Federal Court Finds Minister’s CRB Decision Unreasonable
Moncada v. Canada (Attorney General) 2023 FC 114
The Canada Recovery Benefit (“CRB”) provided direct financial support to eligible people residing in Canada and affected by the COVID-19 pandemic for any two-week period between September 27, 2020 and October 23, 2021. Residents had to meet the eligibility requirements for each of the two-week periods. The eligibility requirement at issue in this judicial review was the Income Eligibility Requirement set out in paragraphs 3(1)(d) to (f) of the Canada Recovery Benefits Act (“CRBA”) which requires an applicant to show they had at least $5,000 in income in 2019, 2020, or in the 12 months before the date of their first application.
Facts & Decision
The Applicant, Giuseppe Moncada (“Mr. Moncada”) challenged a decision made by a CRA benefits validation officer (“Officer”). The Officer denied his application for the CRB because Mr. Moncada failed to demonstrate that he met the requirements of subparagraph 3(1)(d)(ii) of the CRBA, namely, that he had earned at least $5000 in 2019, 2020, or 12 months prior to his first application for CRB (“Income Eligibility Requirement”).
Mr. Moncada’s position was that the Officer breached procedural fairness in refusing his application before he was able to obtain further documents requested by the Officer and that the Officer unreasonably came to the conclusion that he did not meet the Income Eligibility Requirement.
In 2020, Mr. Moncada applied for and received CRB for the four two-week periods from September 27, 2020 to November 21, 2020. Upon applying for the next CRB two-week period for November 22 to December 5, 2020, the CRA told Mr. Moncada he was being audited.
Mr. Moncada provided three invoices for general trade and renovation work for three clients, totaling $5,380 (which was his stated income in his 2019 tax return).
The officer conducting the first review of Mr. Moncada’s application determined in February of 2021 that Mr. Moncada was not eligible to receive the CRB on the basis that he did not reside in Canada and did not meet the Income Eligibility Requirement.
Mr. Moncada requested a second review in March of 2021. In the second review process, the Officer asked Mr. Moncada to obtain more evidence to corroborate he had performed the work he claimed he had performed. The Officer issues a refusal decision approximately five weeks after the work verification letter was requested.
The Officer refused the application on the basis that Mr. Moncada did not meet the Income Eligibility Requirement, stating that there was “insufficient doc’s to support income, ie bank stmt, ltrs of work verification.”
The Court indicated that the decision letter makes no mention of the three invoices filed by Mr. Moncada. Mr. Moncada’s invoices state who the service was for, the name of the applicant, the type of service rendered, and the amount charged for the service. The Officer did not list these invoices among the documentation reviewed in their notes that form part of the reasons for their decision.
A critical point is that one of the ways that the CRA guidelines “Confirming CERB, CRB, CRSB and CRCB Eligibility” (“CRB Guidelines”) state that a self-employed applicant may be able to show acceptable proof of income to meet the Income Eligibility Requirement is invoices for services rendered. It seems then that Mr. Moncada’s invoices could have satisfied this quite easily. But the Officer failed to explain any concern with the invoices Mr. Moncada provided, despite invoices being one of the ways an applicant can demonstrate fulfillment of the Income Eligibility Requirement. The Court found that a lack of justification for rejecting a form of proof contemplated by the CRB Guidelines can render a decision unreasonable.
The Court found that the Minister’s decision was unreasonable because it did not reference the invoices and therefore did not explain why the invoices were insufficient to meet the eligibility requirements.
Keep this in mind when challenging CRA Assessments. It is important to be aware of precisely what was reviewed during the assessment process.