Executive Summary: Key legal and evidentiary issues

• Mr. Ebada was denied the Canada Recovery Benefit (CRB) for failing to meet the minimum $5,000 income threshold in employment and/or net self-employment income as required under the Canada Recovery Benefits Act.

• Evidence submitted by the appellant primarily reflected income earned by his incorporated company, Ebada Contractors Inc., rather than his personal employment or self-employment income.

• A notice of reassessment for 2020 showing an increase in income from $4,607 to $7,607 was raised by the appellant, who argued the CRA failed to account for it in reaching its decision.

• The appellant incorrectly argued that the Act permits "detailed business invoices" and "business financial statements" as acceptable proof of self-employment income — the Court confirmed the Act states no such thing.

• Reasonableness review was the applicable standard, requiring the Court to defer to the CRA's assessment of the evidence absent a demonstrated mistake on a key point.

• Disagreement with an administrative decision does not, in itself, render that decision unreasonable under Canadian administrative law principles.

The facts of the case

Elsaeed Farahat Ebada, who operated an incorporated business called Ebada Contractors Inc., applied for the Canada Recovery Benefit (CRB) under the Canada Recovery Benefits Act, SC 2020, c. 12, s. 2. To qualify, applicants were required to have earned at least $5,000 in employment and/or net self-employment income in 2019, 2020, or in the 12 months prior to the date of their application. Following a second review of Mr. Ebada's file, a manager with the Canada Revenue Agency (CRA) concluded that he was not eligible for the benefit because he had not met this statutory income threshold.

Mr. Ebada's arguments and the evidence at issue

Mr. Ebada challenged the CRA's decision, arguing that the agency unreasonably failed to account for the income earned by his business, Ebada Contractors Inc. He submitted that his corporation was his alone, and that the CRA ought to have concluded that the detailed invoices and the financial statement from his incorporated company prove his self-employment income. He also pointed to a notice of reassessment for the year 2020 showing an increase in income from $4,607 to $7,607. He further contended that the CRA should not have considered his personal tax returns and notices of assessment (prior to the reassessment) when coming to its decision. Additionally, Mr. Ebada pleaded that the Canada Recovery Benefits Act itself states that both "detailed business invoices" and "business financial statements" are acceptable proof of self-employment income. The Court found, however, that the Act states no such thing, and that the language of the CRA letter dated February 9, 2023, did not allow Mr. Ebada to rely on the statement of account from Ebada Contractors Inc. as conclusive evidence of his self-employment income.

The Federal Court's decision

The Federal Court, in a judgment dated October 1, 2024 (reported as 2024 FC 1539), dismissed Mr. Ebada's application for judicial review. It found that the CRA's decision was reasonable given the limited information provided and that said information related predominantly to Mr. Ebada's company as opposed to his personal income. The Federal Court concluded that it was open to the CRA to conclude that the documents provided by Mr. Ebada were insufficient to establish that he had met the CRB statutory income requirement.

The standard of review and the Federal Court of Appeal's analysis

On appeal, the Federal Court of Appeal, sitting as a panel of Justices Rennie, Laskin, and Rochester, was required to step into the shoes of the Federal Court and draw its own conclusions, performing a de novo review of the administrative decision, as established in Northern Regional Health Authority v. Horrocks, 2021 SCC 42 at para. 10, and Safe Food Matters Inc. v. Canada (Attorney General), 2022 FCA 19 at para. 14. The issue was whether the CRA's decision dated February 5, 2024, was reasonable, as outlined in Lajoie v. Canada (Attorney General), 2022 FC 1088 at para. 12. Under the reasonableness standard set out in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 at para. 85, a reasonable decision must be justified in relation to the facts and the law that constrain the decision maker. The Court must defer to the decision-maker's assessment of the evidence unless an applicant can show a mistake on a key point, as stated in You v. Canada (Attorney General), 2025 FCA 44 at para. 6, and it is not the Court's role to reweigh or reassess the evidence or to substitute its own findings for those of the decision-maker (Vavilov at para. 125).

The ruling and outcome

The Federal Court of Appeal was not persuaded that the CRA's decision was unreasonable or that the Federal Court committed a reviewable error in dismissing the judicial review. It was reasonable for the CRA to find, based on the record before it, that Mr. Ebada's personal income, as opposed to the income of his company, had not met the $5,000 income requirement. Justice Rochester, delivering the reasons from the bench on March 4, 2026, noted that while it is clear Mr. Ebada disagrees with the CRA's decision and feels that he has suffered an injustice, disagreeing with a decision is not the same as a decision being unreasonable. What Mr. Ebada was asking the Court to do was to reassess the evidence and come to a different conclusion — something the Court cannot do when conducting a reasonableness review. The appeal was dismissed without costs, with the Attorney General of Canada as the successful party. No specific monetary amount was awarded or ordered, as the matter concerned the denial of CRB eligibility rather than a damages claim.