Date: 20250304

Docket: T-752-24

Citation: 2025 FC 397

Ottawa, Ontario, March 4, 2025

PRESENT: The Hon Mr. Justice Henry S. Brown

BETWEEN:

KATALIN DEKANY

Applicant

and

ATTORNEY GENERAL OF CANADA

Respondent

JUDGMENT AND REASONS

[1] This is an application for judicial review of a decision by a Canada Benefits Validation Officer [Officer] of the Canada Revenue Agency [CRA] dated February 29, 2024. The Officer found the Applicant was ineligible for the Canada Recovery Benefit [CRB] because she did not earn the minimum income requirement of $5,000 required.

[2] For the reasons below, the application will be dismissed.

I. Facts

[3] The Applicant is self-represented. Her claim to be entitled to CRB was approved. She was paid CRB from September 27, 2020, to October 9, 2021 [Benefit Period]. She also applied for and was paid the Canada Emergency Response Benefit [CERB]. These are different programs. She was audited for both and decisions and after letters and discussions, decisions were made by the CRA in respect of each on the same day. After the audit she was found ineligible for CERB (I understand her CERB repayment was ultimately subject to a remission order). However, she was found not eligible for CRB which is the subject of this judicial review. Only her CRB eligibility is at issue in this application.

[4] During the Benefit Period, the Applicant was self employed as a small business owner in the education sector, which was impacted by the COVID-19 pandemic. Between October 2020 and October 2021, she claimed and received $24,600 from the CRB.

A. Legislative scheme

[5] The CRB was implemented by legislation enacted by the Parliament of Canada as a response to COVID-19: Canada Recovery Benefits Act, SC 2020, c 12, s 2 [CRB Act]. Parliament limited its availability to those who satisfy certain requirements, including in her case, previous minimum net self-employment income of $5,000. As noted in paragraph 6 below, net self-employment income is defined by Parliament as “revenue from the self-employment less expenses” incurred to earn that revenue:

[6] Notably, s 3(2) specifies that “self-employment” income is limited to net self-employment income “revenue from the self-employment less expenses” (notwithstanding the Applicant raises issues in this respect):

[7] The CRB Act requires recipients to repay what they received if upon subsequent examination it turns out they erroneously certified they were eligible:

[8] Notably also, Parliament’s legislation requires a CRB recipient, like the Applicant, to provide such information as the Minister may require in respect of an application, including subsequent audits (verifying compliance):

B. Procedural history

[9] The CRA decided to audit the Applicant’s eligibility for CRB payments as authorized under the CRB Act. In an Initial Contact Letter [First Letter], dated February 9, 2023, the CRA asked the Applicant for further documentation to support her claim to have met the minimum net self-employment income threshold of $5,000.00 in the relevant periods.

[10] Notably, the First Letter expressly spelled out what net self-employment income means, as follows:

Income could be earned through employment income (total or gross pay), net self-employment income (after deducting expenses), maternity and parental benefits from Employment Insurance, or similar Québec Parental Insurance Plan (QPIP) benefits.

[Emphasis added]

[11] In her reply, by letter dated February 23, 2023, the Applicant said in 2019 she did “some teaching/instruction and consultation work, mostly for cash payment from individuals,” but “never created an invoice or payment receipt,” “cannot recall the individuals after 4 (very tumultuous years),” and “did not keep the record of that insignificant amount.” Further, her earnings and expenses had already been filed on her tax returns, which “were always accepted, never refused or questioned.” The Applicant asked the CRA to “please accept the fact that I cannot provide any further details of the persons whom I taught or consulted with — after nearly 4 years — even my phone does not keep records so far back for calls or text messages.”

[12] On May 10, 2023, the CRA found that the Applicant was not entitled to the CRB because she “did not earn at least $5,000 (before taxes) of employment or net self-employment income” [emphasis added] in the relevant timeframe [First Level Decision].

[13] On June 2, 2023, the Applicant objected to the First Level Decision, alleging that “some of the relevant information filed was not considered,” including

• Her valid tax return;

• Her explanation for why she lacked documentation;

• Her individual and special circumstances; and

• Allegations that the First Decision contradicts the CRA’s position that “undocumented income (cash or cheque) is… considered income, especially when properly claimed and filed”, and that it is “an attempt to recover legitimately claimed CRB and CERB payment”.

[14] On February 29, 2024, the CRA considered the objection and new evidence filed by the Applicant, and once again found she was not entitled to the CRB [the Decision] based on her not earning more than $5,000 net self-employment income.

[15] The Applicant seeks judicial review of the Decision. The record for that included information gathered leading up to the First Level Decision.

II. Decision under review

[16] The Decision found the Applicant was not eligible for the CRB. It states:

Based on our review, you are not eligible for the following reason(s):

You did not earn at least $5,000 (before taxes) of employment and/or net self-employment income in 2019, 2020, or in the 12 months before the date of your application

…

If you received a payment that you were not eligible for, you will be required to repay the amount. We understand that it may not be possible for you to pay your debt immediately and in full. We’re here to help. The CRA offers various solutions tailored to your personal situation. …

[Emphasis added]

[17] The Officers in this case made notes that are recorded in a system-wide notebook which are part of the record on judicial review. They report that the Applicant’s submissions were received and considered. They also list additional documents provided by the Applicant since the First Level Decision. Importantly, they include a copy of the Notice of Assessment issued under the Income Tax Act, RSC, 1985, c 1 (5th Supp) and a spreadsheet of her income and expenses.

[18] The Applicant’s Notice of Assessment for 2019 was based on what she herself self-reported to CRA under the Income Tax Act. It did not show a minimum net self-employment income in 2019 of at least $5,000. Instead, the Applicant reported, and her Notice of Assessment stated, she had a substantial negative net self-employment income loss of $-5,936.62. The Officer’s notes say that while the Applicant received income from several sources, the “only eligible working income would be teaching/consulting income [of $5,450] if verified by documentation” [emphasis added]. The notes further state:

Benefit recipient provided additional information: New Documents: Submitted February 22, 2024

T2125 form for 2019

Gross: $5,450.00

Expenses: $11,386.62

Net income: $(-5,936.62)

[Emphasis added]

[19] Likewise, the Applicant self reported another loss on net self-employment income of $-5.912.90 in 2020:

T2125 form for 2020

Gross: $1,150.00

Expenses: $7062.90

Net income: $(-5,912.90)

[Emphasis added]

[20] It is a fact that the substantial net self-employment losses reported by the Applicant and found by the Officer are very significantly below the minimum $5,000 net self-employment income required for CRB eligibility under the CBR Act.

III. Issues

[21] The issues are whether the Decision is reasonable and procedurally unfair.

IV. Standard of review

[22] The parties agree, and I concur, the standard of review for the merits of the Decision is reasonableness. On the issue of procedural fairness, the standard is whether the Applicant was given the opportunity to know the case against her and to present their case fairly and fully.

A. Reasonableness

[23] With regard to reasonableness, in Canada Post Corp v Canadian Union of Postal Workers, 2019 SCC 67, issued contemporaneously with the Supreme Court of Canada’s decision in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653 [Vavilov], the majority per Justice Rowe explains what is required for a reasonable decision, and what is required of a court reviewing on the reasonableness standard:

[31] A reasonable decision is “one that is based on an internally coherent and rational chain of analysis and that is justified in relation to the facts and law that constrain the decision maker” (Vavilov, at para. 85). Accordingly, when conducting reasonableness review “[a] reviewing court must begin its inquiry into the reasonableness of a decision by examining the reasons provided with ‘respectful attention’ and seeking to understand the reasoning process followed by the decision maker to arrive at [the] conclusion” (Vavilov, at para. 84, quoting Dunsmuir, at para. 48). The reasons should be read holistically and contextually in order to understand “the basis on which a decision was made” (Vavilov, at para. 97, citing Newfoundland Nurses).

[32] A reviewing court should consider whether the decision as a whole is reasonable: “what is reasonable in a given situation will always depend on the constraints imposed by the legal and factual context of the particular decision under review” (Vavilov, at para. 90). The reviewing court must ask “whether the decision bears the hallmarks of reasonableness – justification, transparency and intelligibility – and whether it is justified in relation to the relevant factual and legal constraints that bear on the decision” (Vavilov, at para. 99, citing Dunsmuir, at paras. 47 and 74, and Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5, at para. 13).

[33] Under reasonableness review, “[t]he burden is on the party challenging the decision to show that it is unreasonable” (Vavilov, at para. 100). The challenging party must satisfy the court “that any shortcomings or flaws relied on ... are sufficiently central or significant to render the decision unreasonable” (Vavilov, at para. 100).

[Emphasis added]

[24] In the words of the Supreme Court of Canada in Vavilov, a reviewing court must be satisfied the decision-maker’s reasoning “adds up”:

[104] Similarly, the internal rationality of a decision may be called into question if the reasons exhibit clear logical fallacies, such as circular reasoning, false dilemmas, unfounded generalizations or an absurd premise. This is not an invitation to hold administrative decision makers to the formalistic constraints and standards of academic logicians. However, a reviewing court must ultimately be satisfied that the decision maker’s reasoning “adds up”.

[105] In addition to the need for internally coherent reasoning, a decision, to be reasonable, must be justified in relation to the constellation of law and facts that are relevant to the decision: Dunsmuir, at para. 47; Catalyst, at para. 13; Nor-Man Regional Health Authority, at para. 6. Elements of the legal and factual contexts of a decision operate as constraints on the decision maker in the exercise of its delegated powers.

[106] It is unnecessary to catalogue all of the legal or factual considerations that could constrain an administrative decision maker in a particular case. However, in the sections that follow, we discuss a number of elements that will generally be relevant in evaluating whether a given decision is reasonable, namely: the governing statutory scheme; other relevant statutory or common law; the principles of statutory interpretation; the evidence before the decision maker and facts of which the decision maker may take notice; the submissions of the parties; the past practices and decisions of the administrative body; and the potential impact of the decision on the individual to whom it applies. These elements are not a checklist for conducting reasonableness review, and they may vary in significance depending on the context. They are offered merely to highlight some elements of the surrounding context that can cause a reviewing court to lose confidence in the outcome reached.

[Emphasis added]

[25] Vavilov makes it abundantly clear the role of this Court is not to reweigh and reassess the evidence unless there are “exceptional circumstances”. The Supreme Court of Canada instructs:

[125] It is trite law that the decision maker may assess and evaluate the evidence before it and that, absent exceptional circumstances, a reviewing court will not interfere with its factual findings. The reviewing court must refrain from “reweighing and reassessing the evidence considered by the decision maker”: CHRC, at para. 55; see also Khosa, at para. 64; Dr. Q, at paras. 41-42. Indeed, many of the same reasons that support an appellate court’s deferring to a lower court’s factual findings, including the need for judicial efficiency, the importance of preserving certainty and public confidence, and the relatively advantageous position of the first instance decision maker, apply equally in the context of judicial review: see Housen, at paras. 15-18; Dr. Q, at para. 38; Dunsmuir, at para. 53.

[Emphasis added]

B. Procedural fairness

[26] The Federal Court of Appeal has determined, and I agree, that on procedural fairness “the ultimate question remains whether the applicant knew the case to meet and had a full and fair chance to respond”: see Canadian Pacific Railway Company v Canada (Attorney General), 2018 FCA 69 at para 55-6 [Canadian Pacific Railway] [per Rennie JA]):

[55] Attempting to shoehorn the question of procedural fairness into a standard of review analysis is also, at the end of the day, an unprofitable exercise. Procedural review and substantive review serve different objectives in administrative law. While there is overlap, the former focuses on the nature of the rights involved and the consequences for affected parties, while the latter focuses on the relationship between the court and the administrative decision maker. Further, certain procedural matters do not lend themselves to a standard of review analysis at all, such as when bias is alleged. As Suresh demonstrates, the distinction between substantive and procedural review and the ability of a court to tailor remedies appropriate to each is a useful tool in the judicial toolbox, and, in my view, there are no compelling reasons why it should be jettisoned.

[56] No matter how much deference is accorded administrative tribunals in the exercise of their discretion to make procedural choices, the ultimate question remains whether the applicant knew the case to meet and had a full and fair chance to respond. It would be problematic if an a priori decision as to whether the standard of review is correctness or reasonableness generated a different answer to what is a singular question that is fundamental to the concept of justice―was the party given a right to be heard and the opportunity to know the case against them? Procedural fairness is not sacrificed on the altar of deference.

[Emphasis added]

[27] I will also follow a more recent Federal Court of Appeal judgment relying on “the long line of jurisprudence, both from the Supreme Court and” the Federal Court of Appeal itself, that “the standard of review with respect to procedural fairness remains correctness”: see Canadian Association of Refugee Lawyers v Canada (Immigration, Refugees and Citizenship), 2020 FCA 196 at paragraph 35 per de Montigny JA (as he then was). Notably, to the same effect is the judgment of the Supreme Court of Canada in Canada (Minister of Citizenship and Immigration) v Khosa, 2009 SCC 12, per Binnie J at paragraph 43:

[43] Judicial intervention is also authorized where a federal board, commission or other tribunal

(b) failed to observe a principle of natural justice, procedural fairness or other procedure that it was required by law to observe;

No standard of review is specified. On the other hand, Dunsmuir says that procedural issues (subject to competent legislative override) are to be determined by a court on the basis of a correctness standard of review. Relief in such cases is governed by common law principles, including the withholding of relief when the procedural error is purely technical and occasions no substantial wrong or miscarriage of justice (Pal, at para. 9). This is confirmed by s. 18.1(5). It may have been thought that the Federal Court, being a statutory court, required a specific grant of power to “make an order validating the decision” (s. 18.1(5)) where appropriate.

[28] In Dunsmuir v New Brunswick, 2008 SCC 9 at paragraph 50, the Supreme Court of Canada also establishes what is required on the correctness standard of review:

[50] When applying the correctness standard, a reviewing court will not show deference to the decision maker’s reasoning process; it will rather undertake its own analysis of the question. The analysis will bring the court to decide whether it agrees with the determination of the decision maker; if not, the court will substitute its own view and provide the correct answer. From the outset, the court must ask whether the tribunal’s decision was correct.

V. Submissions of the parties

A. Preliminary issues

[29] The Respondent raises several preliminary objections.

[30] First, the Respondent submits the Applicant incorrectly named the CRA as a party in this matter and that the proper responding party is the Attorney General of Canada. I did not hear an objection and therefore the style of cause is amended accordingly with immediate effect.

[31] Second, the Respondent submits the Applicant’s Record does not comply with Rule 309(2) of the Federal Courts Rules, SOR/98-106 because it includes the Applicant’s Motion Record and an Order with respect to her motion for an extension of time. The Respondent submits these documents should not be considered by the Court. I agree.

[32] It is not fair to the CRA Officer nor is in accord with constraining law from the Federal Court of Appeal to allow a decision such as this to be attacked on judicial review on the basis of evidence the Applicant did not file with the Officer, unless certain exceptions are met (background, procedural unfairness, no evidence matters) which are not present in the case at bar: see Association of Universities and Colleges of Canada v Canadian Copyright Licensing Agency (Access Copyright), 2012 FCA 22.

B. Was the Second Decision reasonable?

[33] The Applicant submits the Second Decision is unreasonable. Her specific arguments are generally tied to procedural fairness, all as discussed below.

[34] The Respondent submits the Officer carefully considered all of the Applicant’s submissions and reasonably determined that her reported negative net self-employment income did not meet the statutory requirement for CRB eligibility.

[35] The Respondent also submits the CRB Act does not have any compassionate relief and fairness provisions: Flock v Canada (Attorney General), 2022 FC 305 [Flock] at paragraph 7; Letourneau v Canada (Attorney General), 2024 FC 760 at paragraph 11. The need to meet net self-employment income requirements in s 3(2) of the CRB Act is “a mandatory statutory criterion: There is no room for discretion” (Pless v Canada (Attorney General), 2025 FC 252 at para 14, citing Flock at para 23). In my respectful view, the Applicant essentially disagrees with the legislative scheme surrounding the CRB. That is not a rule for this Court to reverse but issues already decided by Parliament.

[36] The Respondent submits the issue is whether the Officer properly considered the Applicant’s net self-employment income, that is, her self-employment income after deducting related expenses.

[37] The Applicant candidly admits she did see and read this in the First Letter dated February 9, 2023. That letter was very clear: to be eligible the Applicant had to have earned $5,000 or more in self- employment income less expenses, that is, more than $5,000 in net self-employment income.

[38] While she saw and considered these words from the outset, she thought they were a mistake on the part of the CRA. It seems she had no assistance to point out this error.

[39] I see no basis to intervene in the Officer’s Decision which was reasonable in that it is transparent, intelligible and fully justified by the facts in this case.

C. Was the Second Decision procedurally fair?

[40] The Applicant submits the Second Decision was procedurally unfair. She says she filled out all required forms which were accepted by the CRA, and in the application process “the Government fail[ed] to disclose an essential requirement,” namely that her self-employment income had to be net of her expenses. The Applicant quite unreasonably alleges this “suggest[s] a purposeful coverup.” There is no merit in this submission: as seen from the above CRA gave her clear notice of what she had to establish re her claim to CRB in the audit. The relevant provisions were in the legislation of Parliament and open for all to review; the Applicant is taken to know the law in cases like this, even if she has a mistaken view of what it says. I make no comment on her claim for CERB which was a different program, and in respect of which I understand her claims were rejected after audit (but subject to a remission order).

[41] The Applicant also submits CRA failed to correct and advise the Applicant of its mistake in determining her eligibility for the CRB in a timely manner. The Applicant however acknowledges the CRA’s demand for documentary evidence was “within the maximum 36 months” but submits that this delay “does not show the hallmarks of procedural fairness.” Therefore, I find no merit in this submission.

[42] The Applicant submitted she received “a different letter” finding her ineligible than what the Respondent has in the Respondent’s record. The parties do indeed refer to different letters. However, the Respondent reasonably refers to the letter dealing with her CRB eligibility, while the letter the Applicant relies on relates to her CERB claims.

[43] The Applicant submitted she was not aware that her net self-employment income was at issue. The Respondent disagrees, and reasonably in my view submits the Applicant was indeed informed of the $5,000 net self-employment income requirement over the course of the review process. In my respectful view the allegation she did not have notice is without basis. The Respondent points out this requirement is also explicit in s 3(2) of the CRB Act, again as I have already accepted. I agree with the Respondent because the First Letter of February 9, 2023, and the subsequent decision letters of May 10, 2023 and February 9, 2024 all explain or refer to net self-employment income.

[44] In addition, the Applicant availed herself of the opportunity to make further submissions to the Second Reviewing Officer by phone, letters, and additional documents to address their concerns, but and with respect these were reasonably rejected as found above.

[45] In this connection, I observe the Applicant’s arguments may well be dealt with in Flock at paragraphs 21-23 by Justice Fothergill (and that some issues re CERB have been dealt with by remission orders as it seems in this case):

[21] Mr. Flock says that the transition from the CERB to the CRB was intended to be seamless, and it is inequitable and unjust for him to have received the CERB but then be denied the CRB when his financial circumstances did not change. He asserts that there was nothing in the eligibility questionnaire he completed to suggest his eligibility for the CRB would be determined with reference to his net self-employment income, rather than his gross self-employment income. He notes that he did in fact receive the CRB for four two-week periods, from September 27, 2020 to November 21, 2020.

[22] While Mr. Flock’s criticism of the differing eligibility criteria for the CERB and CRB makes some logical sense, this is more a critique of the policy underlying the two legislative programs than a legal complaint. It is perhaps worth noting that the Remission Order was intended to ameliorate the effects of possible confusion surrounding eligibility for the CERB, which was introduced with short notice at the beginning of a public health emergency. Parliament was under no obligation to extend the Remission Order to the CRB when the new benefit was introduced seven months later.

[23] The eligibility criteria established by s 3(2) of the CRBA are statutory and non-discretionary. The Officer had no choice but to apply them. Even if Mr. Flock may have reasonably believed he would be eligible for the CRB based on his previous receipt of the CERB, the legal doctrine of legitimate expectations is limited to procedural relief and does not ensure a particular outcome. Furthermore, there can be no estoppel in the face of an express provision of a statute: the legislation is paramount (Mount Sinai Hospital Center v Quebec (Minister of Health and Social Services), 2001 SCC 41 at paras 35, 47).

[Emphasis added]

VI. Conclusion

[46] Given the above, this application must be dismissed.

VII. Costs

[47] Neither party requests costs. The Applicant also notes that she is retired and living on a very limited pension, and so requests no costs be awarded against her if her application fails. This is not a case for costs.

JUDGMENT in T-752-24

THIS COURT’S JUDGMENT is that:

1. The application is dismissed.

2. The style of cause is amended with immediate effect to show the Attorney General of Canada as the Respondent.

3. There is no order as to costs.

"Henry S. Brown"

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET:	T-752-24
STYLE OF CAUSE:	KATALIN DEKANY v ATTORNEY GENERAL OF CANADA
PLACE OF HEARING:	TORONTO, ONTARIO
DATE OF HEARING:	FEBRUARY 26, 2025
JUDGMENT AND REASONS:	BROWN J.
DATED:	MARCH 4, 2025

APPEARANCES:

Katalin Dekany	FOR THE APPLICANT (ON HER OWN BEHALF)
Maitland Shaheen	FOR THE RESPONDENT

SOLICITORS OF RECORD:

Attorney General of Canada Toronto, Ontario

FOR THE RESPONDENT