Self-Employed Individuals Can Receive EI Benefits With Limited Business Involvement

Citation: Canada Employment Insurance Commission  v  [NAME] , 2026  SST  356 Social Security Tribunal of Canada Appeal Division Decision Appellant: [redacted] Representative: [NAME] Respondent: [redacted] Decision under appeal: General Division December 22, 2025 (GE-25-3318) Tribunal member: [NAME] of hearing: Videoconference & In writing Hearing date: May 25, 2026 Hearing participants: Appellant’s representative Respondent Decision date: June 25, 2026 File number: AD-26-27 On this page Decision Overview Preliminary matters Issues Analysis Conclusion Decision [ 1 ] The Canada Employment Insurance Commission’s appeal is allowed. The General Division made a legal error because it didn’t apply binding case law. This appeal will go to the [NAME]. Overview [ 2 ] [NAME]. is the Claimant. He applied for Employment Insurance regular benefits. The Commission decided that he wasn’t entitled to get benefits because he was self-employed and operating a business, so they found that he was not “unemployed.” Footnote 1 The Claimant appealed that decision to the General Division. [ 3 ] The General Division allowed the Claimant’s appeal. It found that his level of involvement in his business was limited, so he wasn’t working full-work weeks. It concluded that he could get benefits because there were weeks he was unemployed. Footnote 2 [ 4 ] The Commission appealed to the Appeal Division arguing that the General Division made legal errors. Footnote 3 The Claimant argues that the General Division didn’t make any reviewable errors. Footnote 4 Preliminary matters The Appeal Division hearing was held by videoconference and in writing [ 5 ] The Appeal Division scheduled a videoconference hearing for May 25, 2026. Prior to the hearing, the Claimant asked to participate by teleconference and provided reasons for making that request. His request was granted based on his needs and circumstances. Footnote 5 [ 6 ] At the Appeal Division hearing, the Commission mentioned another Appeal Division decision that hadn’t been published by the Tribunal yet ( Canada Employment Insurance Commission  v  [NAME] , 2025  SST  1429). [ 7 ] The Claimant didn’t have a copy of the [NAME] decision, so he wasn’t able to respond to it at the hearing. He also asked for additional time to consider the remedy options if an error was found by the Appeal Division. Footnote 6 [ 8 ] To be fair, I decided to reconvene the hearing to another date, but it would be held in writing instead. The parties agreed with this approach. This ensures that the Claimant would get a chance to review and respond to the [NAME] decision and the remedy options. [ 9 ] Shortly after, I sent the parties a letter with the deadlines set out asking for a reply and a copy of the [NAME] decision. Footnote 7 The parties responded by the deadlines set out and I considered their arguments when I made this decision. Footnote 8 Issues [ 10 ] The issues in this appeal are: a) Did the General Division fail to follow binding case law from the Federal Court of Appeal, specifically [NAME]  v  Canada (Attorney General), 2004  FCA  61? b) Did the General Division fail to meaningfully engage with the evidence and analyze whether there were differences in the continuity of the business during the benefit period on a week-by-week basis? c) Did the General Division make a legal error and fail to provide adequate reasons? d) If so, how should the error or errors be fixed? Analysis [ 11 ] A legal error happens when the General Division misinterprets a law, doesn’t apply the correct law or doesn’t follow a court decision it has to follow. Inadequate reasons can also amount to a legal error. Footnote 9 If the General Division made a legal error, then I can intervene. Footnote 10 There are special considerations for people who are claiming benefits while self‑employed [ 12 ] If you are involved in a business, you may not be entitled to benefits. The law says that you can receive benefits for each week you are unemployed. Footnote 11 A week of unemployment means any week you don’t work a full work week. Footnote 12 Also, if you are self-employed, the law assumes that you work full-work weeks, so you can’t receive benefits. Footnote 13 [ 13 ] But there is an exception if your level of involvement in the business is limited. Footnote 14 The exception applies if the person’s level of involvement is so limited that they would not normally rely on that self-employment as their main means of earning a living. [ 14 ] To decide whether the exception applies, there are six factors to consider. Footnote 15 These factors include: the time spent the nature and amount of the capital and resources invested the financial success or failure of the employment or business the continuity of the employment or business the nature of the employment or business, and the person’s intention and willingness to seek and immediately accept alternate employment. The General Division decided that the Claimant wasn’t working full-work weeks, so he was unemployed [ 15 ] The Claimant was self-employed in an [NAME]. Footnote 16 This wasn’t disputed. [ 16 ] The General Division reviewed the six factors and made the following key findings: The time spent on his business didn’t show limited involvement because he was in the early stages of setting up his business. Footnote 17 The nature and amount of his investments show that there was limited involvement because the amount was low. Footnote 18 The business didn’t generate any income, which shows limited involvement. Footnote 19 The business wasn’t viable, so there wasn’t any continuity, which shows limited involvement. Footnote 20 There was no connection between the Claimant’s old job at a [NAME] and nature of the business that he was trying to run, which points to limited involvement. Footnote 21 As for his intention and willingness to seek and immediately accept alternate employment, it found he transitioned from monitoring available jobs to actively looking for work. And after registering the business, it noted that his job search was less active, looking for a part-time job versus when he decided the business wasn’t viable. So, it gave significant weight to the fact that he would have accepted a full-time job even while he was setting up his business. All of this points to limited involvement. Footnote 22 [ 17 ] The General Division highlighted that two factors are especially important: how much time you spend on the work and whether you intend to or want to find another job quickly, citing the [NAME] decision. Footnote 23 [ 18 ] Finally, the General Division allowed the appeal and concluded that the Claimant wasn’t working full-work weeks in his business, so he was unemployed. Footnote 24 The Commission says the General Division made legal errors in its decision [ 19 ] The Commission argues that the General Division made a few legal errors in its decision. Footnote 25 [ 20 ] First, the Commission argues the General Division made a legal error when it concluded that the Claimant’s intention and willingness to find another job quickly showed minimal involvement in self-employment. To support its position, it relies on the [NAME] decision, which says that a person is not considered unemployed by merely saying they are available to work and don’t undertake serious real steps to find work for themselves. Footnote 26 [ 21 ] The Commission points to the General Division’s finding that his job search was less active after registering his business than it was when he decided his business wasn’t viable, and his search for work initially focused on part-time employment. Footnote 27 [ 22 ] Second, the Commission argues that the General Division made another legal error because it was only looking at the Claimant’s current involvement in his business versus assessing it on a week-by-week basis. It submits there were differences in the amount of time spent, continuity of the business, and his intention and willingness to seek and accept employment at various times during the period in question. [ 23 ] To support its position on this issue, it relied on another Appeal Division decision called Canada Employment Insurance Commission  v  [NAME] , 2025  SST  1429. In the [NAME] decision, the Appeal Division found that it was a legal error for the General Division to not decide the person’s involvement in their business on a week-by-week basis. [ 24 ] Finally, the Commission argues that the General Division made a legal error by failing to fully explain how the Claimant’s changing willingness to seek alternative employment in each week affected whether his involvement was limited in each week throughout the benefit period. The Commission says that, as per binding case law, it was also a legal error for it not to explain itself fully. Footnote 28 The Claimant argues that the General Division didn’t make any reviewable errors [ 25 ] The Claimant argues that the Commission’s arguments amount to a request for reassessment of the record and reweighing the evidence rather than an identification of a reviewable error. Footnote 29 He maintains that the General Division correctly applied section 30 of the Employment Insurance Regulations and considered the six factors as part of an overall assessment and made findings on that basis. He says no single factor is determinative. [ 26 ] The Claimant says that the General Division expressly considered the time spent and acknowledged that it was more than minimal, while also weighing the remaining factors in context. He notes that while case law emphasizes the importance of the time and intention factor, it doesn’t convert those considerations into a determinative checklist. [ 27 ] The Claimant also says that the General Division examined his evidence regarding the exploratory stage of his business and found it likely that time and effort would be invested in exploring and starting up a business. He points out that it considered that his business didn’t become operational, generated no income, and was ultimately discontinued when it assessed the business continuity and financial success. [ 28 ] The Claimant argues that Canada Employment Insurance Commission  v  [NAME] is distinguishable from his cases because the General Division accounted for his changing circumstances when it assessed the factors. But that it considered those circumstances as part of its analysis and ultimately concluded that his involvement in the business remained limited overall. [ 29 ] Finally, the Claimant says that the issue isn’t whether the evidence could support a different conclusion, but it is whether the General Division made a reviewable error under section 58(1) of the Department of Employment and Social Development Act . And that the General Division’s reasons, read as a whole, disclose the path of its analysis. The General Division didn’t follow binding case law and didn’t explain why [ 30 ] The General Division correctly laid out the law in its decision and identified each of the six factors above. Footnote 30 It reviewed the evidence and made findings on each of the factors. It concluded that the Claimant’s involvement in his business was limited enough that the exception applied. As he wasn’t working full-work weeks, he was considered unemployed. Footnote 31 [ 31 ] The General Division cited the [NAME] decision, correctly stating that “how much time you spend on the work and whether you intend to or want to find another quickly are important factors to consider.” Footnote 32 [ 32 ] The Commission relies on the [NAME] decision at para. 9, which says: “Allow me to add, however, that not very far behind the "time" factor, in terms of importance, is the factor of "the claimant’s intention and willingness to seek and immediately accept alternate employment." As Marceau J. A. pointed out in  Jouan , "The Act is designed to provide temporary benefits to those who are unemployed and  actively seeking other work " (emphasis added). A claimant will not be considered unemployed if, all the while he is receiving payments, he merely says he is available to work and does not undertake serious, real steps to find work for himself.” [ 33 ] I find the General Division made a legal error by not following binding case law and didn’t explain why. Footnote 33 I agree that the General Division was free to weigh the factors as part of its overall assessment and that no one factor is determinative. But in doing so, it also had to consider what the [NAME] decision says about actively seeking other work and undertaking serious, real steps to find work, otherwise, you are not considered unemployed by merely saying you are available for work. [ 34 ] The evidence before the General Division indicates that the Claimant’s job seeking efforts at some points were less active. It found as fact that the Claimant’s job search transitioned from monitoring available jobs to actively looking for work. Footnote 34 It also found that his job search was less active after registering the business and he was focused on part-time employment. Footnote 35 [ 35 ] The General Division also noted in its decision that the Claimant didn’t provide specific details of his efforts to find another job other than to say he monitored job positions and always remained available. Footnote 36 [ 36 ] The General Division hearing was held in writing (at the Claimant’s request), so it didn’t explore in detail whether he was actively seeking other work and undertaking serious, real steps to find work during the relevant period. The General Division needed to show that it considered the proposition from [NAME] or explain why it wasn’t applicable. [ 37 ] I also agree with the rationale set out in the [NAME] decision from the Appeal Division. Footnote 37 The facts are similar in this case because the evidence shows there were differences in the amount of time spent on his business. The General Division needed to assess his self-employment on a week-by-week basis which means it had to consider whether there were differences between weeks during the benefit period. Fixing the error [ 38 ] There are two options for fixing errors made by the General Division. Footnote 38 I can either send the file to the Board of Appeal or give the decision that the General Division should have given. If I substitute with my own decision, I can make any necessary findings of fact. Footnote 39 [ 39 ] The Commission argues the matter should be sent to the [NAME] because there was some conflicting information in the appeal record around his job search activities. Footnote 40 [ 40 ] The Commission restated that the General Division held the hearing in writing, so the Claimant didn’t get an opportunity to testify about his job searching activities for the relevant period. It says that he ought to be given an opportunity to clarify any issues, as well as provide evidence to support his position. Footnote 41 [ 41 ] The Claimant argues that if the Appeal Division determines there is a legal error, then the appropriate remedy is to substitute with its own decision. He says the record is complete and there isn’t a need for additional evidence or factual findings. Footnote 42 The appeal will go to the Board of Appeal [ 42 ] I am sending this matter to the [NAME]. The record is not complete because there isn’t any specific detail about the Claimant’s job seeking efforts. This detail is important because the [NAME] decision says that a person has to actively seek other work and undertake serious, real steps to find work, otherwise they are not unemployed by merely saying they are available for work. And it has to be assessed on a week-by-week basis. [ 43 ] So, the Claimant hasn’t had a full and fair opportunity before the General Division and ought to be given that opportunity, as well as clarifying any conflicting information and submit new evidence. He will get that opportunity now because the appeal will go to the [NAME]. Conclusion [ 44 ] The Commission’s appeal is allowed. The General Division made a legal error. The matter will go to the [NAME]. Footnotes Footnote 1 See Commission’s initial and reconsideration decision at pages GD3-19 and GD3-27. Return to footnote 1 referrer Footnote 2 See General Division decision at pages AD1-9 to AD1-17. Return to footnote 2 referrer Footnote 3 See Commission’s arguments at pages AD1-1 to AD1-17; AD5-1 to AD5-15 and AD13-1 to AD13-2. Return to footnote 3 referrer Footnote 4 See Claimant’s arguments at pages AD8-1; AD10-1 to AD10-3 and AD12-1 to AD12-4. Return to footnote 4 referrer Footnote 5 See pages AD3-1 and AD4-1 to AD4-3. Also see, section 2(2) of the Social Security Tribunal Regulations . Return to footnote 5 referrer Footnote 6 See section 59(1) of the Department of Employment and Social Development Act ( DESD Act). Return to footnote 6 referrer Footnote 7 See pages AD11-1 to AD11-3. Return to footnote 7 referrer Footnote 8 See pages AD12-1 to AD12-4; AD13-1 to AD13-2; AD14-1 to AD14-3 and AD15-1. Return to footnote 8 referrer Footnote 9 [NAME]  v  Canada (Minister of Human Resources Development),  2002  FCA  292, at paragraph 6, citing  R  v  [NAME] , 2002  SCC  26. Return to footnote 9 referrer Footnote 10 See section 58(1)(b) of the DESD Act. Return to footnote 10 referrer Footnote 11 See section 9 of the  Employment Insurance Act  (Act). Return to footnote 11 referrer Footnote 12 See section 11 of the EI Act. Return to footnote 12 referrer Footnote 13 See section 30(1) of the  Employment Insurance Regulations  ( EI Regulations) and [NAME]   v   Canada , 2009  FCA  102. Return to footnote 13 referrer Footnote 14 See section 30(2) of the EI Regulations. It refers to a claimant being involved to “a minor extent” (in other words, their involvement is limited). Also see  [NAME]   v   Canada (Attorney General) , 2008  FCA  240. Return to footnote 14 referrer Footnote 15 See section 30(3) of the EI Regulations, which sets out these six factors. Return to footnote 15 referrer Footnote 16 See paragraph 3 of the General Division decision. Return to footnote 16 referrer Footnote 17 See paragraphs 14–21 of the General Division decision. Return to footnote 17 referrer Footnote 18 See paragraphs 22–26 of the General Division decision. Return to footnote 18 referrer Footnote 19 See paragraphs 27–29 of the General Division decision. Return to footnote 19 referrer Footnote 20 See paragraphs 30–33 of the General Division decision. Return to footnote 20 referrer Footnote 21 See paragraphs 34–35 of the General Division decision. Return to footnote 21 referrer Footnote 22 See paragraphs 36–43 of the General Division decision. Return to footnote 22 referrer Footnote 23 See paragraph 46 of the General Division decision. Return to footnote 23 referrer Footnote 24 See paragraphs 2 and 49 of the General Division decision. Return to footnote 24 referrer Footnote 25 See pages AD-1 to AD1-17, AD5-1 to AD5-15 and AD13-1 to AD13-2. Return to footnote 25 referrer Footnote 26 [NAME]  v  Canada (Attorney General), 2004  FCA  61, at paragraph 9. Return to footnote 26 referrer Footnote 27 See paragraphs 42–43 of the General Division decision. Return to footnote 27 referrer Footnote 28 See Canada (Minister of Citizenship and Immigration)  v  [NAME] , 2019  SCC  65. Return to footnote 28 referrer Footnote 29 See pages AD10-1 to AD10-3 and AD12-1 to AD12-4. Return to footnote 29 referrer Footnote 30 See paragraphs 7–13 of the General Division decision. Return to footnote 30 referrer Footnote 31 See paragraph 49 of the General Division decision. Return to footnote 31 referrer Footnote 32 See paragraph 46 of the General Division decision. Return to footnote 32 referrer Footnote 33 See section 58(1)(b) of the DESD Act. Return to footnote 33 referrer Footnote 34 See paragraph 36 of the General Division decision. Return to footnote 34 referrer Footnote 35 See paragraphs 42–43 of the General Division decision. Return to footnote 35 referrer Footnote 36 See paragraph 40 of the General Division decision. Return to footnote 36 referrer Footnote 37 See Canada Employment Insurance Commission  v  [NAME] , 2025  SST  1429, at paragraphs 14-34. Return to footnote 37 referrer Footnote 38 See section 54.5(1) of the DESD Act. Return to footnote 38 referrer Footnote 39 See section 64 of the  DESD  Act. Return to footnote 39 referrer Footnote 40 See pages GD5-8, GD3-24 and GD3-25. Return to footnote 40 referrer Footnote 41 See page AD5-8. Return to footnote 41 referrer Footnote 42 See page AD12-1 to AD12-4. Return to footnote 42 referrer