Background
David Wilson, a self-employed veterinary educator, applied for and received three federal pandemic relief benefits between March 2020 and January 2022: the Canada Emergency Response Benefit (CERB), the Canada Recovery Benefit (CRB), and the Canada Worker Lockdown Benefit (CWLB). Wilson’s income from teaching veterinary courses in hotel lobbies was highly irregular, coming primarily through bank transfers when work was completed, rather than on a regular schedule. During COVID-19 lockdowns and restrictions, he was unable to perform his in-person courses and applied for benefits only during periods when he could not work.
The Canada Revenue Agency conducted two eligibility reviews. Both concluded Wilson was ineligible for all three benefits and required him to repay the amounts received. The first review found him ineligible; a second review by a different CRA agent reached the same conclusion. In his appeal to the second reviewer, Wilson submitted transaction records, bank statements, and a detailed letter explaining that payments appearing on his business accounts during the relevant periods were actually for work performed in 2018—not during the lockdown periods he claimed the benefits. He emphasized that CRA guidance stated income is recognized when work is performed, not when payment is received.
The Court’s Holding
Justice Fuhrer granted Wilson’s application for judicial review, finding the CRA’s decision unreasonable under the Vavilov standard. The court held that although the agent apparently accepted Wilson’s factual explanation—that he had ceased working during the relevant periods and that the payments received were for prior-year work—the decision contradicted this acceptance by concluding the agent could not validate his income. The court found this logical inconsistency rendered the decision unintelligible: if Wilson was not working and not generating income during the periods in question, the agent’s inability to validate income during those periods made no sense.
The court further held that the decision lacked the required “responsiveness” mandated by administrative law. The agent failed to grapple with Wilson’s central submission—that he had not performed work during the lockdown periods and therefore had not earned income for those periods. Instead, the decision merely stated conclusions without addressing this key evidence. The court noted that the CRA’s own eligibility guidelines required the agent to “review the cause related to the reduction of income or the inability to work before calculating the reduction.” Since the agent did not dispute that Wilson was unable to work due to COVID lockdowns, it was illogical to calculate income for work performed during those periods. Additionally, even if the 50% income-reduction test applied to CRB and CWLB, Wilson had demonstrated a 100% reduction—he was not working at all during the relevant periods—which satisfied the statutory criteria.
Key Takeaways
- Administrative decision-makers must meaningfully engage with evidence and submissions, not merely state conclusions; failure to address an applicant’s core argument renders a decision unreasonable.
- For pandemic relief benefits, income is recognized when work is performed, not when payment is received; an applicant who demonstrates cessation of work has a viable eligibility path regardless of income calculations.
- An agency’s acceptance of key facts (cessation of work) cannot be contradicted by a conclusion that contradicts those facts (inability to validate income); such logical inconsistency fails the reasonableness standard.
- Agencies must follow their own published eligibility guidelines, which required examining the cause of income reduction before undertaking separate calculations.
Why It Matters
This decision reinforces the judicial review principle that administrative agencies cannot rubber-stamp decisions by accepting an applicant’s evidence at the review stage and then reaching a conclusion inconsistent with that acceptance. It establishes that reasonableness review, while deferential, remains robust and demands logically coherent decisions supported by meaningful engagement with the applicant’s submissions. For the thousands of self-employed and gig-economy workers who received pandemic relief benefits, the ruling clarifies that agencies cannot sidestep the statutory “not working” eligibility pathway by relying on annual tax returns when those returns may aggregate income from multiple years or multiple income sources.
The decision also underscores the importance of applicants submitting detailed documentary evidence (bank statements, transaction records, explanatory letters) during administrative reviews. Even when an agent accepts an applicant’s explanation, a decision that fails to acknowledge and address that explanation is vulnerable to judicial reversal. The case was remitted to a different CRA agent for redetermination, and Wilson was awarded $2,500 in costs—a signal that the initial reviewers’ approach was not merely erroneous but sufficiently deficient to warrant judicial intervention and cost consequences.