Executive Summary: Key Legal and Evidentiary Issues

• Phonna Puy challenged a CRA second review decision confirming her ineligibility for the Canada Emergency Response Benefit (CERB), with the CRA seeking repayment of amounts paid.

• Application of the reasonableness standard of review under Vavilov required the Court to assess the CRA officer's decision rather than re-evaluate eligibility independently.

• New evidence filed by the applicant (Exhibits 2, 3, 7, 9, 15, and 16) was deemed inadmissible because it was not before the administrative decision-maker at the time of the second review.

• The respondent raised preliminary objections regarding timeliness of the application and the introduction of a purportedly new argument about the increased repayment amount, though the Court found the latter was not truly a new argument.

• Evidence before the CRA officer indicated the applicant's work stoppage was due to diabetes rather than COVID-19, failing to satisfy the mandatory eligibility criterion under paragraph 6(1)(a) of the Canada Emergency Response Benefit Act.

• Repayment demanded escalated from $986.02 (notice of May 30, 2023) to $8,033.23 (notice of January 14, 2025) after the second review expanded ineligibility from periods 3 and 6 to periods 3 through 6, consistent with the principle that a second review supersedes the first.

Background and facts of the case

Phonna Puy, a self-represented litigant, applied for and received the Canada Emergency Response Benefit (CERB) for periods 3 to 6, covering May 10, 2020, to August 19, 2020. The payments were disbursed without the CRA conducting a prior verification of her eligibility, which was the practice with CERB applications at the time. Ms. Puy had been on leave from work from May 2020 until December 2020 due to her diabetes. She had not applied for Employment Insurance after her leave, but had applied for the CERB directly. Her pay stub showed a "D00" notation, which stands for "illness or injury."

The CRA review process

In 2022, the CRA issued a notice requesting repayment of an overpayment of the CERB. After requesting and receiving an explanation of the notice in writing, Ms. Puy called the CRA to dispute the request. Following this call, the CRA began an initial review of her CERB payments. The CRA asked her to provide pay stubs and other documents to verify her eligibility, which she did. On January 10, 2024, the CRA informed her that, following the initial review, she was ineligible for periods 3 and 6. She contacted the CRA because she disagreed with this decision, and the agent she spoke with explained the process for contesting the initial review and initiated a second review. During the second review, a CRA agent contacted her by telephone, during which she explained that she had stopped working due to diabetes. The officer's notes from their conversation on November 6, 2024 reflected this. On November 13, 2024, the CRA informed her that she was not eligible for the CERB, now for periods 3 to 6 — expanding the scope of ineligibility beyond the first review. The CRA then sent her a repayment request on January 14, 2025, this time for a higher amount. As stated in the applicant's factum, the repayment demanded increased from $986.02 (notice of May 30, 2023) to $8,033.23 (notice of January 14, 2025).

The judicial review application and preliminary objections

Ms. Puy filed a judicial review application before the Federal Court challenging the second review decision. The respondent, the Attorney General of Canada, raised two preliminary objections: first, that the applicant filed her notice of application more than 30 days after the decision under review was rendered, namely the CRA decision of November 13, 2024, citing section 18(2) of the Federal Courts Act, RSC 1985, c F-7; and second, that the applicant introduced a new argument in her factum that was not in the application for review, specifically regarding the unexplained increase in the repayment amount. The Court, presided by the Honourable Judge Ngo, found that this argument was not truly new, as the plaintiff had raised her concern about the increased amounts in her statement of facts and law, and the defendant had addressed this issue in his written submissions and at the hearing without being taken by surprise. The timeliness objection was linked to the merits and addressed accordingly.

The applicable legal framework

The Court applied the reasonableness standard of review as established in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65. Under this standard, the Court does not seek to determine what decision it would have made in the place of the administrative decision-maker, nor does it undertake a new analysis or determine the correct solution to the problem. The reviewing court cannot re-evaluate and weigh the evidence considered by the decision-maker to arrive at a different conclusion. The legal context applicable to the decision-maker is found in the Canada Emergency Response Benefit Act, namely section 8 of the COVID-19 Emergency Measures Act, SC 2020, c 5. The eligibility criterion at issue — that a person must have stopped working or had their hours reduced "because of COVID-19" — is set out in paragraph 6(1)(a) of the Act and is not discretionary. The Court also noted that, as a general rule, documents and information not available to the administrative decision-maker are inadmissible in judicial review, following University of Canada v. Canadian Copyright Licensing Agency (Access Copyright), 2012 CAF 22. Additionally, the Court recognized that a second CRA review is intended to be independent, is always conducted by an officer who did not participate in the first review, and that the decision of the first review is superseded by the second review, as established in Fang v. Canada (Attorney General), 2024 FC 1399.

The Court's analysis and ruling

The central issue was whether the CRA officer's conclusion — that Ms. Puy's work stoppage was not due to a cause related to COVID-19 — was reasonable. The evidence before the officer included Ms. Puy's own confirmation that she had stopped working due to diabetes and a pay stub identifying the absence as due to illness. Based on this information, the officer was entitled to conclude that the work stoppage was not due to a cause related to COVID-19. Although Ms. Puy stated at the hearing that she had contracted COVID-19 twice and was still suffering from its after-effects, and that she became ill with COVID-19 at the same time as she was unable to work, there was nothing in the file before the officer to support the claim that she had stopped working in May 2020 due to a combination of her diabetes and COVID-19. The Court expressed understanding of Ms. Puy's circumstances and the frustration she conveyed at the hearing, as well as her arguments that there was a great deal of confusion about the CERB eligibility criteria, that she applied in good faith, that she believed she was eligible, and that she was at work and distracted when the second review officer called her. However, the Court could not conclude that the officer committed a reviewable error. The application for judicial review was dismissed without costs, with the Attorney General of Canada as the successful party. No costs were awarded, as the defendant did not claim costs and the Court agreed there was no basis for awarding them. The CRA's demand for repayment of $8,033.23 stands as a consequence of the second review decision being upheld.