Executive Summary: Key Legal and Evidentiary Issues

• Judicial review focused on the reasonableness of CRA’s denial of COVID-19 relief benefits (PCRE).

• Dispute centered on whether amended income filings accurately reflected the applicant’s financial situation.

• CRA rejected modified 2019 and 2020 income figures as being tailored solely to meet PCRE thresholds.

• The applicant failed to provide sufficient documentary support, especially for 2020 revisions.

• Court evaluated whether procedural fairness obligations were met during the CRA’s review process.

• Ultimately, the Court upheld CRA’s decision and dismissed the judicial review without costs.

Facts and outcome of the case

Background of the dispute

Said Zouita applied for the Canada Recovery Benefit (PCRE), claiming eligibility based on self-employment income earned while driving for Uber Canada. The PCRE, under the Loi sur les prestations canadiennes de relance économique (LPCRE), required applicants to show at least $5,000 in gross employment or self-employment income in either 2019, 2020, or the twelve months prior to applying. Initially, Mr. Zouita's tax returns for 2019 and 2020 did not support this threshold, prompting the CRA to reject his application on multiple occasions.

To remedy this, Mr. Zouita filed amended tax returns that increased his net income by reducing vehicle-related deductions and removing the capital cost allowance (CCA) for his car. He claimed these amendments were corrections of accounting errors made by his former accountant. The CRA remained unconvinced, asserting that the changes were made solely to qualify for the PCRE, rather than reflecting his actual financial reality. Despite several opportunities to submit supporting documents, particularly for 2020, Mr. Zouita failed to provide adequate proof for his claimed adjustments.

Judicial review before the Federal Court

Following several administrative rejections, Mr. Zouita pursued a judicial review of the CRA’s most recent decision, dated May 24, 2024. The Federal Court, presided over by Justice Saint-Fleur, analyzed whether the CRA’s decision was reasonable and whether procedural fairness had been respected throughout the process.

The Court found the CRA's approach reasonable and grounded in the evidence. The agency’s skepticism toward the sudden income adjustments—particularly the unexplained removal of CCA and insufficient 2020 documentation—was justified. While Mr. Zouita had the right to amend his returns, the CRA was not obligated to accept those amendments uncritically if they seemed artificial or unsupported.

Additionally, the Court concluded that the applicant had been granted several chances to provide the necessary documentation and that the CRA’s conduct met the standards of procedural fairness. Communications and deadline extensions had been documented, including multiple outreach attempts to both Mr. Zouita and his accountant.

Outcome of the decision

Justice Saint-Fleur dismissed the application for judicial review, ruling that the CRA's decision met the standards of reasonableness under the Vavilov framework. No costs or damages were awarded. While the Attorney General had requested costs, the Court declined to grant them, noting the applicant’s self-represented status and exercising its discretion accordingly.