Background
Emily Parsons, a Canadian now living in the United Kingdom, applied for the Canada Emergency Response Benefit (CERB) in April 2020 while employed at both a pharmacy and a dance studio. She received CERB payments across several periods between March 2020 and September 2020. In 2022, the Canada Revenue Agency (CRA) sought documents to verify her eligibility, but the correspondence went unnoticed until March 2024 because it was sent to her mother’s address in Canada. After Ms. Parsons submitted pay stubs, bank statements, and employment records in response, the CRA conducted two reviews.
Following her second review request, a CRA officer found in July 2025 that Ms. Parsons was eligible for the CERB during most periods but ineligible during the fifth and sixth CERB periods (July 5 to August 29, 2020). The officer concluded that she had earned more than the $1,000 income threshold permitted under the Canada Emergency Response Benefit Act and its regulations during those periods, and that her reduced hours were not caused by COVID-19. To reconcile the mismatch between her pay periods and the CERB eligibility periods, the officer used an income-averaging methodology—dividing total pay by days in each pay period to arrive at a daily average, then multiplying by the number of those days falling within each CERB period.
Ms. Parsons, unrepresented and residing in London, sought judicial review before the Federal Court. A preliminary question arose as to whether the Court had jurisdiction to permit an unrepresented party to make oral submissions by videoconference from outside Canada.
The Court’s Holding
Justice Fothergill held that the Federal Court has a discretion to permit an unrepresented party to make oral submissions by videoconference from the United Kingdom, and that it was in the interests of justice to do so in these circumstances. The Court examined principles of adjudicative jurisdiction, the Federal Court Rules requirement of a Canadian address for service, and international comity as discussed in R v Hape, 2007 SCC 26. Drawing on guidance from UK, Australian, and New Zealand courts, and noting confirmation from the UK Ministry of Justice that no restriction existed on voluntary participation in a foreign court proceeding from England and Wales, the Court was satisfied that proceeding by videoconference was appropriate given the importance of the matter to Ms. Parsons and the remedy sought.
On the merits, the Court found the officer’s income-averaging methodology unreasonable under the Vavilov standard. The methodology improperly assumed Ms. Parsons earned income evenly across each pay period, when in fact she worked sporadically and picked up irregular shifts. The Court noted it was entirely possible that all income attributed to a given CERB period was actually earned before that period began, which would have kept her below the $1,000 ceiling. The Court further found that Ms. Parsons was never transparently informed that this averaging approach would be used, nor advised what evidence she could submit to counter it—indeed, the officer told her no further documentation was needed even after she flagged her irregular working hours.
The application for judicial review was allowed and the matter remitted to a different CRA officer for redetermination, with Ms. Parsons to be given 30 days to submit any additional documentation relevant to the reassessment.
Key Takeaways
- The Federal Court has a discretion to permit unrepresented parties to appear by videoconference from abroad, to be assessed case by case with regard to the laws of both Canada and the foreign state; confirmation from UK authorities that no restriction applied was a significant factor here.
- A CRA income-averaging methodology that assumes uniform daily earnings is unreasonable where the applicant worked sporadically — the $1,000 CERB income threshold under s. 1 of the Income Support Payment (Excluded Nominal Income) Regulations must be applied based on income actually earned during the relevant consecutive days, not a mathematical average.
- Procedural fairness and the Vavilov transparency requirement demand that an applicant be meaningfully informed of the methodology being used and given a genuine opportunity to submit evidence to counter it before a negative eligibility determination is made.
- Even where the Attorney General argues a recalculation would not change the outcome, it is not for the reviewing court to perform its own CERB calculations — Parliament has assigned that task to the CRA, and the appropriate remedy is remittal to a different officer.
Why It Matters
This decision has practical significance for the large number of Canadians who received CERB and are now facing repayment demands following CRA reviews. It establishes that income-averaging across pay periods is not an automatically valid proxy for determining income earned during a specific CERB eligibility window, particularly for workers with irregular or shift-based employment. CRA officers must either obtain actual timesheet or shift records or, at a minimum, clearly disclose their calculation methodology and give applicants a meaningful opportunity to respond with corrective evidence before a finding of ineligibility is made.
The decision also contributes to developing Federal Court practice on remote hearings involving parties located outside Canada. While the Court declined to lay down a universal rule, its case-by-case framework — weighing the laws of the relevant foreign jurisdiction, international comity, the nature of the proceeding, and the interests of justice — offers useful guidance as cross-border remote participation becomes more common in Canadian litigation.