Federal Court Sets Aside CRA Decisions on Benefit Eligibility

OUTCOME: Allowed

Date: 20260526 Docket: T-347-24 Citation: 2026 FC 676 Ottawa, Ontario, May 26, 2026 PRESENT: The Honourable Mr. Justice Southcott BETWEEN: [APPELLANT] Applicant and ATTORNEY GENERAL OF CANADA Respondent

REASONS AND

JUDGMENT I. Overview [ 1 ] This is an application for judicial review of decisions by an officer [the Officer] of the Canadian Revenue Agency [[NAME]] dated January 22, 2024 [the Decisions], determining that the Applicant was ineligible for the Canada Emergency Response Benefit [CERB], the Canada Recovery Sickness Benefit [CRSB], or the Canada Recovery Benefit [CRB], because the Applicant did not earn at least $5000 in employment or self-employment income in any of the relevant periods prior to her applications for these [NAME] [collectively, the [NAME]]. [ 2 ] As explained in detail below, this application for judicial review is allowed, because the Decisions do not intelligibly explain the Officer’s conclusion that the invoices that the Applicant submitted to the [NAME], to demonstrate self-employment income exceeding the $5000 threshold, were insufficient to support the Applicant’s eligibility for the [NAME].

II. Background [ 1 ] The Applicant applied for and received payments for CERB for periods in 2020, CRSB for periods in 2021, and CRB for periods in 2021. By letter dated August 19, 2022, the [NAME] required the Applicant to provide documents confirming her eligibility for the payments. [ 2 ] In response, the Applicant submitted documentation intended to support her eligibility. However, by letters dated March 29, 2023, and April 3, 2023, a [NAME] officer conveyed to the Applicant decisions that she was ineligible for the [NAME] because she did not earn at least $5000 of employment or self-employment income in the relevant timeframe. [ 3 ] On April 20, 2023, the Applicant requested a second review of her eligibility for the [NAME], and she subsequently provided additional submissions. In these submissions, the Applicant explained that she began a [NAME] in 2019 but that her accountant did not include the income from that [NAME] when preparing her tax return for the 2020 taxation year. The Applicant included invoices that together totalled $5360 from January to March 2020, with handwritten notations thereon reflecting the invoices having been paid in cash. [ 4 ] On January 15, 2024, the Officer assigned to conduct the second review of the Applicant’s eligibility for the [NAME] spoke to her by telephone to make further inquiries about the documentation available to support her eligibility. For each of the [NAME], a document entitled Second Review Report, prepared by the Officer on January 17, 2024 [Second Review Report], summarizes the information that the Applicant provided in that conversation. The most comprehensive of those summaries is found in the Second Review Report for the CRB and reads as follows: [NAME] had a business of cleaning in 2020 but does not have a BN because that was a trial, just started the business. [NAME] was taking few jobs word to mouth and she got more referrals in end of 2019 she signed agreement with [COMPANY] for cleaning. [NAME] was being paid by cash because her business was new, she was issuing invoices. [NAME] did not deposited the money in the bank but spent it buying her stuffs. She worked in starting of the 2020 and stopped working in March 15, 2020 due to covid -19. Nobody were giving her jobs because of Covid-19. [NAME] does not have any supporting documents to submits for the invoices because the [COMPANY]'s died in 2021. [NAME] gloves, her business was as referral from [COMPANY], the business is closed and the owner of the sole proprietor and died in 2021. The owner did not have any body to run the business after. I asked [NAME] that her last invoices was in February 7th, 2020, did she quit her job, she said that she worked till march 2020 but she was not being paid. [NAME] mentioned that she does not have any receipts, or invoices. [NAME] about the invoices that she submitted 2 invoices number 103 and issued it to two different companies with different dates and amount. [NAME] explained that she was confused and does not have the invoices #103 Infront of her and it could be a mistake.[NAME] mentioned that she filed her taxes 2019 and 2020 correctly but did not included cleaning job in 2020. she did not know because her accountant did not advised her to report the amount [ 5 ] On January 22, 2024, the [NAME] issued letters conveying the Decisions denying the Applicant’s eligibility [the Decision Letters].

III. Decisions under Review [ 6 ] The Decision Letters state that the Applicant is not eligible for the [NAME] because she did not earn at least $5000 of employment or self-employment income in the relevant periods prior to her applications. [ 7 ] Each of the Second Review Reports (which inform an understanding of the reasons for the Decisions) includes a section entitled “Decision Explanation” that provides the following explanation for the Officer’s conclusion that the Applicant is ineligible for the relevant [NAME]: [NAME] has an employment income in 2019 $ 2, 854.81 and $938 in 2020. [NAME] submitted some invoices on 3/9/2023 and 3/5/2023 which were paid by cash $ 1660+1500+700+1500=5360 ; there are 2 invoices : invoices #103- February, 7th 2020 To [COMPANY] : $1500.00 paid Cash and issued s [NAME] [NAME] dated Jan 24, 2020 for $1,660 as well and Invoices 104: February, 7th 2020 To [COMPANY] : $1500.00 paid Cash; the same invoices 103 has been used twice for different company. As per our conversation on 2024-01-15. [NAME] said she had a confusion and asked to cancel because it was a mistake. [NAME] also confirmed that she does not deposited the $ 5360 in the bank and she does not have any other documents to proof the $ 5 k income requirement because the owner of [COMPANY] passed away. [NAME] has never reported any cleaning income in the past and she stated she does not deposited the amount in a bank account. Since she has never reported this income, she has no way of supporting this income, therefore it will be unable to validate the amount of $5360 due to insufficient documents. [NAME] is deemed ineligible […]

IV. Issues and Standard of Review [ 8 ] Taking into account the parties’ written and oral submissions, including procedural issues raised by the Respondent, this matter raises the following issues for the Court’s determination: What is the proper name of the Respondent? Has the Applicant submitted new evidence that is inadmissible on judicial review? Has the Applicant established that she was deprived of procedural fairness? Are the Decisions reasonable? [ 9 ] As reflected in the articulation of the final issue above, the merits of the Decisions are reviewable on the standard of reasonableness ( Canada (Minister of Citizenship and Immigration) v [NAME] , 2019 SCC 65 [ [NAME] ] at paras 16-17). [ 10 ] The correctness standard of review applies to the to procedural fairness issue ( Canadian Association of Refugee Lawyers v Canada (Immigration, Refugees and Citizenship) , 2020 FCA 196 at para 35). Put otherwise, the Court is required to assess whether the procedure followed was fair having regard to all the circumstances ( [COMPANY] v Canada (Attorney General) , 2018 FCA 69 at para 54). [ 11 ] I also note that the Decisions that the Applicant is challenging in this application are three separate decisions by the Officer, one in relation to each of the three categories of [NAME]. Rule 302 of the Federal Courts Rules, SOR/98-106 [the Rules], provides that, unless the Court otherwise orders, an application for judicial review shall be limited to a single order in respect of which relief is sought. The Respondent has not raised this as an issue. However, for the sake of good order, as the three Decisions are related and rely on essentially the same reasons, my Judgment will provide the relief required under Rule 302 ( [COMPANY] v Canada (Attorney General) , 2023 FCA 202 at para 47).

V. Analysis A. What is the proper name of the Respondent? [ 12 ] The Applicant’s Notice of Application [NOA], which commenced this application for judicial review, named as Respondents the following: “Canada Recovery Benefit, Canada Emergency Recovery Benefit, Canada Recovery Sickness Benefit, and [NAME] – Canada [NAME]” . [ 13 ] The Respondent’s counsel submits that the proper name of the Respondent is the “Attorney General of Canada” . While purely a procedural matter that has no impact on the merits or outcome of this application, the Respondent is correct in this submission (see Rule 303 of the Rules; [NAME] v Canada (Attorney General) , 2022 FC 139 at paras 13-14). My Judgment will therefore correct the name of the Respondent in the style of cause. B. Has the Applicant submitted new evidence that is inadmissible on judicial review? [ 14 ] The Respondent argues that, in considering the reasonableness of the Decision, the Court should disregard the following documents attached as exhibits to the Affidavit of the Applicant, sworn on March 28, 2024 [the Applicant’s Affidavit], and included in her Application Record in support of this application for judicial review [the Disputed Evidence]: a) [COMPANY] dated April 19, 2021 (labeled as Exhibit C); b) Letter from [NAME] to Applicant re the 2021 Income Tax and Benefit Return dated September 15, 2022 (labeled as Exhibit E); c) Letter from Applicant to [NAME] [APPELLANT]. [APPELLANT] received December 9, 2022 (labeled as Exhibit F); d) Letter from [NAME] to Applicant dated January 24, 2023 (labeled as Exhibit G); e) Illegible letter from Applicant to [NAME] received February 8, 2023 (labeled as Exhibit H); f) [NAME] of Collection for the Canada Recovery Sickness Benefit dated May 19, 2023 and dated August 21, 2023; and [NAME] of Account for COVID-19 [NAME] dated October 3, 2023 and December 5, 2023 (labeled as Exhibit K); g) Letter from Applicant to [NAME] (labeled as Exhibit L); and [sic] h) Statement of Account for COVID-19 [NAME] dated February 6, 2024 (labeled as Exhibit M); and i) 2020 Tax Return T1 Summary dated March 27, 2024 (labeled as Exhibit N). [ 15 ] In support of its position in this application, the Respondent has filed affidavits affirmed by the Officer on April 29, 2024, in which (among other things) the Officer states that they have reviewed the Applicant’s Affidavit and, in making the Decision, did not review the Disputed Evidence. Relying on those affidavits, the Respondent notes that, in reviewing the reasonableness of an administrative decision (and subject to exceptions that do not apply in the matter at hand), a court will typically consider only the evidence that was before the administrative decision-maker when the decision was made ( Association of Universities and Colleges of Canada v [NAME] ([NAME]) , 2012 FCA 22 at paras 19-20). [ 16 ] The Applicant has not provided submissions on this procedural issue. [ 17 ] I agree with the Respondent’s position and therefore will not consider the New Evidence in adjudicating this application for judicial review. C. Has the Applicant established that she was deprived of procedural fairness? [ 18 ] The Applicant asserts that the [NAME]’s review process, including phone calls from different agents and a lack of consistency, was very hard for her to navigate. She further asserts that she adhered to the [NAME]’s process and timelines and tried her best to produce the documents that the [NAME] requested. She submits that she was not afforded a fair opportunity for the [NAME] to review her case with all the supporting documentation that supported her eligibility for the [NAME]. [ 19 ] As the Respondent submits in response to this argument, procedural fairness concerns a party’s right to know the case against it and to be able to present its own case fairly and fully ( [NAME] at para 127 citing [NAME] v Canada (Minister of Citizenship and Immigration),  1999 CanLII 699 (SCC), [1999] 2 SCR 817 at para 28). I agree with the Respondent that, through the combination of written communications between the [NAME] and the Applicant and the telephone conversation between the Officer and the Applicant on January 15, 2024, details of which are found in the record before the Court, it is clear that the [NAME] advised the Applicant of the eligibility criteria she was obliged to meet and the sort of information and documentation that could assist her in meeting those criteria. I also agree with the Respondent that the Applicant was provided an opportunity to submit such information and documentation to the [NAME]. [ 20 ] I therefore find that the Applicant was provided a fair opportunity to know the case against her and to present her own case. [ 21 ] The Applicant also asserts that she was deprived of procedural fairness in that the Officer did not advise her to refile her tax return for the 2020 taxation year to claim the self-employment income that she asserts she earned in that year but had not originally claimed. In response to this argument, the Respondent submits that the Applicant bears the onus of establishing her entitlement to the [NAME] and that, as the Decisions did not turn on any adverse credibility findings, the Officer was not fixed with a procedural fairness obligation of the sort that the Applicant asserts. [ 22 ] As the Respondent’s position accurately reflects the law and the reasons for the Decisions in this matter, I find that the Applicant has not established that she was deprived of procedural fairness. D. Are the Decisions reasonable ? [ 23 ] The Applicant argues that she submitted to the Officer sufficient documentation to support her assertion that she earned over $5000 in the periods relevant to her eligibility for [NAME]. She submits that the Decisions are lacking intelligibility and therefore unreasonable, because the Officer has not articulated why the documents she submitted, and in particular the invoices for her self-employment work, were not sufficient evidence of her income from that work. [ 24 ] Referencing the Officer’s analyses in the Second Review Reports, the Respondent argues that the Decisions intelligibly explain the Officer’s conclusion that, due to insufficient documentation, the Applicant was not able to demonstrate that she met the $5000 minimum income requirements for the [NAME]. The Respondent emphasizes in particular that the invoices provided by the Applicant included two invoices bearing invoice number 103 for two different clients, that the Applicant had not previously reported performing any cleaning-related services in prior years, and that the Applicant had not reported the income from her [NAME] in her tax filing for the 2020 taxation year. The Respondent notes that an administrative decision-maker is entitled to base its decision on information supplied by the applicant and submits that the Decisions are reasonable. [ 25 ] While I appreciate that the information identified by the Respondent is set out in the Second Review Reports, I nevertheless have difficulty finding the Officer’s reasoning intelligible. In relation to the two invoices bearing the same number, the Officer notes the Applicant’s explanation that one of those documents was an error, and the record demonstrates that the Applicant provided a replacement invoice (numbered 104) for the second client. This sort of error or inconsistency, as well as the fact that the Applicant had not previously operated a [NAME] and did not report this income in her 2020 tax return filed in 2021, could support concern about the authenticity of the invoices. However, as the Respondent acknowledges, the Officer did not make any finding of this sort. [ 26 ] Taken at face value, the invoices are primary documents, evidencing transactions between the applicant and her customers, which support a conclusion that the Applicant received self-employment income totaling $5360, paid in cash, in the periods relevant to her eligibility for the [NAME]. In the absence of an adverse credibility finding, it is difficult to understand how the invoices do not represent sufficient evidence of that income. I note that, in the Second Review Reports, before concluding that it was not possible to validate the Applicant’s income due to insufficient documentation, the Officer referenced the Applicant’s statement that she had not deposited her cash earnings in a bank account. However, similar to the reasoning in [NAME] v Canada (Attorney General) , 2022 FC 1670, I find that, without an adverse credibility determination, the absence of corroborative bank statements, in the context of a cash business in which the evidence is that the earnings were not deposited in a bank account, does not represent an intelligible reason to conclude that invoices are not sufficient evidence of income (at para 15). [ 27 ] At the hearing of this application, the Respondent argued that the record before the Officer demonstrated the Applicant providing inconsistent explanations for failing to declare her self-employment income when she initially filed her tax return for the 2020 taxation year. The Respondent also argued that, although the Applicant explained to the Officer that she was unable to obtain supporting evidence from her client ([NAME]) because the principal had passed away, she did not provide any similar explanation in relation to a second client ([NAME]) to which one of her invoices had been sent. However, the Respondent has not identified any analysis of this sort by the Officer in the Second Review Report or elsewhere in the record that would justify the Court relying on such an analysis to support the intelligibility of the Decisions. [ 28 ] I therefore find that the Decisions do not meet the standards of justification, transparency, and intelligibility that [NAME] requires of a reasonable decision.

VI. Conclusion and Costs [ 29 ] Based on the above conclusion that the Decisions are unreasonable, my Judgment will allow this application for judicial review and grant relief materially in the form claimed in the Applicant’s NOA. My Judgment will set aside the Decisions and refer this matter back to the [NAME] for redetermination by a different officer in accordance with the Court’s Reasons. [ 30 ] Neither party has claimed costs of this application, and none are awarded.

JUDGMENT in T-347-24 THIS COURT’S

JUDGMENT is that: This application is allowed, the Decisions are set aside, and this matter is referred back to the [NAME] for redetermination by a different officer in accordance with the Court’s Reasons. The Applicant is permitted to challenge the three Decisions in this single application. The style of cause in this application is amended to change the name of the Respondent to the “ATTORNEY GENERAL OF CANADA” . No costs are awarded. "Richard F. Southcott" Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-347-24 STYLE OF CAUSE: [APPELLANT] v ATTORNEY GENERAL OF CANADA PLACE OF HEARING: Toronto, Ontario DATE OF HEARING: May 19, 2026

REASONS AND

JUDGMENT: SOUTHCOTT J. DATED: may 26, 2026 APPEARANCES : [APPELLANT] [NAME] (ON THEIR [APPELLANT]) [APPELLANT] FOR THE RESPONDENT SOLICITORS OF RECORD : Attorney General of Canada Toronto, Ontario FOR THE RESPONDENT