Executive Summary: Key Legal and Evidentiary Issues

• Central issue concerned whether CRA reasonably refused Mr. Hart’s Canada Recovery Benefit (CRB) claim based on inconsistent income evidence for 2019 and 2020.
• Discrepancies among multiple T4 slips, tax reassessments, and the Record of Employment raised doubt about the existence and amount of the claimed employment income from the White Hart Pub.
• Absence of corroborating documents such as pay stubs, time sheets, cheques, bank statements, or work schedules undermined Mr. Hart’s ability to prove he met the $5,000 income threshold.
• Mr. Hart argued CRA was unfair and inconsistent in taxing his reported income while rejecting it for CRB eligibility, but the Court held tax assessments are not conclusive proof of income for benefit purposes.
• The Court found CRA had no duty to obtain Mr. Hart’s bank records or independently audit his employer; the onus remained on the applicant to provide documents under the Canada Recovery Benefits Act.
• Claims of procedural unfairness failed because Mr. Hart was informed of the concerns, given opportunities to respond, and received transparent written reasons explaining why his eligibility was denied.

Facts of the case

Mr. George Hart applied for and received the Canada Recovery Benefit (CRB) for several periods between September 27, 2020 and January 2, 2021 after claiming he lost his job at the White Hart Pub due to COVID-19 restrictions. He asserted that he had worked full-time as a bar manager, earning $26,850 in 2019 and additional income from January to March 2020. On that basis, he said he met the statutory threshold of at least $5,000 in income in 2019 or in the 12 months preceding his first CRB application, and that his employment ceased because of pandemic-related closures, leaving him unable to find other work.
The Canada Revenue Agency (CRA), acting for the Minister of Employment and Social Development, later conducted a validation review of his eligibility. In the first review, Mr. Hart submitted a letter from the White Hart Pub and Grill confirming his employment and an hourly wage of $18.65, along with a 2020 T4 showing earnings of $7,567.12. CRA concluded he had not proven at least $5,000 in income in 2019 and had not shown a 50% reduction in income.
Mr. Hart then provided additional material for a second review, including a 2019 T4 indicating $28,650 in earnings and a revised 2020 T4 showing $7,500 of income, along with handwritten notes explaining that his earlier tax filings were wrong. CRA again found him ineligible, adding that he was capable of working and had not shown that he looked for work during the benefit period. He commenced judicial review of that second review, but discontinued it when CRA agreed to have a different officer reassess his eligibility.

Administrative decisions and reviews

For the further second review before the new officer, Mr. Hart submitted more documentation: screenshots of his audition activity for acting work during the benefit period, emails and screenshots of auditions in 2019 and 2020, and a Record of Employment (ROE) from the White Hart Pub and Grill signed by his mother.
The officer reviewed the full record and focused on significant inconsistencies over time in Mr. Hart’s income reporting. For 2019, multiple reassessments showed widely varying figures for self-employment and employment income, and Mr. Hart admitted he had “estimated” his income and initially treated himself as self-employed because he worked in a family business. Only after later receiving a T4 did he request reassessment to reflect $26,850 in T4 employment income. For 2020, CRA had processed T4 earnings of $12,760 on the original assessment, but Mr. Hart later provided two different 2020 T4s, one for $7,567.12 and another for $7,500, and could not clearly explain the differences.
The officer also compared the employment letter from his mother, which described an hourly wage and a specific period of full-time work in early 2020, with the subsequently issued ROE, which gave a different employment period, indicated semi-monthly remuneration in 2019 and 2020, and reported total insurable earnings that did not align with the T4s. Mr. Hart suggested that some earnings were missing from the ROE and provided new salary-based calculations, but he had no independent documents—no pay stubs, timecards, schedules, cheques, or bank records—to substantiate those figures.
In light of these inconsistencies and the absence of corroborating documentation, the officer declined to accept that Mr. Hart had earned $26,850 in 2019 or $7,500–$7,567 in 2020 from the White Hart Pub, and concluded he had not demonstrated the income required to qualify for CRB during the claimed periods. That further second review decision, communicated in January 2024, is the decision Mr. Hart challenged in this Federal Court proceeding.

Legal framework and issues

The Court framed two central issues: first, whether the further second review decision was unreasonable; and second, whether Mr. Hart had been denied procedural fairness.
On the standard of review, the Court applied the reasonableness framework from Canada (Minister of Citizenship and Immigration) v Vavilov and Mason v Canada (Citizenship and Immigration). Under that framework, the Court does not reweigh evidence but examines whether the decision’s reasoning is internally coherent, responsive to the record, and consistent with the governing legal constraints. The onus is on the applicant to show that any flaws are serious enough to render the decision unreasonable.
For procedural fairness, the Court applied a correctness-like test focused on whether Mr. Hart knew the case he had to meet and had a full and fair chance to respond, taking into account the nature of his rights and the low procedural threshold typically associated with administrative benefit determinations.
In terms of the relevant “policy terms” or legal conditions, the Court looked primarily to the Canada Recovery Benefits Act. Eligibility for the CRB required, among other things, that a claimant show at least $5,000 of income from specified sources (employment or self-employment) in 2019, 2020, or the 12 months before the first application, and a qualifying reduction in employment or self-employment income due to COVID-19. These statutory criteria are non-discretionary: if the income and reduction requirements are not proved, the benefit cannot be granted.
Mr. Hart’s main legal theory was that CRA could not “have it both ways”: it had accepted and taxed his income in his 2019 and 2020 assessments and reassessments, so he said it was inconsistent and unfair for CRA to deny that same income when determining CRB eligibility. He also invoked an alleged CRA audit practice of ignoring discrepancies of less than $100 and argued that this should have led the officer to disregard small numerical differences in his documentation.

Court’s analysis on reasonableness

The Court held that the officer’s decision was reasonable, transparent, intelligible, and justified when read in light of the full record. A core concern for the officer was the “changing and inconsistent nature” of Mr. Hart’s income information for 2019 and 2020.
For 2019, Mr. Hart’s tax filings moved from an initial declaration of substantial self-employment income and a net loss, to later reassessments showing different levels of self-employment income, then finally to a combination of T4 employment earnings and self-employment income, before a still-later reassessment (after the decision) that was not part of the record before the officer. Mr. Hart admitted that his earlier returns were inaccurate, that he had misunderstood the distinction between employment and self-employment, and that he had estimated amounts without a T4. The officer was entitled to doubt the reliability of this evolving picture of his income.
For 2020, the Court noted the officer’s reliance on: two different T4 slips with slightly different amounts; the initial CRA assessment that had reflected higher T4 earnings than either T4 Mr. Hart later supplied; and Mr. Hart’s inability to provide a coherent explanation beyond saying he was confused and bad at mathematics. Again, the absence of underlying records—no pay records and no bank documentation—left the officer with inconsistent paperwork and weak explanations.
The Court further accepted the officer’s concerns about inconsistencies between the letter written by Mr. Hart’s mother (describing an hourly wage, specific start and end dates in 2020, and full-time hours) and the later ROE (which gave a longer employment period, semi-monthly remuneration, and insurable earnings that did not match the T4s). Mr. Hart could not reconcile these differences and said some earnings were missing from the ROE, but he had no independent evidence to substantiate that claim.
On Mr. Hart’s argument that small discrepancies should have been ignored under an alleged CRA policy of overlooking differences below $100, the Court made two key points. First, there was no evidence that such a tolerance, even if it existed for tax audit purposes, applied in the context of CRB eligibility reviews. Second, many of the inconsistencies in his file involved amounts well above $100 and went to structural contradictions (employed vs. self-employed, hourly vs. salaried, different employment periods), not just minor rounding differences.
The Court squarely rejected the contention that CRA was bound by Mr. Hart’s tax assessments for benefits purposes. Citing existing case law, the judge emphasized that income tax assessments are not conclusive proof that income was actually earned or that it was earned from an eligible source. They may be relevant evidence, but they can be reassessed, challenged, and corrected through separate processes and thus cannot be treated as irrefutable proof in a CRB file. Moreover, in administering CRB, CRA was not enforcing the Income Tax Act but was acting under the Canada Recovery Benefits Act, which has a different purpose and framework. The Court therefore found no legal inconsistency in CRA taxing income on one footing while insisting on stronger proof of that income for CRB eligibility.
Overall, the Court concluded there was no basis to interfere with the officer’s assessment of the sufficiency and reliability of Mr. Hart’s evidence. The officer was entitled to require additional documents and to find that, in their absence and given the contradictions in the record, the $5,000 income threshold and other statutory criteria were not met.

Court’s analysis on procedural fairness

On procedural fairness, the Court rejected the suggestion that CRA had any obligation to use its legal powers to obtain Mr. Hart’s bank records or to audit his employer for CRB purposes. While CRA may possess such tools in other contexts (for example, for enforcement of the Income Tax Act), that does not translate into a duty to deploy them in every benefits case. Under section 6 of the Canada Recovery Benefits Act, it was Mr. Hart’s responsibility to provide whatever documents the officer reasonably required to assess eligibility.
The Court found that Mr. Hart was repeatedly informed of the evidentiary concerns—such as discrepancies among his T4s, tax reassessments, and the ROE—and was given multiple opportunities to clarify and supplement the record. The detailed officer’s notes and decision letter explained why his explanations were not accepted and what gaps remained. This was sufficient to satisfy the relatively modest procedural requirements applicable in routine administrative decision-making about benefits.
Mr. Hart also argued that a CRA response to his service complaint suggested that an officer had been reprimanded, which he took as proof that policies and procedures had not been followed. The Court did not accept this. Whatever internal personnel or service matters may have occurred, the question before the Court was whether, on the record and reasons actually before it, the decision under review was procedurally fair. On that standard, the Court concluded that Mr. Hart knew the case he had to meet, was heard, and received clear reasons.

Outcome and implications

In the result, the Federal Court held that the CRA officer’s further second review decision was reasonable and that Mr. Hart had not been denied procedural fairness. The application for judicial review was dismissed, and the original finding that he was ineligible for CRB for the periods between September 27, 2020 and January 2, 2021 remained in force. Although the Attorney General of Canada, representing CRA, was the successful party, the Court exercised its discretion under the Federal Courts Rules to decline any costs award, noting that Mr. Hart had not unduly prolonged or complicated the proceeding and that similar CRB judicial review cases had proceeded on a no-costs basis. As a result, there was no damages award and no costs payable—effectively, the successful party obtained confirmation of the administrative decision, but the total monetary award in its favour was zero, and no separate amount can be identified beyond that non-monetary success.