted bank statements showing deposits to the CRA, but those bank statements did not show that the deposits were from the employer. She also stated that she had tried to get a Record of Employment from Service Canada in relation to that employment, but had been unsuccessful.

On July 3, 2025, she called the Officer and stated that she had submitted everything she was able to obtain by that time, and had tried her best to provide all of the information that she could. The Officer, however, did not appear to engage with or consider these aberrational circumstances, or ask the Applicant if she had a sense of how long it would take to get the banking records, or otherwise consider whether an extension on the previously set July 4, 2025 deadline might be warranted. Instead, the Officer merely told her the submitted documents would be reviewed and "for further clarification they might be contacted again otherwise they will receive the decision letters once the review is done." The Applicant was not contacted again, and on July 10, 2025, the Officer determined that Ms. Angst was not eligible for both CERB and CRB, for the same reason as the earlier decisions, as she did not meet the $5,000 income threshold.

The statutory framework

Eligibility for CERB is set out in sections 2 and 6 of the Canada Emergency Response Benefit Act, SC 2020, c 5, s 8, which require applicants to have earned $5,000 in employment or self-employment income in 2019 or the 12 months prior to their application. Similarly, section 3 of the Canada Recovery Benefits Act, SC 2020, c 12, s 2, imposes a $5,000 income threshold. Under section 12 of the CERB Act and section 28 of the CRB Act, persons who received benefits to which they were not entitled must repay those amounts. Only parental and maternity benefits under sections 22(1), 23(1), 152.04(1) and 152.05(1) of the Employment Insurance Act, SC 1996, c 23, are considered eligible income toward qualifying for CERB or CRB.

The procedural fairness analysis

The Federal Court, presided over by Justice Thorne, found that the Officer breached Ms. Angst's right to procedural fairness. The Court noted that the duty to act fairly comprises two components: the right to a fair and impartial hearing before an independent decision maker and the right to know the case against oneself and to be heard. There was significant confusion on all sides regarding whether the Self Employment Agreement income was eligible, and it was only after a document submission deadline had been set that the Officer clarified the income was not eligible. The Court emphasized that the Officer did not appear to engage with or consider the Applicant's aberrational circumstances, and did not ask whether an extension of the previously set deadline might be warranted. The Court cited Mahmoud v Canada (Attorney General), 2023 FC 1066, where a similar procedural fairness breach occurred when a decision maker did not give an applicant a reasonable amount of time to gather necessary evidence from third parties. The Court also noted the CRA's own non-binding "Confirming Covid-19 benefits eligibility" guidelines, which specifically indicate that if the taxpayer expresses legitimate concerns over the deadline being too short, officers should try to get a commitment for a reasonable new deadline, and that officers are charged with working collaboratively with applicants in the validation process.

As a preliminary matter, the Court noted that the Applicant had submitted a set of copies of fifteen cheques, each issued to her from two separate companies which employed her in 2019, which she stated were the records that the bank had not been able to provide to her before the Decision letters were issued. The Court found that this evidence could not be admitted, as it was not before the decision maker and did not fall into any of the exceptions to the general rule against the Court accepting new evidence in an application for judicial review.

The ruling and outcome

The Federal Court granted Ms. Angst's application for judicial review, finding she had been deprived of her ability to have a full and fair chance to be heard. The Court set aside the CRA Officer's Decision dated July 10, 2025, and remitted the matter back to the Canada Revenue Agency for redetermination by a different officer, who shall allow the Applicant a fresh opportunity to provide any further documentation in support of her eligibility claims, including the new cheque documentation. No costs were awarded to either party, and no specific monetary amount was ordered in Ms. Angst's favour, as the Court did not order that the Applicant be found eligible for the CERB or CRB, stating it was not the Court's role to do so in a case such as this. The title of proceedings was also amended to name the Attorney General of Canada as the Respondent.