SST Denies Claimant’s Appeal on EI Penalty

OUTCOME: Refused

[TRANSLATION] Citation: VB  v  Canada Employment Insurance Commission , 2026  SST  242 Social Security Tribunal of Canada Appeal Division Leave to Appeal Decision Applicant: [redacted] Respondent: [redacted] Decision under appeal: [NAME] decision dated January 26, 2026 (GE-25-3075) Tribunal member: [NAME] date: March 25, 2026 File number: AD-26-135 On this page Decision Overview Issues I am not giving the Claimant permission to appeal Conclusion Decision [ 1 ] Permission to appeal is refused. The appeal won’t go ahead. Overview [ 2 ] The Claimant, [APPELLANT]., established a benefit period on September 24, 2023. Footnote 1 [ 3 ] On March 4, 2025, after an investigation, the Commission decided that it could not pay the Claimant Employment Insurance ( [NAME] ) regular benefits as of January 7, 2024. That was because he voluntarily stopped working for X on January 8, 2024, without good cause. Footnote 2 The Commission also decided that the Claimant was in a training course from February 12, 2024, to June 1, 2024. And so, he could not get [NAME]  benefits for that period because he wasn’t available for work. He reported only part of his income from X. The Commission said that he had to pay back the benefits he wasn’t entitled to. The Commission also decided to impose an $8,000 penalty because he made 11 false statements. It also issued a formal notice of violation afterwards because he already had a violation on file for a past benefit period. [ 4 ] The [APPELLANT] asked for that decision to be reconsidered. Footnote 3 [ 5 ] The Commission upheld its decision about him voluntarily leaving X. Footnote 4 It also upheld its decision about the [APPELLANT] not being available. But it changed the dates of the period when he wasn’t available. It decided that the Claimant wasn’t entitled to [NAME]  benefits from January 8, 2024, to June 19, 2024. It also upheld the penalty. [ 6 ] The [APPELLANT] appealed that decision to the [NAME]. Footnote 5 The [NAME] allowed his appeal in part. It decided the following: The [APPELLANT] didn’t voluntarily leave his job. Footnote 6 So, the [NAME] decided that he was available for work from January 8, 2024, to February 11, 2024. Footnote 7 The [APPELLANT] wasn’t available for work from February 12, 2024, to June 19, 2024, because he was in training during that period. Footnote 8 The wages the [APPELLANT] got from December 10 to 23, 2023, are earnings, and the Commission correctly allocated them. Footnote 9 The Commission didn’t use its discretion judicially when it imposed a penalty on the Claimant. So, the [NAME] reduced the penalty to $4,000 because of the mitigating circumstances on file. Footnote 10 The Commission didn’t use its discretion judicially when it issued the Claimant a notice of violation. So, the [NAME] removed the notice of violation. Footnote 11 [ 7 ] The Claimant is now asking for permission to appeal the [NAME] decision. In his application to the Appeal Division, he said that he wasn’t challenging the decision about the benefits he had to pay back. Footnote 12 He was happy that the [NAME] allowed his appeal on the issue of voluntary leaving and in part on the issue of him being available for work. He is disputing the penalty amount. [ 8 ] I understand that the Claimant might be facing financial hardship. But I can’t give permission to appeal for the reasons that follow. Issues [ 9 ] I have to decide the following issues: Is there an arguable case that the [NAME] made an error of law by not considering all of the mitigating circumstances on file when it decided the penalty amount? Is there an arguable case that the [NAME] made an error, other than the one the [APPELLANT] alleges, that would allow me to intervene? I am not giving the Claimant permission to appeal The legal test for giving permission to appeal [ 10 ] Permission to appeal has to be given for an appeal to be heard on the merits. Footnote 13 [ 11 ] I can only give permission to appeal if the [APPELLANT] raises arguable grounds that could allow him to succeed. Footnote 14 I have to refuse the application for permission to appeal if I am satisfied that the appeal has no reasonable chance of success Footnote 15 . A reasonable chance of success means that the [APPELLANT] could argue his case and possibly succeed. [ 12 ] The appeal has to relate to one of the grounds of appeal set out in the Department of Employment and Social Development Act . This means that I have to decide whether there is an arguable case that the [NAME] made one of the following errors: failed to follow the principles of procedural fairness made an error of jurisdiction made an error of law based its decision on an important error of fact Footnote 16 [ 13 ] So, I have to give permission to appeal if the [NAME] might have made one of these errors and if that error would give the Claimant’s appeal a reasonable chance of success. [ 14 ] To give my decision, I looked at the administrative file that was before the [NAME], listened to the hearing recording, read the [NAME] decision, and carefully reviewed the Claimant’s application to the Appeal Division. Footnote 17 There is no arguable case that the [NAME] made an error of law The legal test for intervening on the issue of a penalty [ 15 ] Section 38(1) of the Employment Insurance Act gives the Commission wide discretion to impose a penalty for statements that the claimant knew were false or misleading. Footnote 18 So, the Commission can decide to impose a penalty and set the amount. The [NAME]’s reasons for intervening on the issue of the penalty [ 16 ] The [NAME] can only change a decision the Commission gave on the issue of a penalty if the Commission didn’t use its discretion judicially—or properly. Footnote 19 When the Commission decides to impose a penalty, it has to act in good faith, consider all the relevant factors, and set aside those that aren’t. The [NAME] explained this legal test in its decision. Footnote 20 The [APPELLANT] isn’t saying that the [NAME] applied the wrong legal test. In fact, the [NAME] intervened in his favour, saying that the Commission didn’t act judicially. [ 17 ] The [NAME] said that the Commission didn’t set the penalty amount in a judicial way because it didn’t consider all of the relevant facts on file. The [NAME] agreed with the decision to impose a penalty. But it said that the Commission didn’t consider the following factors when it set the amount: The [APPELLANT] explanations showing that he didn’t make a false statement when he answered that he didn’t take training for the period between December 10, 2023, and February 3, 2024 The [APPELLANT] explanations that he didn’t make a false statement when he reported his earnings from December 10 to 23, 2023. He was only a few hundred dollars off the exact amounts. Footnote 21 The [APPELLANT] difficulties in paying back the amounts the Commission asked for Footnote 22 [ 18 ] The [NAME] said that the [APPELLANT] actually made statements that he knew were false. But considering the mitigating circumstances, the [NAME] cut the penalty in half, reducing it from $8,000 to $4,000. Footnote 23 [ 19 ] So, the [NAME] intervened in the [APPELLANT] favour by cutting in half the penalty that was imposed on him. The [APPELLANT] isn’t disputing that he made statements he knew were false [ 20 ] The [NAME] looked at the different statements the [APPELLANT] made that the Commission said were false or misleading. For some, the [NAME] decided that the [APPELLANT] didn’t knowingly make them. To set the penalty, I will focus on the [NAME]’s findings that are related to imposing the penalty. [ 21 ] The [NAME] decided that the [APPELLANT] knew he was making false or misleading statements when he said that he wasn’t in training and that he didn’t get or wasn’t going to get any money in his reports from February 4 to June 8, 2024. Footnote 24 The [NAME] found the following based on the evidence: The [APPELLANT] was in training from February 12 to June 19, 2024, to get a vocational studies certificate as a refrigerator technician. He was in training in person Monday to Friday, from 7:00 a.m. to 3:00 p.m. In total, the training was 630 hours of classes. He got $750 a week to take this training. Footnote 25 [ 22 ] At the hearing before the [NAME], the Claimant acknowledged that he made false statements when he said that he wasn’t in training when he was. Footnote 26 He isn’t disputing before the Appeal Division that he made statements he knew were false. There is no arguable case that the [NAME] didn’t consider the mitigating circumstances [ 23 ] The [APPELLANT] agrees that he should be penalized for his false statements. But he argues that he didn’t mean to act fraudulently. Footnote 27 He says the penalty is still too high. The [NAME] didn’t consider the following mitigating circumstances: He was going through a difficult financial period after his new baby was born. His partner was getting the minimum benefits under the [NAME] ([NAME]). He went back to school. He called Service Canada to say that he would pay back the amounts he got but wasn’t entitled to. He doesn’t know how he can pay back this amount. He is worried he might have to declare bankruptcy or make a consumer proposal. Footnote 28 [ 24 ] First, a penalty can be imposed even if there was no intent to defraud. Footnote 29 Second, there is no arguable case that the [NAME] didn’t consider the mitigating circumstances. [ 25 ] There is no arguable case that the [NAME] didn’t consider the [APPELLANT] testimony that he tried to correct his reports by calling Service Canada. Footnote 30 Before the [NAME], the Claimant testified that he called Service Canada to say that he would pay back the benefits he got but wasn’t entitled to while he was in training. Footnote 31 [ 26 ] The [NAME] considered this point. But it didn’t believe that the [APPELLANT] told Service Canada about his false statements on his own. The [NAME] decided that it was more likely that the [APPELLANT] called in March 2025 after he was asked to pay back the benefits he wasn’t entitled to. Footnote 32 So, the [NAME] found that this wasn’t a mitigating circumstance. It was open to the [NAME] to make this finding. Footnote 33 [ 27 ] There is no arguable case that the [NAME] didn’t consider the Claimant’s financial hardship as a mitigating circumstance. The [NAME] said that his difficulties in paying back the penalty were considered as a mitigating circumstance. Footnote 34 [ 28 ] As for the [APPELLANT] going back to school, there is no arguable case that this was a mitigating circumstance that the [NAME] had to consider. First, the Claimant didn’t argue before the [NAME] that, in his view, going back to school was a circumstance that should reduce the penalty. Second, a penalty is a deterrent to encourage claimants to make truthful statements. Footnote 35 The [APPELLANT] choosing to go back to school might be a great idea for him and his family. But because he didn’t report that he was going back to school—and because it is mainly due to the many false statements he made throughout his entire training period that he was paid benefits he wasn’t entitled to—there is no arguable ground to say that his choice to go back to school explains the wrongful act or justifies reducing the penalty. I can’t accept new evidence [ 29 ] I can’t criticize the [NAME] for not considering factors that weren’t raised before it. [ 30 ] In his application to the Appeal Division, the [APPELLANT] said that he was in financial need because he had a new baby. His wife had little income from the [NAME], and he was worried about having to declare bankruptcy. [ 31 ] The Claimant didn’t raise these factors before the [NAME]—not in writing or orally. I listened carefully to the [NAME] hearing recording. The [NAME] repeatedly asked the Claimant to say whether there were any mitigating circumstances that he wanted the Tribunal to consider. Footnote 36 But he didn’t say anything other than that it would be difficult to pay back the full amount being asked for. He also testified that he wasn’t about to declare bankruptcy. Footnote 37 So, I can’t criticize the [NAME] for not considering the new baby, his wife’s [NAME] income, or him worrying about having to declare bankruptcy. That is because this evidence wasn’t before the [NAME]. [ 32 ] The Appeal Division can’t consider new evidence that wasn’t before the [NAME] when it gave its decision, with some exceptions. So, the screenshot showing the Claimant’s debt rate on February 26, 2026, isn’t accepted as evidence. Footnote 38 It doesn’t fall under the exceptions allowing new evidence before the Appeal Division. Footnote 39 There is no arguable case that the [NAME] made an error that would allow me to intervene [ 33 ] The Federal Court doesn’t want the Appeal Division to review applications for permission to appeal in a mechanical way. Footnote 40 I carefully reviewed the file. But I see no arguable case that the [NAME] breached procedural fairness, went beyond or refused to use its jurisdiction, made an error of law, or based its decision on an important error of fact. [ 34 ] The [NAME] decision is thorough. It seems to have applied the correct legal tests, decided all the issues that were before it, and given the Claimant an opportunity to be heard in a fair and unbiased way. The Appeal Division’s role isn’t to weigh the evidence again when there are no arguable grounds that the [NAME] made an error. So, I can’t intervene and change the penalty amount as the Claimant would like. [ 35 ] I would like to tell the Claimant that he can contact the Canada Revenue Agency ( [NAME] ). It is responsible for collecting the [NAME]  overpayment and can set up payment arrangements. Footnote 41 [ 36 ] If he hasn’t already done so, he can also ask the Commission to write off the overpayment—that is, to cancel it. Footnote 42 Conclusion [ 37 ] Permission to appeal is refused. This means that the appeal won’t go ahead. Footnotes Footnote 1 See the overpayment explanation at GD3-101. Return to footnote 1 referrer Footnote 2 See the notice of decision at GD3-95. Return to footnote 2 referrer Footnote 3 See the reconsideration request at GD3-102. Return to footnote 3 referrer Footnote 4 See the notice of decision at GD3-110. Return to footnote 4 referrer Footnote 5 See the notice of appeal at GD2. Return to footnote 5 referrer Footnote 6 See the [NAME] decision at AD1A-2 at para 2. Return to footnote 6 referrer Footnote 7 See the [NAME] decision at AD1A-2 at para 3. Return to footnote 7 referrer Footnote 8 See the [NAME] decision at AD1A-2 at paras 4 and 58. Return to footnote 8 referrer Footnote 9 See the [NAME] decision at AD1A-2 at para 5. Return to footnote 9 referrer Footnote 10 See the [NAME] decision at AD1A-41 at para 191. Return to footnote 10 referrer Footnote 11 See the [NAME] decision at AD1A-42 at paras 202 and 203. Return to footnote 11 referrer Footnote 12 See the application to the Appeal Division at AD1-4. I note that the Claimant sent a copy of his application to the Appeal Division on March 24, 2026. See AD01B. Return to footnote 12 referrer Footnote 13 See section 56(1) of the Department of Employment and Social Development Act  ( [NAME]). Return to footnote 13 referrer Footnote 14 [NAME]  v  Canada ([NAME] [NAME]) , 2016  FC  115 at para 12. Return to footnote 14 referrer Footnote 15 See section 58(2) of the [NAME]. Return to footnote 15 referrer Footnote 16 See section 58(1) of the [NAME] . Return to footnote 16 referrer Footnote 17 See the application to the Appeal Division at AD1. Return to footnote 17 referrer Footnote 18 See the Federal Court decision [NAME]  v  Canada ([NAME] [NAME]) , 2020  FC  743 at para 38. It confirmed the Commission’s discretion to impose a penalty in cases of false or misleading statements. Return to footnote 18 referrer Footnote 19 See the [NAME] decision at AD1A-38 at para 76. Return to footnote 19 referrer Footnote 20 See the [NAME] decision at AD1A-38 at para 176. Return to footnote 20 referrer Footnote 21 See the [NAME] decision at AD1A-37 at para 168. Return to footnote 21 referrer Footnote 22 See the [NAME] decision at AD1A-41 at paras 187 and 188. Return to footnote 22 referrer Footnote 23 See the [NAME] decision at AD1A-41 at para 191. Return to footnote 23 referrer Footnote 24 See the [NAME] decision at AD1A-34 at para 162. Return to footnote 24 referrer Footnote 25 See the [NAME] decision at AD1A-17 at para 60. Listen to the [NAME] hearing recording at 25:00. Return to footnote 25 referrer Footnote 26 Listen to the [NAME] hearing recording at 36:00, 39:00, and 56:00. Return to footnote 26 referrer Footnote 27 See the application to the Appeal Division at AD1-4. Return to footnote 27 referrer Footnote 28 See the application to the Appeal Division at AD1-4. Return to footnote 28 referrer Footnote 29 See the Federal Court of Appeal decision Canada ([NAME] [NAME])  v  [NAME] , 2017  FCA  104 at para 14. Return to footnote 29 referrer Footnote 30 See the [NAME] decision at AD1A-41 at para 189. Return to footnote 30 referrer Footnote 31 Listen to the [NAME] hearing recording at 35:00 and 30:00. Return to footnote 31 referrer Footnote 32 See the [NAME] decision at AD1A-41 at para 190. Return to footnote 32 referrer Footnote 33 I note from the administrative file that Service Canada called the Claimant on February 20, 2025, at GD3-89. In that phone call, the Claimant acknowledged that he was in training and didn’t report it. The notes about that call don’t show that the Claimant voluntarily reported that he was in training before Service Canada asked him about it and investigated. Return to footnote 33 referrer Footnote 34 See the [NAME] decision at AD1A-41 at para 187. Return to footnote 34 referrer Footnote 35 See the Federal Court of Appeal decision Canada ([NAME] [NAME])  v  [NAME] , 2003  FCA  435 at para 17. Return to footnote 35 referrer Footnote 36 Listen to the [NAME] hearing recording at 1:04:30. Return to footnote 36 referrer Footnote 37 Listen to the [NAME] hearing recording at 1:03:35. Return to footnote 37 referrer Footnote 38 See the screenshot at AD1B-5. Return to footnote 38 referrer Footnote 39 The Appeal Division can exceptionally accept new evidence if, for example, the evidence is related to a breach of procedural fairness, consists of [NAME] information, or shows a complete lack of evidence. Return to footnote 39 referrer Footnote 40 [NAME]  v  Canada ([NAME] [NAME]) , 2016  FC  615 at para 10. Return to footnote 40 referrer Footnote 41 See the contact information listed on the notice of debt at GD3-115. Return to footnote 41 referrer Footnote 42 See section 56 of the Employment Insurance Regulations . Return to footnote 42 referrer