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Canada Recovery Benefit (CRB) (1). Elykova v. Canada (Attorney General)
In Elykova v. Canada (Attorney General) (Fed CA, 2025) the Federal Court of Appeal dismissed an appeal, here from "consolidated application for judicial review of two decisions" where "the CRA found Ms. Elykova ineligible for the Canada Recovery Benefit. In the other, it found her ineligible for the Canada Worker Lockdown Benefit".
Here the court refused to allow in subsequent income tax re-assessments (issued after the CRB decisions) even though they now met the CRB "minimum $ 5,000 of employment income or net self-employment income". I suspect I would have differed in the result, as re-assessments are a statutory right (commonly used by tax-payers) justifying an exception to the typical restricted JR evidence record doctrine which this court tolerated in the lower JR court:[1] Ms. Elykova appeals from a judgment of the Federal Court (per Whyte Nowak J.) dismissing her consolidated application for judicial review of two decisions (the Decisions) by the Canada Revenue Agency (the CRA): Elykova v. Canada (Attorney General), 2024 FC 964. In one decision, the CRA found Ms. Elykova ineligible for the Canada Recovery Benefit. In the other, it found her ineligible for the Canada Worker Lockdown Benefit. In each case, following reviews by two different CRA agents (the first and second reviewers), the CRA decided that she had not met the requisite income criteria to qualify for these benefits. Specifically, she had not demonstrated that she had earned the minimum $ 5,000 of employment income or net self-employment income in 2019, 2020 or in the twelve months before her first application, as required by the Canada Recovery Benefits Act, S.C. 2020, c. 12, s. 3(1) and the Canada Worker Lockdown Benefit Act, S.C. 2001, c. 26, s. 4(1).
[2] Before the Federal Court, Ms. Elykova argued that the Decisions were unreasonable because they did not account for new evidence that postdated the Decisions. In particular, she claimed that the notices of reassessment for the 2019, 2020 and 2021 tax years (the corrected tax information), issued by the CRA after the Decisions were made and based on amended tax returns that she had filed, showed that she met the income criteria and qualified for the benefits. She argued that the CRA’s refusal to hold a third review, taking into account the corrected tax information, was unreasonable and procedurally unfair. She also submitted that, given the language barriers created by her limited proficiency in English, the CRA’s review process, which involved unannounced phone calls from CRA reviewers, had prevented her from knowing the case she had to meet.
[3] The Federal Court held that Ms. Elykova had failed to establish that the Decisions were unreasonable. It excluded the corrected tax information based on the well-known principle that a reviewing court is generally required to only consider the evidentiary record that was before the administrative decision maker when it made the decision under review: Association of Universities and Colleges of Canada v. Canadian Copyright Licensing Agency, 2012 FCA 22, 428 F.T.R. 297 at para. 19 [Access Copyright]. It decided that, since the corrected tax information was not before the second reviewer when the Decisions were made, and either did not fall within any of the exceptions to the general principle or was of no assistance to the Court in determining the issues to be decided, it could not form the basis for a finding that it was unreasonable for the second reviewer not to have considered it. The Federal Court also rejected Ms. Elykova’s submission that the CRA’s review process was procedurally unfair. It was satisfied on the record before it that Ms. Elykova knew the case she had to meet and had been given an opportunity to meet it, and that it was not procedurally unfair for the CRA to have refused to hold a third review.
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[6] In my view, Ms. Elykova has not met her burden of showing that the Decisions are unreasonable: Vavilov at para. 100. It was not unreasonable for the CRA to decide, based on the evidence that was before it when it made the Decisions, including the information it had on file, information gleaned from telephone conversations with Ms. Elykova, and the written submissions and documents that she had provided, that she was ineligible for the benefits. Indeed, Ms. Elykova conceded before this Court and before the Federal Court that the Decisions were reasonable unless the corrected tax information was considered. The Federal Court properly applied the Access Copyright principles to exclude this information, which was not before the CRA when it made the Decisions.
[7] Ms. Elykova has not persuaded me that the CRA’s review process violated procedural fairness. The record shows that she knew the case to meet and that she was given, and took advantage of, a full and fair chance to respond. The CRA’s decision letter following the first review informed her that she was ineligible on the basis that her income was insufficient and constituted clear written notice of the case to meet. When the reviewers asked her for additional evidence of self-employment income to support her application for the benefits, she responded by providing such evidence. The record also reveals that she was able to overcome her language barrier in several of her interactions with the CRA by securing the assistance of her accountant and another third party. In sum, the CRA afforded Ms. Elykova several opportunities to supply evidence of her income to qualify for the benefits. Procedural fairness did not require the CRA to provide her yet another review. . Hu v. Canada (Attorney General)
In Hu v. Canada (Attorney General) (Fed CA, 2024) the Federal Court of Appeal dismissed an appeal, this from a dismissal of a JR at the Federal Court, and this from the denial of an administrative review "which determined that she was ineligible for the Canada Recovery Benefit (CRB)".
The CRB statute has seen few cases in the appeal courts, and this is illustrative of this temporary COVID regime:[1] The appellant, Ms. Hui Ping Hu, appeals from a decision of the Federal Court (2023 FC 1590, per Ahmed J.) dismissing her application for judicial review of a second-level decision of the Canada Revenue Agency (CRA) which determined that she was ineligible for the Canada Recovery Benefit (CRB) — a program introduced under the Canadian Recovery Benefits Act, S.C. 2020, c. 12, s. 2 — on the grounds that she had failed to meet one of the program’s conditions, being that she had not earned at least $5,000 (before taxes) of employment or net self-employment income in 2019, 2020, or in the 12 months prior to the date of her first application (the minimum applicable income during the relevant period).
[2] Ms. Hu claims to operate a daigou business in Canada, buying local commodities such as medication, sweets, clothing and other items, and selling them to customers in China. Ms. Hu undertakes her activities via a WeChat group named "“Happily shopping in Canada”", using WeChat Pay, a payment feature integrated within the WeChat app which allows Ms. Hu to make purchases for her customers and receive payment from them. Through Ms. Hu’s WeChat wallet, the app is able to generate transaction history reports and statements from Chinese Banks to which the WeChat account is linked. According to Ms. Hu, no formal invoices are generated through WeChat Pay and, in any event, none is required for her to receive payment from her customers.
[3] In July 2020, Ms. Hu applied for the CRB and began receiving CRB payments in October 2020, which continued for 26 two-week periods ending in October 2021. In December 2020, Ms. Hu’s file was selected for eligibility review and she proceeded to prepare and submit documents in support of her claim. One of the documents — referred to as Exhibit E and submitted in June 2022 — was an Excel spreadsheet prepared by Ms. Hu using the customer payment information from her WeChat wallet. The financial information on Exhibit E is mostly in English, however the information relating to the names of her customers and the items she purchased for them is mostly in Chinese. Another set of documents submitted by Ms. Hu — referred to as Exhibit F — were screenshots of her WeChat wallet showing purchases she purports to have made for her customers. In addition, the CRA had access to Ms. Hu’s 2018 Notice of Assessment showing income of $5,171 and her 2019 Notice of Assessment showing income of $8,238.
[4] In July 2022, the CRA informed Ms. Hu that she was ineligible for the CRB, as she had not established that she had earned the minimum applicable income during the relevant period. It would seem that Ms. Hu, who claims she prepared her own tax returns, was reporting her income not as self-employment income but rather as Other Income.
[5] In August 2022, Ms. Hu requested a second review, and proceeded to file a series of additional documents, mostly in Chinese, in support of her claim that her daigou business was not simply casual, but a true business undertaking, and that she met the minimum net-revenue threshold requirements. Following a telephone conversation later that month with the CRA Benefits Compliance Officer tasked with the second review (the second reviewer), Ms. Hu provided English translations of documents identified by the second reviewer. According to Ms. Hu, no request was made to translate Exhibits E and F. On September 3, 2022, Ms. Hu submitted further documents, including, amongst other things, a letter from her freight forwarder confirming she was a client (however without attaching the freight transaction history that had been requested by the CRA), a translated spreadsheet of WeChat screenshot income statements for 2019 and a payment transaction report in support of Exhibit E. More documents followed about two weeks later, including credit card statements, bank statements from the Bank of China, and what seems to be screenshots from the WeChat revenue figures and customer lists.
[6] On September 20, 2022, the second reviewer communicated with Ms. Hu and indicated that although a voluminous set of documents had been filed by Ms. Hu, she, the second reviewer, was unable to match up the documents so as to confirm that Ms. Hu had in fact started a daigou business in 2018 and was therefore self-employed. In response, Ms. Hu submitted a further summary of her customer purchases about a week later. However, on October 6, 2022, the second reviewer confirmed that Ms. Hu was ineligible for the CRB (the second-level decision). From the relevant entries in the Special Assessment Observations notepad reproduced by the second reviewer in the Special Assessment Observations, it seems that the second reviewer was simply unable to match up the documents submitted by Ms. Hu and was thus unable to determine that Ms. Hu indeed earned at least the minimum applicable income—applicable as self-employed income—during the relevant period.
[7] On November 4, 2022, Ms. Hu filed an application for judicial review of the second-level decision (the Notice of Application); although her Notice of Application only identified the second-level decision as forming the subject matter of her proceeding, it does make passing reference to Ms. Hu also seeking a determination regarding her eligibility for the Canada Worker Lockdown Benefit (CWLB). The Federal Court dismissed Ms. Hu’s application for judicial review. Although expressing sympathy for Ms. Hu, the Federal Court eventually determined that there was nothing unreasonable with the second-level decision given the evidence before the second reviewer at the time. The Federal Court accepted the second reviewer’s conclusion that Ms. Hu failed to provide the necessary evidence to establish that she earned the minimum applicable income during the relevant period. The Federal Court also refused to allow Ms. Hu to introduce new evidence, determining that the evidentiary record was to be restricted to that which was before the second reviewer, and that none of the exceptions outlined in this Court’s decision in Association of Universities and Colleges of Canada v Canadian Copyright Licensing Agency (Access Copyright), 2012 FCA 22 [Access Copyright] were applicable. The Federal Court also dismissed Ms. Hu’s assertion that she was treated unfairly—a purported breach of procedural fairness—when the second reviewer found that Ms. Hu was unable to provide Canadian bank statements and invoices to match her documentation despite her having provided evidence to demonstrate her business income. Finally, as for the passing reference to the CWLB in the Notice of Application, the Federal Court stated simply that the matter involving CWLB was not before it.
[8] Ms. Hu now appeals to this Court seeking to set aside the Federal Court decision, while also seeking to introduce fresh evidence in the process. The fresh evidence includes English translations of Exhibits E and F — which Ms. Hu claims are the documents which establish her eligibility for the CRB — requests for adjustments to her Income Tax Returns filed on December 9, 2022 (about a month after Ms. Hu filed her Notice of Application), customer invoices which Ms. Hu conceded were prepared for the purposes of supporting her claim before the Federal Court, her 2019 Notice of Reassessment dated January 30, 2023 (issued after the filing of the Notice of Application but nearly 9 months prior to the hearing before the Federal Court), additional screenshots of Ms. Hu’s WeChat account, spreadsheets she created supposedly to consolidate her account activity, and additional invoices for purchases made on behalf of her customers.
[9] As a result of Ms. Hu’s motion under Rule 343(3) of the Federal Courts Rules, S.O.R./98-106 (the Rules), on March 28, 2024, and while noting this part of Ms. Hu’s motion was not challenged by the respondent, this Court allowed Ms. Hu to include in the Appeal Book the requests for adjustments to her Income Tax Return filed on December 9, 2022, as well as some of the translated screenshots showing expenditures Ms. Hu incurred on behalf of her customers. Two other sets of documents were disallowed. The remaining documents were to be included in a separate Supplemental Appeal Book for determination of their inclusion by the panel hearing the appeal (‘Namgis First Nation v. Canada (Fisheries and Oceans), 2019 FCA 149 [‘Namgis First Nation], at paras. 19 and 20).
[10] As regards the new documents, it is now well-established that any new evidence before this Court meant to supplement the record for judicial review purposes is fresh evidence that can be admitted only under the relevant test set out in Palmer v. The Queen, [1980] 1 S.C.R. 759, 1979 CanLII 8 (SCC) (see ‘Namgis First Nation, at para. 16); that the evidence (1) could not have been adduced at trial with the exercise of due diligence; (2) is relevant in that it bears on a decisive or potentially decisive issue on appeal; (3) is credible in the sense that it is reasonably capable of belief; and (4) is such that, if believed, could reasonably have affected the result in the court below (Palmer at 775).
[11] In short, Ms. Hu has not shown special circumstances in which the Court may grant leave to a party to present evidence on appeal pursuant to Rule 351, in line with the bases for admission of fresh evidence set out in Palmer (‘Namgis First Nation, at para. 25). I am not convinced that Ms. Hu was not reasonably able, with the exercise of due diligence, to adduce the fresh evidence before the second reviewer or the Federal Court. Ms. Hu argues that the English translations of Exhibit E and F are necessary because the second reviewer failed to request them, although the second reviewer did ask for translations of other documents. However, it seems likely that the second reviewer did not ask Ms. Hu to translate Exhibits E and F because it was not necessary for her purposes given that significant portions of the documents were already in English. As for the remaining documents, I have not been convinced they are decisive or potentially decisive on any issue in the present appeal, or that the Court should exercise its residual discretion to admit them as fresh evidence in the interest of justice.
[12] Turning now to the ultimate decision of the Federal Court, there is no dispute that in an appeal from a judicial review decision of the Federal Court, this Court must "“step into the shoes”" of the Federal Court and determine whether the Federal Court correctly selected and applied the standard of review (Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36 at para. 46). Here, the Federal Court correctly identified the standard of review applicable on judicial review, being one of reasonableness, and proceeded to apply that standard correctly (Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 at para. 16). Ms. Hu argues that her evidence, in particular Exhibits E and F, establishes that she earned at least the minimum applicable income during the relevant period. In essence, Ms. Hu is asking this Court to reweigh the evidence, and even more, to reconsider the matter based on new evidence that was not before the second reviewer or the Federal Court. As stated by Justice Stratas in ‘Namgis First Nation, at paragraph 16: "“The first-instance reviewing court was the forum for building the record for the application for judicial review. The appellate court is not such a forum.”" I understand that Ms. Hu is displeased with the second-level decision and wishes for this Court to reassess her claim, with fresh evidence in hand. However, as Justice Ahmed had rightly noted, it was not for the Federal Court to reweigh the evidence on judicial review. It is even less so the role of this Court.
[13] Nor has Ms. Hu convinced me that the Federal Court’s determination on the procedural fairness issue requires this Court’s intervention. Before the Federal Court, Ms. Hu claimed that the CRA treated her unfairly because she could not provide Canadian banking statements and invoices to match her documentation. Before this Court, Ms. Hu claims that the CRA breached its duty of procedural fairness by not accepting her documents as substantiating her claim and by not assisting her more with identifying how best to present her claim. Although I appreciate the CRA’s own guidelines call for Benefits Compliance Officers to work with claimants to identify documents which best support their claim for CRB payments, here, the evidence suggests the second reviewer did just that.
[14] In the end, the Federal Court determined that the second-level decision was not unreasonable, and Ms. Hu has simply been unable to point me to any reviewable error on the part of the Federal Court that would permit this Court to intervene.
[15] As to Ms. Hu’s claim that the Federal Court erred in not addressing her eligibility to the CWLB, I note Rule 302 which limits an application for judicial review to a single order. I also note the fact that Ms. Hu never sought a second review of the first-level decision denying her eligibility to CWLB, and thus never exhausted her administrative remedies in respect thereto (Canada (Border Services Agency) v. C.B. Powell Limited, 2010 FCA 61, at paras. 30 to 33). Moreover, the evidence suggests that Ms. Hu herself acknowledged she was not eligible for CWLB, which may explain why she never proceeded to request a second-level review of that decision. In any event, the issue was addressed by the Federal Court and I see no reviewable error in respect thereof.
[16] Consequently, I would dismiss Ms. Hu’s appeal. The Attorney General of Canada advises that he is no longer seeking costs in the matter, and thus I would award none.
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