Executive Summary: Key Legal and Evidentiary Issues

• Eligibility for the Canada Recovery Benefit hinged on whether Mr. Paus had at least $5,000 in qualifying income for 2019, 2020, or the 12 months before applying.

• Whether a CRA notice of reassessment based on self-reported income legally binds CRA when it later assesses pandemic-benefit eligibility was the central legal question.

• The applicant's "double standard" argument - that CRA used his revised employment income to collect tax but not to grant the benefit - required the Court to consider the evidentiary weight of self-reported returns.

• Sufficiency of the supporting evidence, mainly bank statements with handwritten annotations and amended returns lacking T4 slips, was disputed.

• Admissibility of new evidence in the spouse's affidavit, filed for the first time on judicial review, raised a preliminary evidentiary issue.

• Reasonableness under Vavilov governed the standard of review, limiting the Court to a supervisory rather than redetermining role.

Facts of the case

Richard Paus, a self-represented truck driver, received the Canada Recovery Benefit (CRB) for payment periods running from September 27, 2020 to October 9, 2021. His original tax filings reported net self-employment income of $4,724.10 for 2019 and $1,606.67 for 2020 - both below the $5,000 threshold needed to qualify. After CRA requested supporting documents in March 2023 and conducted a first review, it found him ineligible by decision dated January 15, 2024. Mr. Paus requested a second review in June 2024, asserting that his wife had mistakenly filed his returns as self-employed when he was in fact working as an independent contractor for trucking companies. In phone calls on June 18 and 24, 2024, he explained that he had only a verbal contract, covered his own expenses, and wished to remove the deductions he had originally claimed. On June 25, 2024, he filed amended returns reporting employment earnings of $11,455.17 (2019) and $5,250.13 (2020), and CRA reassessed those amended returns on August 26, 2024. CRA nonetheless issued a Second Review Decision on June 23, 2025, again finding him ineligible for the same reason - he had not shown at least $5,000 of qualifying income. Mr. Paus then sought judicial review, asking the Federal Court to set the decision aside.

Statutory provisions at issue

The Canada Recovery Benefits Act, SC 2020, c 12, established the CRB, with eligibility requirements set out principally in sections 3 and 4. To qualify for the benefits claimed, a person must have had total income of at least $5,000 from the sources specified in the legislation for 2019, 2020, or the 12-month period before the date of application, and the onus rests on the recipient to prove eligibility. A key point of law was that a notice of assessment or reassessment, issued without an audit, reflects tax payable calculated on the taxpayer's own representations and does not independently confirm the factual accuracy of the reported income.

The court's reasoning and analysis

The Court first addressed a preliminary issue: an affidavit from the applicant's spouse, Janette Paus, attaching the revised 2020 return, the notice of reassessment, and proof of payment. Because this material went to the merits and largely duplicated what was already before the officer, the Court held that nothing turned on its admissibility. On the merits, applying the deferential reasonableness standard from Vavilov, the Court rejected the "double standard" argument, explaining that self-reported tax returns are neither determinative nor conclusive proof of income, and that CRA was not legally bound to accept the re-characterized employment income in the amended 2020 return simply because it had issued a reassessment - there being no audit or substantive verification in the record. The Court also declined to reweigh the evidence, noting the officer's detailed case notes showed careful consideration of the bank statements and handwritten annotations. For 2019, deposits annotated "George," "Bullet," and "JD Trucking" summed to $11,455.17, but several were ambiguous cash or ABM deposits with no supporting context; the 2020 entries were similarly vague. The officer reasonably declined to treat circled deposits as conclusive proof of employment income and relied on the original self-employment figures of $4,724 (2019) and $1,606 (2020). The Court found the officer neither ignored nor misapprehended the evidence, and that the conclusion was internally coherent and justified.

Ruling and outcome

The Federal Court concluded that CRA's Second Review Decision contained no reviewable error and dismissed the application for judicial review, while amending the style of cause to name the Attorney General of Canada as the proper Respondent. The successful party was the Attorney General of Canada. No money was awarded or ordered in anyone's favour: the Court made no costs order, as the Respondent did not request costs.