Federal Court Declares CRA's CRB Decision Unreasonable

Date: 20260703 Docket: T-4552-25 Citation: 2026 FC 899 Toronto, Ontario, July 3, 2026 PRESENT: The Honourable Justice D’[NAME]: [NAME] Applicant and ATTORNEY GENERAL OF CANADA Respondent

REASONS AND

JUDGMENT I. Overview [ 1 ] This is an application for judicial review of a decision by a Canada Revenue Agency [[NAME]] officer [the Officer] dated October 7, 2025 [the Decision]. The Officer determined that the Applicant was ineligible for the Canada Recovery Benefit [CRB] because he did not have a 50% reduction in his average weekly income compared to the previous year due to COVID-19. [ 2 ] As explained in further detail below, this application for judicial review is allowed because the Decision is unreasonable.

II. Background A. The factual context [ 3 ] The Applicant applied for and received CRB in 2020 and 2021. The [NAME] elected to verify the Applicant’s eligibility for CRB and issued a notice to the Applicant dated May 6, 2024, requesting him to provide documentation supporting his eligibility for the benefit payments. The Applicant provided submissions on June 11, 2024, which included two records of employment. [ 4 ] By letter dated November 21, 2024, a [NAME] officer determined the Applicant ineligible for CRB because he quit his job voluntarily, was not working for reasons unrelated to COVID-19, and was able to work but did not look for a job. [ 5 ] By letter dated November 29, 2024, the Applicant requested a second review of his eligibility and provided written submissions and supporting documentation. The Applicant provided further documentation on September 15, 2025, and September 26, 2020. B. Decision under Review [ 6 ] By letter dated October 7, 2025, the Officer conveyed the Decision within the application for judicial review to the Applicant [the Decision Letter]. The Officer found that the Applicant was ineligible for the CRB because he did not have a 50% reduction in his average weekly income compared to the previous year due to COVID-19. [ 7 ] The Officer’s internal notes [Officer’s Notes] inform an understanding of the reasons for the Decision ( [NAME] v Canada (Attorney General) , 2022 FC 1670 at para 14; [NAME] v Canada (Attorney General) , 2022 FC 139 at para 2 ). [ 8 ] An entry from the Officer’s Notes, dated September 29, 2025, demonstrates that the Officer focused on the determination that the Applicant quit his job after September 27, 2020, when it was not appropriate to do so. The Officer acknowledged that the Applicant quit after his hours were reduced and began volunteering. The Officer concluded that it was not reasonable to quit prior to securing alternative work and instead begin volunteer work and also pursue an unpaid internship during the application period. [ 9 ] The Certified Tribunal Record [CTR] shows that on October 7, 2025, the date of the Decision, the Applicant provided the [NAME] further documentation, including his Notice of Assessment for the 2020 and 2021 taxation year. [ 10 ] On November 4, 2025, the Applicant filed a Notice of Application commencing this application for judicial review.

III. Legislative Framework [ 11 ] The legislative framework was summarized by Justice Ngo in [NAME] v Canada (Attorney General) , 2025 FC 497 at paragraphs 24 and 26:

24. The CRB was created under the Canada Recovery Benefits Act , SC 2020, c 12, s 2 [CRB Act]. Section 3 of the CRB Act sets out the eligibility requirements for the CRB. A person is eligible if, in the case of an application in respect of a two‑week period beginning in 2020, they had, for 2019 or in the 12‑month period preceding the day on which they make the application, a total income of at least $5,000 (paragraphs 3(1)(d) and (f) of the CRB Act). Furthermore, during the two‑week period covered by the benefit, for reasons related to COVID‑19, a self-employed person must have not been self‑employed or must have had a reduction of at least 50% in their work for the year or in the 12‑month period preceding the day on which they made the application. […]

26. The [Canada Emergency Response Benefit] and CRB were governmental measures of social and economic assistance, adopted to overcome the inherent limits of the employment insurance program in the unprecedented and difficult context created by the COVID‑19 pandemic ( [NAME] v Canada (Attorney General) , 2023 FC 1761 at para 38). [ 12 ] The eligibility criteria are non-discretionary such that [NAME] officials have no choice but to apply the eligibility criteria ( [NAME] v Canada (Attorney General) , 2022 FCA 187 [ [NAME] ] at paras 4, 7).

IV. Issues and Standard of Review [ 13 ] As a preliminary issue and on the Respondent’s request, the style of cause will be amended to reflect the proper responding party by removing Canada Revenue Agency and Office of the Commissioner ( Federal Courts Rules , SOR/98-106 [the Rules], r 303; [NAME] v Canada (Attorney General) , 2022 FC 139 at paras 13-14; [NAME] v Canada (Attorney General) , 2023 FC 21 at para 11). [ 14 ] The following issues are before the Court for determination: Has the Applicant submitted new evidence that is inadmissible on judicial review? Is the Decision reasonable? [ 15 ] Consistent with the parties’ submissions, the standard of reasonableness applies to reviewing the merits of the Decision ( Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 [ Vavilov ] at paras 16–17).

V. Analysis A. Has the Applicant submitted new evidence that is inadmissible on judicial review? [ 16 ] Consistent with the Respondent’s position, the general rule on judicial review is that the evidentiary record before the court is restricted to the evidence that was before the administrative decision-maker, subject to limited exceptions ( Universities and Colleges of Canada v [NAME] ([NAME]) , 2012 FCA 22 [ [NAME] ] at paras 19–20). [ 17 ] I accept the Respondent’s argument and will not consider the documents that were not before the Officer, which are identified at paragraph 47 of the Respondent’s Memorandum of Fact and Law: a) Screenshot of message from [NAME] dated October 10, 2020, in Tab A of the Applicant’s Affidavit; b) Copy of O. Reg. 51/20 – Closure of Establishments (Bars & Restaurants) in Tab B of the Applicant’s Affidavit; c) Statement dated January 21, 2025 in Tab C of the Applicant’s Affidavit; d) All emails in Tab D of the Applicant’s Affidavit; e) [COMPANY] paystub in Tab G of Applicant’s Affidavit; f) 2021 Notice of Assessment in Tab I of the Applicant’s Affidavit; g) 2020 Notice of Assessment in Tab I of the Applicant’s Affidavit. [ 18 ] The Applicant has not advanced any arguments that the exceptions apply to the documents identified. In his oral submissions, the Applicant articulated that it took him a longer time to collect some documentation. I conclude that no exception applies. B. Is the Decision reasonable? [ 19 ] The burden is on the Applicant to demonstrate that the decision is unreasonable through satisfying the reviewing court that the decision contains “sufficiently serious shortcomings in the decision such that it cannot be said to exhibit the requisite degree of justification, intelligibility and transparency” ( Vavilov at para 100). Flaws or shortcomings must amount to more than “a minor misstep” , or “superficial or peripheral to the merits of the decision” and instead, must be “central or significant” ( Vavilov at para 100). [ 20 ] In his oral submissions, the Applicant emphasized two main arguments to support his claim that the Decision is unreasonable. First, the Applicant argued that the Officer failed to consider his submissions and documentation regarding his employer substantively reducing his hours due to COVID-19 and, hence, the circumstances of his departure. The Applicant maintained that the Officer erred to conclude that he voluntarily left his job as the Record of Employment [ROE] reflects that he “quit” . Additionally, in his oral submissions in reply, the Applicant emphasized that the Officer failed to appreciate that he completed an internship in hopes of the internship leading to full-time employment after graduating from his educational program. Second, the Applicant argued that the Officer failed to calculate the 50% reduction requirement to the correct timeframes. [ 21 ] The Respondent conversely submits that the Decision is reasonable, and that the Applicant advanced arguments that disagree with the Officer’s findings of fact. The Respondent asserted that the Officer found that the Applicant did not meet the CRB income requirement, and that the Applicant voluntarily left his jobs on July 4, 2020, and November 7, 2020, without first securing alternative work. The Respondent therefore argued that the Decision has the hallmarks of reasonableness pursuant to Vavilov because it was not a valid reason for the Applicant to quit his job. [ 22 ] I accept the Applicant’s argument that the Officer failed to consider the Applicant’s explanation that he did not voluntarily quit his job contrary to the evidence in the ROE. The record before the Court fails to demonstrate that the Officer afforded any substantial or meaningful consideration to the Applicant’s central submission according to which he was forced to quit his job due to a significant decrease in available work hours which left him with no work ( Vavilov at paras 127–128). [ 23 ] Subparagraph 3(1)(k)(i) of the Canada Recovery Benefits Act , SC 2020, c 12, s 2 explicitly provides: 3 (1) A person is eligible for a Canada recovery benefit for any two-week period falling within the period beginning on September 27, 2020, and ending on October 23, 2021, if: 3 (1) Est admissible à la prestation canadienne de relance économique, à l’égard de toute période de deux semaines comprise dans la période commençant le 27 septembre 2020 et se terminant le 23 octobre 2021, la personne qui remplit les conditions suivantes : […] […] (k) if they have not previously received any benefits under this Part, they have not, k) si elle n’a pas reçu de prestation au titre de la présente partie précédemment, elle n’a pas : (i) on or after September 27, 2020, quit their employment or voluntarily ceased to work, unless it was reasonable to do so [Emphasis added] (i) d’une part, depuis le 27 septembre 2020, quitté son emploi ou cessé de travailler volontairement, sauf s’il était raisonnable de le faire , [Soulignement ajouté] [ 24 ] In [NAME] v Canada (Attorney General) , 2025 FC 1731 [ [NAME] ], the [NAME] officer determined that the applicant voluntarily reduced her working hours because the applicant’s second review request noted that she voluntarily reduced her working hours in order to help her parents, who did not live with her, with their living needs (at para 23). [ADDRESS] concluded that the decision was reasonable and recognized that subparagraph 3(1)(k)(i) is clear and specifies “that the work hours had to be reduced by the employer” ( [NAME] at para 24). Similarly, in [NAME] v Canada (Attorney General) , 2026 FC 856 [ [NAME] ], this Court concluded that it was reasonable for a [NAME] officer to determine an applicant who left his job out of fear of catching COVID-19 and a lack of available childcare options left his job voluntarily (at para 28). [ 25 ] The matter at hand is distinguished from [NAME] and [NAME] , as the Applicant’s work hours were substantially reduced by the employer in accordance with subparagraph 3(1)(k)(i). As the Officer’s Notes further demonstrate, the Officer acknowledged that the employer reduced the applicant’s hours s and was aware that the ROE should have been issued indicating “shortage of work,” rather than “quit.” The Officer’s conclusion that the Applicant voluntarily quit his employment is not intelligible or justified in light of the legal and factual constraints that bear on the Decision ( Vavilov at para 105). [ 26 ] Additionally, the Officer’s Notes demonstrate that the Officer concluded that it was not reasonable to quit a job in pursuit of unpaid work. However, the Applicant’s explanation to the [NAME] articulates that he chose to gain relevant experience in his field through an unpaid internship from May 17, 2021 to August 27, 2021, and the CTR contains a letter submitted to the [NAME] by the Applicant, dated May 4, 2021, which attests to the Applicant’s graduation from an [NAME] at [COMPANY] on April 16, 2021. In my view, the Officer’s conclusion does not meet the standard of justification required to be reasonable.

VI. Conclusion [ 27 ] As I have found the Decision unreasonable, the application for judicial review is allowed. [ 28 ] No costs will be awarded.

JUDGMENT in T-4552-25 THIS COURT’S

JUDGMENT is that : The style of cause is amended by removing Canada Revenue Agency and Office of the Commissioner as Respondents. This application for judicial review is allowed, the Decision is set aside, and the matter is returned to another decision-maker for redetermination. No costs are awarded. “[NAME]” Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-4552-25 STYLE OF CAUSE: [NAME] v ATTORNEY GENERAL OF CANADA PLACE OF HEARING: TORONTO, oNTARIO DATE OF HEARING: JUNE 29, 2026

REASONS and judgment: D’[NAME] J. DATED: JULY 3, 2026 APPEARANCES : [NAME] For The Applicant (SELF-REPRESENTED) [NAME] SOLICITORS OF RECORD : Attorney General of Canada Toronto, [NAME]