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EI - CRA Rulings. Furtado v. Canada (Attorney General)
In Furtado v. Canada (Attorney General) (Fed CA, 2026) the Federal Court of Appeal dismissed a JR, here brought against "a decision of the Appeal Division of the Social Security Tribunal (SST)" which allowed the appellant's appeal in part "but confirmed the General Division’s finding that settlement funds (Settlement Funds) received by Mr. Furtado following his termination of employment were "“earnings”" within the meaning of subsection 35(2) of the Employment Insurance Regulations, SOR/96-332".
Here the court considers the EI concepts of 'earnings' and 'insurable earnings':[4] Mr. Furtado’s principal submission is that the Appeal Division erred in concluding the Settlement Funds were "“earnings”" for purposes of subsection 35(2) of the EI Regulations. He relies on a ruling by the Canada Revenue Agency (CRA Ruling) that, while vacation pay and pay-in-lieu of notice received following his termination were "“insurable earnings”", the Settlement Funds were not. Mr. Furtado argues in his written submissions that the SST (General and Appeal Divisions) was bound to follow the CRA Ruling and its refusal to do so was an error of jurisdiction. In oral submissions, Mr. Furtado made clear that the CRA Ruling was not binding on the SST but argued that the Appeal Division’s departure from its analysis was unreasonable.
[5] The CRA Ruling was requested under subsection 90(1) of the Employment Insurance Act, S.C. 1996, c. 23. Subsection 90(1) contains an exhaustive list of matters that fall solely to the CRA to determine, including the amount of an individual’s "“insurable earnings”" (subsection 90(1)(c); see TN v Canada Employment Insurance Commission, 2019 SST 957 at para. 32) but there is a distinction between "“insurable earnings”" and "“earnings”". Critically, the CRA’s authority does not extend to a determination of "“earnings”" under subsection 35(2) of the EI Regulations. Rather, the calculation of "“earnings”" is within the jurisdiction of the Canada Employment Commission and, on appeal, the SST.
[6] The Appeal Division accepted that the SST was bound by the CRA’s conclusion that the Settlement Funds were "“insurable earnings”" under section 2 of the Insurable Earnings and Collection of Premiums Regulations, SOR/97-33; however, the Appeal Division found that the CRA Ruling was not applicable to calculating "“earnings”" under subsection 35(2). We find no error in the Appeal Division’s finding in this regard.
[7] We also find that the Appeal Division reasonably concluded that the Settlement Funds were "“earnings”" under subsection 35(2) despite Mr. Furtado’s very able arguments to the contrary. The Appeal Division’s decision is well-reasoned and consistent with the relevant legislative, jurisprudential and factual constraints in this case. It does not lack transparency, justification or intelligibility (Vavilov at para. 86).
[8] Mr. Furtado relies on the CRA’s rigorous total relationship approach, analysis of two separate payment periods and conclusion that there was no contract of service between him and his employer after his termination. However, the Appeal Division emphasized that the term "“earnings”" under subsection 35(2) is broad and includes, "“the entire income of a claimant arising out of any employment”". The Appeal Division found that the Settlement Funds ‘arose’ from Mr. Furtado’s contract of service because, but for his employment contract, he would not have received the Settlement Funds. This finding does not conflict with the CRA’s analysis and conclusion that there was no contract of service post-termination, and it was not unreasonable or inconsistent with the authorities Mr. Furtado cited. . Chen v. Canada (Attorney General)
In Chen v. Canada (Attorney General) (Fed CA, 2025) the Federal Court of Appeal dismissed an appeal, this from a dismissed JR of "a decision of the Social Security Tribunal (Tribunal) [which] ... dismissed the appellant’s request for leave to appeal a decision of the General Division, which determined it had no jurisdiction to deviate from the Canada Revenue Agency’s (CRA) ruling that Mr. Chen was not eligible for employment insurance and benefits":[2] ... during the course of the proceedings before the General Division, the Tribunal member asked the Canadian Employment Insurance Commission (Commission) to seek a ruling from the CRA on the question of whether the appellant was an employee with insurable earnings. The CRA found that the appellant was neither an employee nor self-employed within the meaning of subsection 152.01(1) of the Employment Insurance Act, S.C. 1996, c. 23 (EIA). On the basis of that ruling under section 90 of the EIA, the General Division dismissed the appeal of the Commission’s refusal.
[3] On appeal, the Appeal Division concluded that Mr. Chen had not received a fair hearing and remitted the matter back to the General Division for reconsideration.
[4] On reconsideration, the General Division held that it was bound by the CRA’s decision on whether Mr. Chen had insurable employment. Citing Attorney General of Canada v. Romano 2008 FCA 117, the General Division noted that Mr. Chen’s only recourse was to appeal the CRA’s insurability decision to the CRA. Mr. Chen did not appeal.
[5] Mr. Chen sought leave to appeal the General Division’s decision. The Appeal Division denied this request on the basis that Mr. Chen’s appeal had no chance of success.
[6] The Federal Court concluded that the Appeal Division’s decision to dismiss the application for leave to appeal was reasonable and dismissed the application for judicial review. We agree with the analysis of O’Reilly J. I would dismiss this appeal for substantially the same reasons given by the Federal Court judge.
[7] The essence of the appellant’s appeal is that the General Division incorrectly concluded that it had jurisdiction to request that the Commission seek a ruling from the CRA. He argued that the Commission could do so only on its own initiative, not in response to a request from the General Division. However, as the Federal Court judge noted, there are no restrictions on when or how a CRA ruling is sought, and the Commission can ask for a ruling "“at any time”" (Chen, at para. 13 citing the EIA, ss. 90(1-2), 90.1). Only the CRA can determine a claimant’s hours of insurable employment under subsection 90(1) of the EIA. Similarly, subsection 64(3) of the Department of Employment and Social Development Act, S.C. 2005, c. 23 provides that all questions of employment insurability arising in an application or appeal before the Tribunal must be resolved by an authorized CRA officer. Insurability rulings may be appealed to the Minister of National Revenue (Minister), and subsequently to the Tax Court of Canada (EIA, ss. 91, 103(1)).
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