Background
Hong Zhang received Canada Emergency Response Benefit (CERB) and Canada Recovery Sickness Benefit payments from the Canada Revenue Agency. After the CRA requested information confirming her eligibility, she uploaded receipts, handwritten notes, bank statements, emails and other documents, many of which were in Mandarin.
A first reviewer unsuccessfully attempted to reach Zhang by telephone and found her ineligible for CERB because she had not established that she earned less than $1,000 during the relevant periods or that she stopped working or reduced her hours for COVID-19-related reasons. During a second review, another reviewer made three unsuccessful calls to the same number, did not contact Zhang by mail and again found the submitted information insufficient. Zhang sought judicial review, alleging procedural unfairness and an unreasonable failure to consider her information.
The Court’s Holding
The Federal Court granted judicial review, set aside the CERB ineligibility determination and remitted the matter to a different officer for redetermination. Applying the contextual factors from Baker, the Court held that Zhang was owed a moderate level of procedural fairness during the second-level review. The review was administrative and informal, but the determination was final within the statutory scheme, carried potentially serious repayment consequences and concerned benefits Zhang had already received.
The second reviewer knew or should have known that earlier telephone attempts had failed and that mail had successfully reached Zhang. Persisting exclusively with an unsuccessful contact method, despite an effective alternative, deprived her of the opportunity to learn and answer the CRA’s concerns. Because that procedural-fairness breach was dispositive, the Court did not decide whether the ineligibility determination was reasonable. It also disregarded new exhibits that were not before the decision-maker and did not fall within an exception permitting new evidence on judicial review.
Key Takeaways
- A moderate level of procedural fairness applied to the CRA’s second-level redetermination of eligibility for benefits already paid.
- When telephone contact had repeatedly failed and mail had worked, relying only on further telephone calls denied the recipient a fair opportunity to respond.
- The Court set aside the ineligibility decision and ordered redetermination by a different officer, without deciding the decision’s substantive reasonableness or awarding costs.
Why It Matters
The decision emphasizes that procedural-fairness obligations in benefit reviews depend on the specific context and are not invariably at the low end of the spectrum. The absence of a statutory appeal and the financial consequences of reclaiming benefits already received can require meaningful participatory protections.
For administrators, repeated attempts through one known-to-be-ineffective channel may be insufficient when a proven alternative is readily available. For benefit recipients, the ruling confirms that a redetermination may be set aside when the agency’s communication choices prevent them from knowing and answering the case against them.