Background
Fawwad Hussain Syed applied for and received the Canada Recovery Benefit (CRB) in 2020 and 2021. In May 2024, the Canada Revenue Agency (CRA) commenced a verification review. Following review, the CRA initially denied eligibility in November 2024, concluding that the applicant had voluntarily quit his employment, was not working for reasons unrelated to COVID-19, and had failed to seek alternative work.
The applicant requested a second review in November 2024 and submitted additional documentation. On October 7, 2025, a CRA officer upheld the denial, this time on the ground that the applicant lacked a 50% reduction in average weekly income attributable to COVID-19. The officer’s internal notes showed reliance on the finding that the applicant had quit his job after his hours were reduced and had pursued volunteer work and an unpaid internship rather than securing alternative employment.
The Court’s Holding
Justice D’Agostino allowed the application for judicial review and found the CRA’s decision unreasonable. The court held that the officer failed to meaningfully consider the applicant’s central submission that he did not voluntarily quit his employment but was forced to leave due to a substantial reduction in work hours by his employer. Although the officer’s internal notes acknowledged that the employer had reduced the applicant’s hours and recognized that the Record of Employment should have indicated “shortage of work” rather than “quit,” the officer nonetheless concluded the departure was voluntary and unreasonable.
The court applied the statutory language of section 3(1)(k)(i) of the Canada Recovery Benefits Act, which permits departure from employment only where “it was reasonable to do so.” The court distinguished the case from prior precedents (Bui and Li) where applicants had made clear voluntary choices unrelated to employer-directed reductions. Here, the applicant’s circumstances—graduated from Centennial College’s Architectural Technology program on April 16, 2021, and pursuing a relevant unpaid internship from May to August 2021—demonstrated a reasonable basis for the departure that the officer had failed to genuinely address. The court concluded the decision lacked the “justification, intelligibility and transparency” required under the Vavilov standard.
Key Takeaways
- CRA officers administering non-discretionary CRB eligibility criteria must apply the statutory reasonableness test meaningfully, engaging substantively with applicants’ explanations rather than dismissing departures from employment categorically.
- A departure prompted by an employer-directed reduction in work hours is distinct from a voluntary quit and must be assessed under the “reasonable to do so” exception, not treated as inherently unreasonable.
- Pursuit of unpaid educational or career-building opportunities immediately following graduation may constitute reasonable grounds for employment departure in the context of pandemic-related benefit eligibility, depending on the factual circumstances.
- CRA administrative decisions must be supported by reasoning that demonstrates genuine engagement with the applicant’s evidence and submissions; acknowledgment in internal notes of facts inconsistent with the decision’s outcome evidences unreasonableness.
Why It Matters
This decision clarifies the scope of judicial review over CRA determinations of Canada Recovery Benefit eligibility, a major pandemic-era assistance program. Although the CRB eligibility criteria are non-discretionary, the statutory requirement that employment departure be “reasonable” calls for individualized assessment rather than categorical exclusions. The decision restrains CRA from simply labeling departures as “voluntary” based on record-of-employment codes without examining the underlying circumstances that prompted the departure.
The ruling is significant for applicants who face CRB denials based on alleged voluntary quits, particularly those whose employment ended due to employer-directed hour reductions or layoffs, or who left employment to pursue education or career development during an economically disrupted period. It reinforces that administrative decision-makers must demonstrate genuine engagement with applicant submissions and that internal inconsistencies or failures to address key evidence will render a decision unreasonable on judicial review.