Docket: T-288-24
Citation: 2024 FC 1539
Toronto, Ontario, October 1, 2024
PRESENT: The Honourable Mr. Justice A. Grant
BETWEEN: |
ELSAEED FARAHAT EBADA |
Applicant |
and |
ATTORNEY GENERAL OF CANADA |
Respondent |
JUDGMENT AND REASONS
I. OVERVIEW
[1] The Canada Revenue Agency found that Mr. Elsaeed Ebada was ineligible for the Canada Recovery Benefit. The Agency came to this conclusion because Mr. Ebada had not established that he earned at least $5,000 of employment income or net self-employment income in the relevant periods, which was a requirement.
[2] Mr. Ebada now seeks judicial review of this ineligibility decision.
[3] While I sympathize with Mr. Ebada’s situation, this application for judicial review must be dismissed because the ineligibility decision was reasonable. It was reasonable because the decision-maker appropriately assessed the information submitted by Mr. Ebada, and because it was consistent with the law. My reasons follow.
II. BACKGROUND
A. The Canada Recovery Benefit eligibility requirements
[4] The Canada Recovery Benefit [CRB] was one of many measures introduced by the federal government to ease the economic hardship caused by the COVID-19 pandemic. It provided financial support to individuals who suffered a loss of income due to the pandemic, and who could not benefit from the protection offered by the usual employment insurance plan. The Canada Revenue Agency [CRA] is the federal agency responsible for administering the program on behalf of the Minister of Employment and Social Development.
[5] Not everyone was eligible to receive the CRB. There were many eligibility requirements, which were set out in the Canada Recovery Benefits Act [CRB Act]. Of most importance for this case, the CRB Act requires employees or self-employed workers to have earned at least $5,000 in employment income or net self-employment income in 2019, 2020, or in the 12 months preceding the date of their last application.
B. Mr. Ebada’s work history and the CRA Review Process
[6] Mr. Ebada is a self-employed owner of a home renovation business and owner of two rental units in Cantley, Quebec. He applied for, and received, the CRB for 14 two-week periods within the following times: January 17, 2021 to February 13, 2021; February 28, 2021 to March 13, 2021; and March 28, 2021 to August 28, 2021.
[7] In February 2023, Mr. Ebada was informed that his account was selected for review to determine his eligibility for the CRB. Related to this review, the CRA requested supporting documentation for the Applicant’s CRB applications to verify his income.
[8] The letter informed the Applicant that supporting documents to show self-employment income could include:
- Invoices for services rendered
- Receipt of payment for the service or services provided
- Documents showing income earned from a
“trade or business”
as a sole proprietor, an independent contractor, or a partnership,
- Any other document that will confirm that the Applicant earned $5,000 in self-employment income
[9] The CRA subsequently received a letter from the Applicant, dated February 27, 2023. The letter contained: a) a copy of an e-transfer dated November 30, 2020, received by Ebada Contractors Inc.; and b) copies of 10 invoices from Ebada Contractors Inc. dated from September 2019 to May 2021.
[10] In a letter dated June 5, 2023, a CRA agent informed Mr. Ebada that he was not eligible for the CRB because he had not earned at least $5,000 (before taxes) of employment or net self-employment income in 2019, 2020 or in the 12 months before the date of his first CRB application. This was the first level decision.
C. Decision under Review
[11] Mr. Ebada requested a second review of his eligibility for the CRB, as he was entitled to do. The review was conducted by a Manager with “Canada Emergency Benefits Validation.”
In conducting the review, the Manager considered:
a)the February 27, 2023 letter and the submitted documents;
b)a letter from the Applicant dated June 11, 2023 that included:
a copy of the Applicant’s completed T1- readjustment request for 2020 tax return;
a copy of the Applicant’s “My business account”
deposit history for 2020;
a copy of three invoices from Ebada Contractors dated November 10, 2019, November 24, 2019 and December 22, 2019;
a copy of the Applicant’s Notice of Assessment dated June 6, 2023 for the 2020 taxation year;
c)CRA’s case-specific notepad;
d)CRA’s agency-wide notepad;
e)the Applicant’s income and deductions from income for the 2020 and 2021 taxation years;
f)the Applicant’s summary of T1 returns;
g)a CRA document entitled “Confirming CERB, CRB, CRSB or CRCB Eligibility”
; and
h)the phone script used by CRA agents when callers ask what types of documents are required to support their eligibility.
[12] In addition to the above documents, the Manager also called Mr. Ebada. In the record of that conversation, the Manager states that she explained to Mr. Ebada that business revenues (such as the payments indicated in the e-transfer and the invoices he provided) are not the same as employment or self-employment income. She further explained that once a business is incorporated, it becomes its own entity, and income from a business is not the same as personal income. The Manager also asked Mr. Ebada if he could provide any documentation, such as transfers from a business account to a personal account. He stated that he had already provided sufficient documentation, that he was already receiving calls from collections, and that he was told to not answer any questions over the phone.
[13] After completing the second review of the Applicant’s eligibility for the CRB, the Manager again determined that the Applicant did not meet the eligibility criteria because he did not earn at least $5,000 (before taxes) of employment or net self-employment income in 2019, 2020, or in the 12 months before the date of his first application.
[14] Mr. Ebada now seeks judicial review of this decision. Throughout the process, Mr. Ebada has represented himself, though he has received some help from his son.
III. ISSUES
[15] This matter raises only the following issue:
Was the second-level decision reasonable?
IV. LEGISLATIVE SCHEME
[16] As noted above, the law that governs the CRB is the CRB Act. Under section 7 of the CRB Act, the Minister must pay the CRB to any person who:
[17] One of the eligibility requirements in section 3 of the CRB Act is an income requirement. Specifically, paragraphs 3(1)(d) and 3(1)(e) of the CRB Act provide that to be eligible to receive the benefit a person must have earned at least $5,000 of income in the following periods:
a)for a two-week period beginning in 2020, the person must have earned a minimum of $5,000 in 2019 or in the 12-month period preceding the day on which they applied for the CRB; and
b)for a two-week period beginning in 2021, the person must have earned a minimum of $5,000 in 2019, 2020, or in the 12-month period preceding the day on which they applied for the CRB.
[18] The CRB Act also had requirements related to acceptable sources of income. Only income from the five specific sources listed in paragraph 3(1)(d) of the CRB Act satisfy the statutory income requirement, which includes employment and self-employment.
[19] The relevant provisions of the CRB Act are excerpted in Annex 1, below.
V. STANDARD OF REVIEW
[20] It is well established that the standard of review applicable to the merits of the CRA's decisions regarding CRB benefits is reasonableness (He v Canada (Attorney General), 2022 FC 1503 at para 20; Lajoie v Canada (Attorney General), 2022 FC 1088 at para 12).
[21] This means that I cannot grant this application unless I find that the Manager’s decision was unreasonable: see Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 at para 15 [Vavilov].
VI. ANALYSIS
[22] Before dealing with the main issues that arise in this case, the Respondent has raised three procedural concerns that must be considered.
A. Preliminary Matter: Style of Cause
[23] The Respondent correctly submits that the Applicant improperly named the Canada Revenue Agency as the Respondent in this case. In these matters, the CRA is the delegate of the Minister of Employment and Social Development. Under s. 303(2) of the Federal Court Rules [the Rules], this means that the responding party should be the Attorney General of Canada.
[24] As a result, I will order that the named Respondent in this matter be changed to the Attorney General of Canada.
B. Preliminary Matter: Fresh Unsworn Evidence
[25] The Respondent also submits that the Applicant has included an exhibit in his record that was not in the Applicant’s affidavit as served on February 29, 2024, and is unsworn. Specifically, exhibit 17 in the Applicant’s Record as served on May 7, 2024 (the 2020 CRA Notice of Tax Return Reassessment) has not been sworn and differs from exhibit 17 in the Applicant’s affidavit as served on February 29. As such, the Respondent argues that exhibit 17 should be disregarded.
[26] The Applicant’s Record does not contain a proper affidavit, but does contain many exhibits that have been commissioned by a Commissioner of Oaths. In examining these exhibits, it does appear that exhibit 17 is unsworn. Pursuant to s.80(3) of the Rules, it should be struck. S.80(3) reads: “Where an affidavit refers to an exhibit, the exhibit shall be accurately identified by an endorsement on the exhibit or on a certificate attached to it, signed by the person before whom the affidavit is sworn.”
Given that exhibit 17 was not signed by the person before whom it was sworn and thus did not adhere to s.80(3) of the Rules, it should not be considered: see Hussaini v Canada (Social Development), 2011 FC 26 at para 19.
[27] Although it is not included in the Respondent’s submissions, exhibit 16 is also unsworn, or was not signed by the person before whom it was sworn and thus also will not be considered.
C. Preliminary Matter: Evidence not Before the Decision-Maker
[28] When a court judicially reviews an administrative decision, it assesses whether that decision was reasonable (or in some cases correct) at the time that it was made, based on the information that was before it. As I explained to Mr. Ebada at the hearing in this matter, judicial review is not meant to provide a new opportunity to submit new information that the parties may now wish to be considered.
[29] The Respondent submits that the Applicant, in his Memorandum, relied on unsworn allegations of facts that were not before the Manager during the second-level review. Specifically, the Applicant included the following factual statements in his Memorandum, which were not before the decision-maker:
“after many years of living overseas, he decided to settle in Canada in 2020 and restart his business”
; “due to lack of his experience in tax preparation he inadvertently did a mistake while preparing his 2020 tax return where he used the total amount of his rental units income with a smaller amount of his business income, considering by mistake the rental income as also a self-employment income”
;
-
“when CRA excluded the rental income amount as being not a self-employment income, now only the total net self-employment income became less than the required amount for eligibility (which is $5,000) to apply for Canada Recovery Benefit.”
-
“At last with the help of his eldest son which has more experience in tax preparation they together succeeded online to change his 2020 tax return in Feb.12, 2024 as evidenced from exhibit No. 16 and CRA reassessed again his 2020 tax return and sent to him notice of reassessment exhibit No.17 and 18 dated in Feb.29, 2024 with refund of $ 1,443.82 deposited directly to his bank account.”
[30] The Respondent also submits that exhibits 16, 17, and 18 were not before the Manager on the second review, and should not therefore be considered. I agree.
[31] While there are some exceptions to the general rule that no new evidence may be submitted on judicial review, these exceptions do not apply here: see Tsleil-Waututh Nation v Canada (Attorney General), 2017 FCA 128 at paras 97–98.
D. The Decision was Reasonable
[32] Mr. Ebada’s main argument in support of this judicial review is that the ineligibility decision is unreasonable because the Manager did not properly account for: a) his business income for Ebada Contractors Inc., as demonstrated by the invoices, the e-transfer, and a bank statement that he submitted; and b) the 2020 CRA Notice of Reassessment increasing his income from $4,607 to $7,607.
[33] I disagree. The Manager considered all the evidence before her and reasonably concluded that Mr. Ebada had not met the statutory income requirement. As the Respondent argues, the Applicant has not identified any reviewable errors and merely disagrees with the Manager’s finding that he did not meet the CRB income requirements.
[34] The CRA’s Guidelines “Confirming CERB, CRB, CRSB or CRCB Eligibility”
[the Guidelines] set out acceptable proof of the statutory income requirements for self-employed workers. Those include:
Detailed invoices for services rendered (must include the date of the service, description of service, who the service was for, and the applicant’s or company’s name);
Documentation for receipt of payment for the service provided (e.g., statements of accounts, bank statements or bill of sale showing a payment and the remaining balance owed);
Documentation showing income is earned from carrying on a “trade or business”
as a sole proprietor, an independent contractor, or some form of partnership;
Contracts;
Books and records;
A list of expenses to support the net result of earnings;
Any other documentation that will substantiate $5,000.00 in self-employment income.
[35] While the Applicant provided ten invoices for services rendered by Ebada Contractors Inc., as the Manager noted, he only provided two documents showing receipt of payment for those services – the e-transfer and a bank statement for Ebada Contractors Inc. The bank statement for Ebada Contractors Inc. does appear to show a balance of $11,864, which is above the $5,000 requirement – but it is not accompanied by supporting documents explaining the source of the funds or details regarding the service(s) provided, etc. It does not make reference to the relevant invoice numbers, or appear to reflect the amounts on any of the submitted invoices.
[36] Further, as the Manager noted in the Second Review Report, and as was explained in a call to Mr. Ebada, because Ebada Contractors Inc. is registered as a corporation, its revenue is separate from Mr. Ebada’s personal income. It is Mr. Ebada’s personal income, and not his company’s revenue, which must meet the statutory $5,000 requirement. The Applicant did not adequately explain how he was paid from his business, and did not, when asked, provide any documentation such as transfers from his business bank account to his personal bank account. In addition, Mr. Ebada’s income and deductions for the 2020 and 2021 taxation years, as recorded on the CRA computer system, show a total of $3,923 and $3,228, respectively.
[37] The Manager also noted the Applicant’s 2020 Notice of Tax Reassessment, which increased his income from $4,607 to $7,607. However, as the Respondent submits, the CRA Agent was not obliged to accept this as conclusive proof of his income, particularly given the discrepancies of both figures from the CRA computer records, which showed an income of $3,923.
[38] Under the Guidelines, the amounts in tax returns or notices of assessments are self-reported and, as such “are not considered to be conclusive proof that the amounts reported were actually earned and are from eligible sources.”
That principle has been confirmed by this Court: see, for example Aryan v. Canada (Attorney General), 2022 FC 139 at para 35; Cozak v Canada (Attorney General), 2023 FC 1571 at para 23; Sjogren v Canada (Attorney General), 2023 FC 24 at para 39; Walker v Canada (Attorney General), 2022 FC 381 at paras 29-38; Ntuer v Canada (Attorney General), 2022 FC 1596 at para 27.
[39] Given the limited information that was provided to the Manager, and given that much of this information related to the Applicant’s company and not to his own personal income, I have concluded that the Manager’s decision was reasonable. The Manager’s reasons were rational, intelligible, and justified. It was open to the Manager to conclude that the documents Mr. Ebada provided were insufficient to establish that he had met the CRB statutory income requirement.
VII. CONCLUSION
[40] The application for judicial review is dismissed, as Mr. Ebada has not demonstrated that the decision under review was unreasonable. There are no errors warranting judicial intervention.
JUDGMENT in T-288-24
THIS COURT’S JUDGMENT is that:
The application for judicial review is dismissed.
The Style of Cause is amended to name the Attorney General of Canada as the Respondent.
There is no order as to costs.
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"Angus G. Grant" |
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Judge |
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