Background
Yuan Li, a warehouse worker, voluntarily quit his full-time job in July 2020 citing two reasons: his spouse had enrolled in a full-time study program and pandemic-related childcare closures left him as the sole caregiver for two young children, and his fear of contracting COVID-19 while working in-person. He transitioned to part-time delivery work through Instacart, resulting in significantly reduced income. He applied for and received the Canada Emergency Response Benefit (CERB) for one benefit period in late 2020, and the Canada Recovery Benefit (CRB) for multiple periods from October 2020 through July 2021.
Three years later, the CRA launched a review of Li’s eligibility. A First Level Reviewer found him ineligible for both programs primarily because he had not provided requested invoices and expense reports to document his Instacart income. Li requested a second review, at which point his Record of Employment confirmed he had quit his warehouse job rather than being laid off — a fact inconsistent with statements he had made to CRA officials during earlier interactions. A Second Level Reviewer denied both claims, concluding Li had quit voluntarily and not for COVID-19-related reasons, without conducting any income calculation.
Li, self-represented, sought judicial review of both decisions before the Federal Court. The Crown conceded during proceedings that the Second Level Reviewer had made legal errors in the CRB analysis, including relying on a voluntary-quit provision that only applies to departures on or after September 27, 2020 — whereas Li had quit before that date.
The Court’s Holding
Justice Grant granted the application in part. On the CRB, the Court found the Second Level Review decision unreasonable on both grounds: the reviewer had not performed any income calculations (thereby erring on the income-reduction finding), and had misapplied paragraph 3(1)(k) of the Canada Recovery Benefits Act by treating Li’s pre-September 27, 2020 resignation as a disqualifying voluntary cessation of work, when that provision only covers resignations on or after that date. Both errors were conceded by the Crown. The CRB matter was remitted to a different CRA reviewer for redetermination.
On the CERB, the Court dismissed the application. Under section 6(1)(a) and subsection 6(2) of the Canada Emergency Response Benefit Act, a worker is ineligible if they voluntarily quit their employment. The Court found it was reasonable for the Second Level Reviewer to conclude Li’s resignation was voluntary, even though his decision to quit was influenced by pandemic circumstances. The Court noted that Li’s statements to CRA officials had been inconsistent — at various points characterizing his departure as a layoff or job loss rather than a resignation — and that these apparent misrepresentations weakened his procedural fairness argument.
On procedural fairness, the Court rejected Li’s submission that he had been ambushed by the Second Level Reviewer’s focus on the voluntariness of his resignation. Given that the level of procedural protection owed to CERB and CRB applicants is at the low end of the spectrum and that Li had received explanations of the general eligibility criteria across multiple CRA interactions, the Court held the process was fair. No costs were awarded given Li’s mixed success.
Key Takeaways
- The voluntary-quit bar in paragraph 3(1)(k) of the CRB Act applies only to resignations on or after September 27, 2020; the CRA cannot use a pre-cutoff resignation to deny CRB eligibility under that provision.
- Quitting a job due to fear of COVID-19 or pandemic childcare burdens still constitutes voluntary resignation under subsection 6(2) of the CERB Act, barring CERB eligibility — personal motivation does not transform a quit into an involuntary cessation of work.
- A CRA second-level reviewer who denies benefits without performing any required income calculations makes a reviewable error, and the Crown will typically concede the point.
- Self-represented claimants who give inconsistent accounts to government reviewers about why they left employment may find those inconsistencies weigh against both their substantive and procedural fairness arguments on judicial review.
Why It Matters
This decision illustrates that even years after the pandemic benefit programs closed, CRA eligibility reviews and the resulting denials remain live litigation. For practitioners advising clients facing CRA reassessments of CERB and CRB payments, the case confirms that the temporal scope of each eligibility criterion matters: reviewers must apply the correct statutory provision to the correct time period, and failures to do so are unreasonable. The remittance of the CRB claim also signals that income-based eligibility grounds cannot simply be assumed — they require actual calculation.
More broadly, the decision reinforces the line drawn by the Federal Court in earlier pandemic-benefit cases between employees who were involuntarily displaced by COVID-19 and those who chose to leave work for pandemic-adjacent reasons. Workers who voluntarily resigned — even for understandable reasons such as health anxiety or caregiving needs — face a significant statutory hurdle under the CERB Act that courts have consistently declined to soften through purposive interpretation.