Docket: T-1184-24
Citation: 2025 FC 498
Ottawa, Ontario, March 18, 2025
PRESENT: The Honourable Madam Justice Ngo
BETWEEN: |
CHRISTOPHER JAMES SHTOKAL |
Applicant |
and |
ATTORNEY GENERAL OF CANADA |
Respondent |
JUDGMENT AND REASONS
[1] The Applicant, Christopher James Shtokal [Applicant] seeks judicial review of a decision by an officer of the Canada Revenue Agency [CRA] who concluded on a second-level review that he was not eligible for the Canada Emergency Response Benefit [CERB] [Decision]. The Applicant claims that he did not exceed the maximum threshold in the relevant periods and that he was eligible for the CERB.
[2] For the reasons that follow, the Decision is unreasonable. As such, the application for judicial review is granted in part.
I. Facts
[3] The Applicant received the CERB between March 15, 2020, and September 26, 2020 (periods 1 to 7). On February 25, 2022, the CRA issued a letter to the Applicant asking him to provide documents to support his eligibility and to verify that his income was $1,000 or less during the CERB periods he applied for. On April 7, 2022, the Applicant sent the CRA his pay stubs, a bank statement showing income from March to October 2020, a letter from his employer confirming his employment and his income, and his 2020 T-4 slips.
[4] On June 21, 2023, the Applicant was informed that he was not eligible to receive the CERB because he earned more than $1,000 of employment or self-employment income during the applicable period and he did not stop working or have his hours reduced for reasons related to COVID-19 [First-Level Decision]. The Applicant was advised that he could request a second-level review if he disagreed with their conclusions. The letters also informed the Applicant that he could submit additional information, among other things, to support his challenge.
[5] On July 18, 2023, the Applicant requested a second review of the First-Level Decision [Second-Level Review]. The same day, the CRA received from the Applicant a cover letter explaining his dispute of the First-Level Decision [Cover Letter]. He stated that he was hired by Walmart to work approximately 30 hours a week. However, when the COVID-19 pandemic started, he only worked for about 15 hours weekly. He admitted that for some months he was over the $1,000 limit because he had to honour his commitment to work the shifts he was allocated, but he also shows that for one of the periods he made less than $1,000. The Applicant alleges that he had issues accessing his pay stubs until 6 months after he started working. He couldn’t verify his net income. The Applicant also explained his difficult financial situation and stated that he was of good faith as he had never attempted fraud. The documents submitted during the first review were also attached to the letter.
[6] On April 19, 2024, the CRA officer had a telephone call with the Applicant. During that call, the CRA officer confirmed the Applicant’s belief that he earned less than $1,000 during the CERB periods as well as the details about the Applicant’s circumstances that were submitted in his Cover Letter. The CRA did not require further documents.
[7] On April 23, 2024, the CRA officer on second review [Officer] sent the Applicant a letter advising him that he was not eligible for the CERB because he earned more than $1,000 in employment income during the applicable CERB periods. This Decision is the subject of this judicial review.
II. Issues and Standard of Review
[8] The issue in this case is whether the Decision denying the Applicant’s eligibility to the CERB was unreasonable.
[9] The Court will apply the reasonableness standard of review to the merits of the Decisions (Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 at paras 16-17 [Vavilov]; Aryan v Canada (Attorney General), 2022 FC 139 at paras 15-16; Ganesh v Canada (Attorney General), 2023 FC 1405 at para 30 [Ganesh]).
[10] The Applicant has asked that the Court recognize his eligibility for the CERB or to have mercy on him and quash his debt. As I explained to the Applicant, the Court on judicial review cannot make a determination of his CERB eligibility. On judicial review, a reviewing court must determine whether the decision bears the hallmarks of reasonableness - justification, transparency and intelligibility (Vavilov at para 99). A reasonable decision in a given case always depends on the relevant factual and legal constraints affecting the decision under review (Vavilov at para 90). A court applying the reasonableness standard does not ask what decision it would have made in place of the administrative decision maker (Vavilov at para 13).
[11] The decision maker may assess and evaluate the evidence before it and 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”
(Vavilov at para 125). The party challenging the decision has the burden of showing that the decision was unreasonable (Vavilov at para 100).
III. Analysis
[12] The Respondent initially objected to an exhibit attached to the Applicant’s affidavit (Exhibit B) in the Applicant’s record. The document at issue is a handwritten breakdown of his income earned during the periods where he applied for the CERB [New Document]. At the hearing, the Respondent conceded that the New Document is contextual since it is only a summary of facts that were before the Officer.
[13] I agree. The New Document is a list of the Applicant’s net and gross income for the applicable periods without new information that was not before the Officer. The New Document is a consolidation of different information that was already in the record. Accordingly, I will consider Exhibit B in this judicial review.
[14] The record also includes Notes from the CRA systems that are an integral part of the Decision under review (Aryan at para 22). The Court must also consider these Notes in reviewing the Decision.
A. The Decision Is Unreasonable
[15] The CERB stems from the Canada Emergency Response Benefits Act, SC 2020, c 5, s 8 [CERB Act]. Subsection 6(1) of the CERB Act describes the eligibility requirements. CERB applicants are also subject to the Income Support Payment (Excluded Nominal Income) Regulations, SOR/2020-90 [Regulations]. Section 1 of the Regulations states any income received by applicants must be $1,000 or less for the period of consecutive days on which they have ceased working [Maximum Income Threshold].
[16] Justice Kane in Severcan v Canada (Attorney General), 2025 FC 197 at paragraph 11 explained that the effect of section 1 of the Regulations, despite its awkward drafting, is that applicants can only earn income of $1,000 or less in the relevant period to fall within the eligibility criteria set out in subparagraph 6(1)(b)(i) of the CERB Act. Applicants who earned more than $1,000 in the relevant period were not eligible for benefits in that period.
[17] The issue in this case is centred on the $1,000 Maximum Income Threshold and the CRA’s use of the Applicant’s gross income to calculate this threshold.
[18] The Applicant acknowledged that some pay periods exceeded the $1,000 limit, though barely. The Applicant argues that the CRA improperly applied the Maximum Income Threshold criteria. He states that the Officer did not explain why he used gross income to conclude that the Applicant earned more than $1,000 of employment income during the applicable payment period nor what justified this choice. For one of the periods (period 7), he would not have exceeded the Maximum Income Threshold by applying a net income. According to the Applicant, the Decision is unreasonable because it goes against the good faith of providing financial aid to those in need. It also poses significant harm to the Applicant as he barely makes a living wage to cover basic expenses, and the CRA’s demand for reimbursement will cause him significant financial hardship.
[19] On the other hand, the Respondent alleges that the documents provided by the Applicant demonstrated that his employment income exceeded $1,000 during the CERB periods he applied for. Further, the Applicant admission that he “barely exceeded the 1,000$ limit”
suggested that the Decision was justifiable. The Decision was intelligible, transparent, and justifiable and the Applicant failed to demonstrate any flaws or shortcomings with it.
[20] During the hearing, the Respondent conceded that neither the CERB Act nor the Regulations specified whether to use gross income or net income when assessing the Maximum Income Threshold. As such, the Officer could have relied on gross income or net income as long as it was reasonable within the interpretation of “total income”
in the CERB Act and Regulations. Since the statutes are silent on this matter, it would not be unreasonable for the Officer rely on gross income. The Respondent drew analogies from Ganesh and Zhang v Canada (Attorney General), 2023 FC 1761 to support his position.
[21] With respect, I cannot agree with the Respondent’s submissions. The cases that the Respondent cited are distinguishable because these decisions interpreted the $5,000 income requirement in a case of self-employment income. Self-employment income requires the deduction of expenses which are expressly stated in the legislation and CRA guidelines. However, I do agree with the Respondent’s submission that the definition of the term “total income”
used in section 1 of the Regulations is not defined or specified.
[22] In Matta v Canada (Attorney General), 2025 FC 195 [Matta], Justice Southcott considered a similar question on the Maximum Income Threshold under the Regulations, and the issue of using net income versus gross income to calculate this limit. While the applicant in that case specifically brought up this argument with the CRA, Justice Southcott found that it was not possible to identify any analysis justifying the use of gross income in the officer’s decision and that there were no documents in the record before the Court that spoke to whether the Maximum Income Threshold should be assessed based on gross or net income (Matta at paras 25-30).
[23] I similarly cannot conclude that the record before the Officer provided any further guidance on this issue in the Applicant’s case. The Officer’s Notes confirm that the assessment of the Applicant’s Maximum Income Threshold was based on his gross income. However, it is not possible to identify any analysis underlying the Officer’s decision to use gross income when analyzing the threshold.
[24] Given the lack of specific language in the CERB Act and the Regulations, and any other guidance in guidelines or other documentation, it was not open for the Officer to use gross income over net income without further justification. The record does not disclose any analysis justifying the use of the Applicant’s gross income to calculate the Maximum Income Threshold. As such, the Decision cannot withstand a reasonableness review because it does not meet the hallmarks of justification, intelligibility and transparency based on the factual and legal constraints that bear on the decision maker (Vavilov at paras 85, 100).
[25] The Respondent appropriately pointed out that in periods 1 to 6, both the Applicant’s gross and net income exceeded the $1,000 threshold. However, in period 7, when using the net income, the Applicant’s income would have been under $1,000.
[26] As Justice McHaffie described in Montoute v Canada (Attorney General), 2025 FC 375 [Montoute], in many cases, an applicant’s situation or position may be the same throughout, such that a single determination in respect of all periods may be sufficient and reasonable. However, where the evidence dictates different eligibility conclusions, a blanket conclusion that is reasonable in respect of some periods may not be reasonable in respect of others (Montoute at para 34).
[27] As such, the effect of my conclusion will be pertinent to period 7 in the Applicant’s case.
[28] Consequently, I will grant the application for judicial review in part, setting aside the Officer’s determination of ineligibility in respect of CERB period 7. The Applicant’s eligibility for the CERB payments in that period will be remitted for redetermination by a CRA officer with the Court’s reasons and after the Applicant is afforded an opportunity to provide further evidence and submissions, if any (Montoute at para 40 citing Matta at paras 3, 51).
IV. Costs
[29] The parties did not discuss the issues of costs prior to the hearing. The Respondent stated that he would not be seeking costs. The Applicant did not make any further submissions on the issue of costs.
[30] Under the circumstances, as neither party sought costs, the Applicant represented himself, and success was mixed, no costs are awarded.
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