Canada Recovery Benefit (CRB)
This guide is a review of the Canada Recovery Benefits Act (CRBA) by the author written at a time when it has no court case 'track record' yet. The result is my honest commentary on how I think the courts will interpret the legislation.
LEGAL GUIDE (14 July 2021)
1. Perspective and Overview
4. Eligibility Duration
5. Tax Repayment of CRB
7. Seizure Protection
1. Perspective and Overview
The CRB (Canada Recovery Benefit) is a federal COVID-era program of income support. The closest we've come to it before (other than the similiar preceding federal 'CERB', also a COVID program) is the federal Employment Insurance (EI). Both the CRB and the CERB can be thought of as a rough 'n ready EI program, adding regular earnings loss eligibility for self-employed workers.
As such, several of the same policy issues that have arisen with EI arise with the CRB - such as 'voluntarily leaving employment' and 'refusal of employment', both of which I address below. The main EI policy document, which is quite good even for an advocate's perspective, is the Digest of Benefit Entitlement Principles (DBEP). The DBEP can be referred to for enlightenment on most CRB principles.
From my lawyer's perspective, the main thing about the CRB program is it's rudimentary nature in terms of administrative law, particularly appeal law. The material in the DBEP is a good comparator for that, evolved over decades of relatively intense administrative EI litigation - it shows how complex these issues can be when you really break them down.
The CRB legislation, the Canada Recovery Benefits Act ["CRBA"], doesn't even have any Regulations yet [though the Act empowers the federal Cabinet (the 'Governor-in-Council') to make them, and we can expect to see them as time goes on] - and that is just unheard of in administrative law statute regimes. The rudimentary nature of the program forces us into the under-recognized 'common law' of administrative law, that field which governs so much of our lives in Ontario from residential tenancies, to employment standards, to social assistance - and more. Those interested can start studying Administrative Law - especially 'procedural fairness'.
Over the years the legislature has taken much legal substance away from the courts (often with judicial relief) and relegated it to 'inferior' (an accurate term) administrative tribunals. So where we still see courts dealing with cases between millionaires (and billionaires) receiving the 'n'-th degree of natural justice over their commonly obscene wealth, we find social assistance recipients relegated (well before COVID) to 'phone-call hearings' - pleading to a piece of plastic and steel for crucial financial support before homelessness closes in on them. The law doesn't even afford appellants the dignity of their adjudicators even getting out of their office chairs any more before they learn their fate [... sensing a little frustration here?].
The CRB and COVID have - in a sense - gone some way to equalize these litigants (though not to any credit of the political and legal culture). Both Superior Court and Social Benefits Tribunal litigants alike are likely to find themselves facing 'electronic' (phone or ZOOM) hearings. CRB 'litigants' are among them now (as you will see below) - as soon as the Minister (of 'Employment, Workforce Development and Disability Inclusion') gets around to issuing 'reconsideration' forms to do it!
It's a brave new world that we'd all better face up to as best we can, because we don't really have any choice about it.
The CRB comes in two-week eligibility periods, with a week starting on a Sunday [CRBA s.2]. The amount of each period's payment is $1000 (with $100 tax deducted) [CRBA 8(1)] - so $900.
Recipients must re-apply every two weeks, essentially as a means-testing (ie. earning or related program money) measure. The joys of means-testing - so familiar to those of us on welfare, ODSP and EI - will come as a new-found experience to many. The CRB program is initially projected to be year-long [27 Sept 2020 to 25 Sept 2021] [CRBA 3(1)].
The balance of this section are the CRB eligibility criteria. Most recipients will recognize it from the 'attestation' check-box lists that they see when they sign onto their CRA account and apply. Borrowing from the style of social assistance law (where applications are taken as sworn affidavits to deter the ever-present 'risk of the poor lying'), the CRB designers have required recipients to verify (an 'attestation') - item-by-item - their eligibility for each and every criteria - each and every time.
This section is essentially an annotation of those criteria.
No surprise here, you're dealing with the federal government and money - so you have to provide your (valid) Social Insurance Number [CRBA s.3(1)(a), 25].
CRB recipients must be, an attest that they are, "at least 15 years of age on the first day of the two-week period" [CRBA 3(1)(b)].
(d) Residency and Presence In Canada
During the applicable two weeks, the recipient must be both 'resident' (normally resides in Canada) and physically 'present'.
There is some ambiguity here regarding 'presence', as the phrasing tolerates a person being present for part of the two-week period. By general (Driedger/Rizzo) principles of statutory interpretation the statement that: "My plane arrived from Cuba on 5 February so I was present in the eligibility period from 31 January to 13 February 2021" makes ordinary and grammatical sense. Expect this to be an issue. The recipient defence argument would be that the provision doesn't say: "during all the two-week period" - only "during the two-week period" - where it easily could have if that was meant.
Of course even if the applicant can prevail on the partial physical 'presence' in an eligibility period, they still have to deal with the s.2(i) "Recipient Must Have Sought Work" and s.2(j) "Recipient Must Be Available for Work", both of which also turn on the phrase: "during the two-week period". If your business is internet-based, which so many are nowadays, you may have an argument on this as well.
(e) Minimum Earnings in the 'Qualifying Period'
Like EI, the CRB regime has the concept of the 'qualifying period' - a period, and amount, of prior earnings that proves you lost something that can be compensated: DBEP: Qualifying Period.
The earning level applicable (ie. the 'qualifying period') is prior to the application - so for 2020 it is 2019, for 2021 it is 2020 - or alternatively for any application date (within the Sept-Sept 'CRB window'), it is "the 12-month period preceding the day on which they make the application".
The minimum required income level in any of these 'qualifying periods' is $5,000 total income [CRBA 3(1)(d,e)] (however, just what was meant by the term 'total income' has been the subject of much political grief, explained below in the Note).
The minimum required income level in a qualifying period is a total of:
(f) Earnings Reduction
- Self-Employment Earnings
This is net self-employment income, a concept familiar to most self-employed workers as the amount after expense deductions [CRBA 3(2): "income from self-employment is revenue from the self-employment less expenses incurred to earn that revenue"].
Note: The concept of 'total income' will be notoriously familar to almost all Canadians as the cause of the massive government-caused embarassment under the earlier CERB program, where everyone (quite reasonably) thought that 'total' was akin to the normal lay-understanding of "gross" - but rather instead it was the income tax concept of 'total income' (line 15000 on your 2019 tax return), which is generated in part by your net self-employment income. At the date of writing the government announced they had cancelled the earlier CERB claw-back that this error resulted in, no doubt after untold amounts of human anxiety and stress amongst Canadians at a time when they needed that the least. A class action has also been commenced.
- Employment Earnings
Following from the above political debacle, the issue naturally arises as to whether the 'employment earnings' is before or after source deductions (for income tax, EI and CPP premiums, health tax etc). As the figure used in "total income" (in income tax returns) is that from Box 14 of the T4 slips (line 10100 on your 2019 tax return) - and as Box 14 is 'gross' earnings (ie. prior to source deductions), then the higher figure is used.
This avoids a similar problem to that experienced with self-employment earnings. That is, even if the employment earnings were counted as the 'post-source deduction' figure (which is lower), if they were over $5,000 then a corrected figure would be even higher - so no "minimum required income level" problem occurs.
- EI and QPIP Pregnancy and Parental Benefits
Pregnancy and parental benefits under the Employment Insurance Act, both for employees and self-employed people.
"(A)ny other source of income that is prescribed by regulation".
This criterion is that "for reasons related to COVID-19" [other than child or family member care duties as set out in CRBA 17(1)(f)(i-ii)], they were "not employed or self-employed or they had a reduction of at least 50% ... in their average weekly employment income or self-employment income", in the two-week eligibility period. This non-earnings or reduction of earnings for 2020 relates to 2019, for 2021 it is 2020 - or alternatively for any application date (within the Sept-Sept 'CRB window'), it is "the 12-month period preceding the day on which they make the application".
In other words, if your earnings reduction is 50% or more from what you made on average in the 'last year' [ie. 2019, 2020 or "the 12-month period preceding the day on which they make the application", respectively], in the two-week eligibility period that you are currently applied for, then you are eligible. Again, the figures for self-employment earnings are net: CRBA 3(2).
The percentage of earning reduction may be varied by regulation [CRBA 3(4)].
(g) No Regular EI Eligibility
The applicant has no EI regular eligibility within the two-week period they apply for.
(h) No Care or Sickness Benefit Eligibility
The applicant has no QPIP, Canada recovery sickness benefit or a Canada recovery caregiving benefit eligibility within the two-week period they apply for.
These disentitling programs may be expanded by regulation.
(i) Recipient Must Have Sought Work
The recipient sought work during the two-week period, whether as an employee or in self-employment.
The DBEP section on this issue, at least with respect to employment, is here: Ch.9 - Refusal of Employment.
(j) Recipient Must Be Available for Work
The recipient "did not place undue restrictions on their availability for work during the two-week period, whether as an employee or in self-employment".
The DBEP section on this issue, at least with respect to employment, is here: Ch.10 - Availability.
"A person has not placed undue restrictions on their availability for work if they attended during the two-week period a course or program of instruction or training that they were referred to by a provincial government or body" [CRBA 3(3)].
(k) Voluntary Leaving
Unsurprisingly, EI law has provisions disentitling an applicant for 'voluntary leaving' a job: DBEP - Ch.6: Voluntary Leaving Employment.
I found a great deal of difficulty interpreting these voluntary leaving provisions [s.3(1)(k,l)] [see the actual text at Canada Recovery Benefits Act]. Even when I give them the benefit of the 'interpretive doubt' I still can't reach the CRA's interpretation [here: CRB website]. To give them the statutory interpretation that conventional doctrine calls for makes no policy sense, so the most generous practical conclusion that I can give them is that the CRBA was rushed through the legislative process, with all it's attendent flaws. Unfortunately, that doesn't help the necessary statutory interpretion that must be done.
. The Legislative Problems
Clauses 3(1)(k) and (l) are, like all of clauses (a-l) in s.3(1), necessary criteria of CRB eligibility. In other words, if they are not met (any of them) then CRB eligibility fails.
Both 3(1)(k) and (l) are essentially the same, differing only by (k) applying when an applicant has not yet collected CRB, and (l) applying when they have. This seeming unnecessary duplication is fairly common in legislative drafting when it is anticipated that one of the 'versions' will be repealed in future - here (k) when time passes and it becomes unnecessary to addresses the 'start up' of the CRB year [at 27 September 2020].
The stripped-down essence of these 'voluntary leaving' clauses (paraphrased) is this:
(k/l) an applicant has CRB eligibility, in the two-week eligibility period, when they have not:Note the numbered 'ands' - this is an 'and' semantic problem.
(i) quit, and (1)
(ii) refused work now, and (2) in the immediately past four periods.
The provisions make far more sense when and (2) is changed to an or. This results in a policy-sensible ten-week 'penalty' whenever a previously-'quit' employee turns down work, again. That is, the applicant gets one 'quit' for free, without harming their CRB eligibility - but on a single subsequent refusal to work, they run into the ten-week penalty. They must wait another four eligibility periods (each of two weeks each) in additional to the period that they applied in [(4 x 2) + 2 = 10].
The actual wording of (k,l), with it's and in position (2), requires a refusal both in the period of application and in the previous four periods. It is awkward and too-generous for no logical policy purpose.
There's more. If you look up that CRB link above they plainly interpret 3(1)(k,l) of the CRBA as meaning:
If you quit your job or stop working after September 27, 2020 and it was not reasonable to do so, you will no longer be eligible to receive any support through the Canada Recovery Benefit.This would be the result if and (1) was replaced by an or. It would result in total non-eligibility for any 'quit' in the CRB year. With respect to the government's laudable financial rescue efforts, I think their website is a mis-read of the provisions as they are passed into law - one that can't be salvaged by any amount of statutory interpretation gymnastics that you might care to throw at it.
The result is one goddawful mess. The best I can do is try to predict what a court would do with it, ie. something that is both policy-sensible and presents the least distortion to the text of the provisions. This follows as 'Simon's Best Guess'.
. 'Simon's Best Guess' on Voluntary Leaving
This is the best interpretation I can give these provisions, consistent with modern principles of statutory interpretation [Driedger, Rizzo and 'text, context and purpose']. It also is consistent with EI principles of qualified penalty for voluntary leaving available work.
Simply put, I read clauses 3(1)(k,l) of the CRBA, the provisions setting out the CRB law on 'voluntary leaving', as allowing an applicant one 'quit' ["quit their employment or voluntarily ceased to work"] without eligibility penalty - but imposing a ten-week (repeatable) penalty upon one refusal to accept available work.
These CRB provisions apply when the key events (quit and refusal) occur with the 'CRB year' [27 Sept 2020-25 Sept 2021]. Also, the ten-week (5 eligibility periods) 'voluntary leaving' penalty directly reduces eligibility duration [see s.4 below] [CRBA 9(3)] - eg. if a person had an initial 13 periods eligibility, one occurence of the penalty reduces it to 8 periods (13-5).
There are three forms of refusal:
As well, you need to remember that all quits and refusals are subject to a 'reasonable' standard, which is analogous to the law of constructive dismissal]. Thus if the work situation becomes intolerable (eg. COVID risk, sexual abuse, safety risk, etc), a 'reasonable' quit or refusal is excused - as if they didn't happen. See the DBEP for a more complete jurisprudence.
- failed to return to their employment when it was reasonable to do so if their employer had made a request,
- failed to resume self-employment when it was reasonable to do so, or
- declined a reasonable offer to work.
As of applications made 12 January 2021 (or later) [CRBA 5(5)], CRB applicants must not, at any time of the two-week application period, be either [CRBA 3(1)(m)]:
1. Be Under Quarantine or Isolation Order, Exception
Under any Quarantine Act order for quarantine or isolation, "as a result of entering into Canada", unless it was to:
. "receive a medical treatment that has been certified by a medical practitioner to be necessary", or
. "accompany a person who has been certified by a medical practitioner to be incapable of travelling without the assistance of an attendant and whose only reason for having been outside Canada was to receive a medical treatment that has been certified by a medical practitioner to be necessary";
2. Be Under Quarantine Order Caused by Isolation Requirement
"(I)f, as a result of entering into Canada, they were required to isolate themselves under such an order at any time during the two-week period, they are a person to whom the requirement to quarantine themselves under the order would not have applied had they not been required to isolate themselves."
The application for CRB is online through the CRA's: My Account system.
Applicants may apply for two-week eligibility periods during the 'CRB year', which runs from September 27, 2020 to September 25, 2021 [CRBA 4(1)]. "No application is permitted to be made on any day that is more than 60 days after the end of the two-week period to which the benefit relates." [CRBA 4(2)]
Applications must be done from scratch every two-week period, and the applicant must 'attest' (verify) all of the eligibility criteria [see s.2 above, "Eligibility"], each and every time [CRBA 5(1)].
There are some (perhaps pointless) exceptions to this rule [which excuse 'attestation' "if they have previously [or "never previously"] received any benefit under this Act and they attest to that fact"] [CRBA 5(2-4)]:
"The Minister must pay a Canada recovery benefit to a person who makes an application under section 4 and who is eligible for the benefit" [CRBA 7]
- the applicant's qualifying income [see 2(e) "Minimum Earnings in the 'Qualifying Period"];
- that they have "previously received any benefit" [see 2(k) "Voluntary Leaving"]; and
- that they have "never previously received any benefit" [see 2(k) "Voluntary Leaving"].
4. Eligibility Duration
The 'CRB year' was initially intended to run from 27 September 2020 to 25 September 2021, a period of 26 CRB eligibility periods (52 weeks). The legislation now [as of CRB Reg 2021-35, and Reg 2021-164 (at 24 June 2021)] allows for applicants to collect CRB for 21 periods (the 'eligibility duration'), in an order of collection varying with their financial need. This eligibility duration is also deducted by a factor of one CRB eligibility period for every 2 weeks of collection of regular EI benefits eligibility in the CRB year - essentially trading off a CRB-EI time period equally if the applicant had EI eligibility (ie. if the applicant had EI eligibility they had to take it in preference to the CRB) [CRBA 9(1)].
Eligibility duration is also reducable by the ten-week (5 eligibility periods) 'voluntary leaving' penalty (repeatable) explained in s.2(k) above [CRBA 9(3)].
5. Tax Repayment of CRB
If the applicant has 'income' in 2020 or 2021 above $38,000, then any amount above that shall be applied at a 50% rate to repay their total amount of CRB received for the applicable year. The CRB repayment goes all the way to zero if their income is sufficient, but otherwise repayment is not required [CRBA 8(2,4)].
For these purposes, 'income' (under Part I of the ITA) is calculated [CRBA 8(3)]:
- by not counting any CRB amounts;
- by counting 'split income' under ITA 20(1)(ww);
- by counting deductions under ITA 60 as follows:
. (v.1) UI and EI benefit repayment,
. (v.2) Canada Recovery Benefit Repayment,
. (w) Tax under Part I.2 (Tax on Old Age Security Benefits),
. (y) Repayment of UCCB, and
. (z) Repayment under the Canada Disability Savings Act.
- by not counting "gain from a disposition of property" [for this purpose "property" does not include money or "indebtedness owed by or guaranteed by the government of a country, or a province, state, or other political subdivision of that country"]; and
- by not counting income under 56(1)(q.1) [Registered disability savings plan payments] or 56(6) [Child care benefit].
An essential issue for anyone involved with a CRB dispute with the government is appeal rights. Technically, the CRB program has no 'appeal rights', as that term is commonly (and in this case, accurately) used. While the CRB system has something akin to an appeal (called a 'reconsideration'), it is much less like any appeal system that the reader will be familar with, such as the EI Board of Referees system or the Ontario Social Benefits Tribunal for social assistance recipients.
The CRB reconsideration system is very political, meaning it's not designed with the independence of administrative tribunals in mind. In fact, there isn't even a tribunal, as reconsiderations are decided by the federal "Minister of Employment, Workforce Development and Disability Inclusion" (although practically almost always by a staff designee).
As well, a reconsideration is rudimentary in terms of administrative law - with only one level of procedure, and no statutory requirement of any hearing of any sort. The common law may require some aspects of procedural fairness (such as a hearing) under principles from Baker v. Canada (Minister of Citizenship and Immigration (SCC, 1999), but that is yet to be seen by a court case. As it stands now, after the reconsideration stage the law forces the applicant to pursue a court-based judicial review, a much more elaborate, cumbersome and inaccessible remedy.
The fact that a reconsideration is commenced by an applicant's 'request' should give you a sense of the very limited nature of a reconsideration, you get to ask - and the Minister does have to answer you [CRBA 31(3)] - but that's about it in terms of natural justice and procedural fairness. Can you spell it?: R-U-D-I-M-E-N-T-A-R-Y.
(b) Reconsiderations by the Minister
The Minister "may reconsider an application for benefits under this Act" [CRBA 30(1)]. "If the Minister decides that a person has received money by way of benefits under this Act to which they were not entitled, or has not received money to which they were entitled, the Minister must calculate the amount of the money and notify the person of the Minister’s decision" [CRBA 30(2)].
If the Minister determines that an amount of CRB should not have been paid to a person, "the person must repay the amount of the payment or the excess amount, as the case may be, as soon as is feasible" [CRBA 28,30(3)]. Similarly, if a person was entitled to CRB and not paid, that amount is payable to the person [CRBA 30(4)].
The normal time limit for the Minister to commence a 'reconsideration' is "36 months after the benefits have been paid" [CRBA 30(1)]. This is subject to an extension to 72 months, "(i)f, in the opinion of the Minister, a false or misleading statement or representation has been made in connection with an application for benefits under this Act" [CRBA 30(5)].
These provisions show the raw state of CRB administrative law, with the Minister themselves acting as both adjudicator and effectively as a party who can commence a reconsideration.
(c) Requests for Reconsideration by Applicants
"A person who is the subject of a decision of the Minister made under this Act" (usually applicants) may request a reconsideration by the Minister "in the form and manner established by the Minister", "at any time within 30 days after the day on which they are notified of the decision or any further time that the Minister may allow" [CRBA 31(1)]. Parties to a reconsiderations can include non-applicants (such as financial institutions and employees) under the garnishment provisions (see s.8 'Enforcement, below) [CRBA 29, 31(2)].
The Minister must review, "confirm, vary or rescind" and notify the reconsideration requester of their decision [CRBA 31(3,4)].
The following webpage appears to be the 'form and manner' for reconsiderations opted for by the federal government (thanks to reader Michael), and it operates through the taxpayer's personal CRA My Account.
What you can do if your application is denied [scroll down]
The webpage also confirms that further legal recourse after the 'reconsideration' lies by way of federal judicial review:
If the second review is denied
If you disagree with the result of the second review, you may apply to the Federal Court for a judicial review of the CRA decision within 30 days of the date you received the second review decision.
7. Seizure Protection
Some limited protections are accorded the applicant from seizure of their CRB (eg. by judgment creditors), though these seizures are normally done under provincial law (in Ontario, rules under the Courts of Justice Act), and they may be read-down by the courts accordingly to aspects only within federal jurisdiction.
I have not explored this complex issue any further (especially the fate of such funds when they are deposited in a bank or similar financial institution) but these protections read on their face as follows [CRBA 27]:
27 A benefit under this ActSection 27(a) may to protect a current bankrupt's CRB from seizure by the trustee, as bankruptcies are entirely within federal jurisdiction. Section 27(d)'s exclusion of federal "Family Orders and Agreements Enforcement Assistance Act" does suggest that other garnishments of CRB are not protected.
(a) is not subject to the operation of any law relating to bankruptcy or insolvency;
(b) cannot be assigned, charged, attached or given as security;
(c) cannot be retained by way of deduction, set-off or compensation under any Act of Parliament other than this Act; and
(d) is not garnishable moneys for the purposes of the Family Orders and Agreements Enforcement Assistance Act.
The CRB program has a range of verification powers with respect to applicants, such as [CRBA 6,26,40]:
- info and document demands;
- in-person and electronic appearances re info and documents; and
- investigator authority.
The Minister may enforce any CRB debts owing by garnishment of a financial institution (bank account) or an employer's wages [CRBA 29].
(c) Certificates of Debt
The Minister may certify a CRB debt owing, and when registered in the Federal Court the certification has the same authority as a court order [CRBA 32].
(d) Court Actions
The Minister may sue to recover a CRB debt within six years [CRBA 33(1)], or set-off without time limit [CRBA 33(2)].
(e) Administrative Penalties
Like many administrative systems nowadays, the Minister may assess non-court administrative fines for CRB violations [CRBA 35-38].
Court offences also exist, prosecutable under the Contraventions Act [CRBA 39].
(g) Quarantine Evidence
The Minister of Health may, for verification purposes, "disclose to the Minister personal information obtained under the Quarantine Act in respect of any person who is required to quarantine or isolate themselves under any order made under that Act as a result of entering into Canada, including [CRBA 26.1]:
. their name and date of birth;
. the date they entered into Canada; and
. the last day on which they are or were required to quarantine or isolate themselves."