Executive Summary: Key Legal and Evidentiary Issues

• The applicant challenged a Canada Revenue Agency (CRA) decision denying her COVID-19 recovery benefit (PCRE) due to insufficient net income.

• At issue was whether gross or net income should be used to determine PCRE eligibility for self-employed individuals.

• The Court applied the reasonableness standard under the Vavilov framework to evaluate the CRA’s decision.

• Evidence submitted after the CRA’s final decision, including an amended 2019 tax return, was deemed inadmissible.

• The applicant argued that government communications were unclear about the income threshold, but the law was found to be unambiguous.

• The application for judicial review was dismissed with no costs awarded, despite the Attorney General’s request.

Facts and outcome of the case

Andrée Foisy, a self-employed lawyer since 1975, applied for and received the Canada Recovery Benefit (PCRE) during the COVID-19 pandemic for specific periods in late 2020 and early 2021. In 2023, the CRA conducted a review of her eligibility and concluded that she did not meet the $5,000 income threshold required under the Canada Recovery Benefits Act (LPCRE). The CRA determined that she had not earned $5,000 in either net employment income or net self-employment income in the relevant timeframes (2019, 2020, or the 12 months before her first claim).

Foisy contested the CRA’s interpretation and asserted that the agency should have considered her gross income rather than her net income. She also submitted additional documents during the judicial review process, including an amended tax return, in an attempt to prove eligibility retroactively. The Court, however, ruled that these documents were inadmissible because they were not part of the original record before the CRA’s decision-maker.

Justice Ngo confirmed that the statutory language under the LPCRE requires net income (i.e., income after deducting expenses) for self-employed individuals, as clarified by section 3(2) of the legislation. Previous Federal Court decisions were cited to support this interpretation, emphasizing that neither the CRA nor the Court could disregard or reinterpret this explicit legislative requirement.

The Court rejected Foisy's argument that the law was ambiguous due to differences in wording between the English and French versions of the eligibility criteria. It held that the legislation clearly required a minimum net income of $5,000, and that the CRA's decision was reasonable, coherent, and justified under administrative law principles.

In conclusion, the Federal Court dismissed Foisy’s application for judicial review, affirming that the CRA acted within the legal framework and that its decision was reasonable. Although the respondent (Attorney General of Canada) sought costs, the Court exercised its discretion under Rule 400 of the Federal Courts Rules and chose not to award any.