Executive Summary: Key Legal and Evidentiary Issues

• Reasonableness of the CRA Agent's determination that Ms. Matta was ineligible for the Canada Emergency Response Benefit (CERB) under the Vavilov standard of review.
• Whether the Maximum Income Threshold under the CERB Act should be calculated using gross or net income, in light of legislative silence on this point.
• Failure of the Agent to engage with the Applicant's central statutory interpretation arguments, despite a prior Federal Court ruling requiring such engagement.
• Admissibility and weight of contemporaneous 2020 CRA guidelines and the prior internal CRA policy on Confirming Covid-19 Benefits Eligibility produced by the Applicant.
• Adequacy of the Agent's analysis of whether the Applicant's unemployment during the summer of 2020 was attributable to Covid-19 or to the end of the school year.
• Appropriate remedy on judicial review, including whether the matter should be remitted for redetermination or finally decided by the Court.

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Background and parties

This judicial review proceeding before the Federal Court of Canada, cited as Matta v Canada (Attorney General), 2026 FC 612, was heard by videoconference on April 27, 2026, with judgment rendered by the Honourable Mr. Justice Ahmed on May 8, 2026. The Applicant, Ms. Michelle Sarah Matta, appeared on her own behalf as a self-represented litigant, while the Respondent, the Attorney General of Canada, was represented by David Heppenstall. The Court conducted the proceedings mindful of the Canadian Judicial Council's Statement of Principles on Self-represented Litigants and Accused Persons (2006), as endorsed by the Supreme Court in Pintea v Johns, 2017 SCC 23.

Facts of the case

Ms. Matta is a schoolteacher. During the 2019 to 2020 school year, she worked as a long-term occasional teacher at 20% of a full-time week and sought to supplement her income through supply teaching. With the onset of the Covid-19 pandemic, the school board stopped occasional teaching, and Ms. Matta could no longer supplement her income, which led her to rely on the CERB. The Canada Revenue Agency (CRA) initiated a review of her eligibility and, in a letter dated October 18, 2023, found Ms. Matta ineligible for the four periods in which she had applied for and received the CERB, namely from April 12, 2020 to June 6, 2020, and from July 5, 2020 to August 29, 2020. Ms. Matta requested a second review, and in a letter dated May 8, 2024, the CRA again found her ineligible. Ms. Matta sought judicial review of that decision, and on January 30, 2025, Justice Southcott found, in Matta v Canada (Attorney General), 2025 FC 195, that the CRA's determination was unreasonable because the CRA agent failed to engage with Ms. Matta's key argument that the CRA should use net income rather than gross income in calculating the Maximum Income Threshold. The matter was referred back to another decision maker, and in a letter dated July 2, 2025, the Agent again determined that Ms. Matta was ineligible for the CERB in the four key periods (the "Further Second Review"). The Agent concluded that Ms. Matta earned more than $1,000 of employment income from April 12, 2020 to June 6, 2020, and that she stopped working for reasons unrelated to Covid-19 from July 5, 2020 to August 29, 2020.

In advance of the Further Second Review, the Agent had several phone calls with Ms. Matta in May and June 2025. During those calls, Ms. Matta challenged the use of gross income instead of net income and referenced Justice Southcott's earlier judgment. She asked for documents contemporaneous with her application for the CERB specifying that the calculation was based on gross income. The Agent referred her to the CERB Act and the Canadian Gazette for the Regulations. In internal notes, the Agent stated that the calculation for the Maximum Income Threshold is based on total employment income earned (the amount reported on the T4 before deductions), and that this approach maintained consistency with the method used for the $5,000 minimum income threshold. Ms. Matta also explained that she had lost her casual hours due to Covid-19, which meant she was not eligible for employment insurance during the summer months in which she applied for the CERB. The Agent's notes acknowledged that she had applied for jobs and attended interviews during this period but did not find employment. Nevertheless, the Agent concluded that Ms. Matta was ineligible for the CERB during the summer months because she had ceased working due to the end of the school year, rather than for reasons related to Covid-19.

Legislative framework

The CERB is a benefit program introduced by the Canada Emergency Response Benefit Act, SC 2020, c 5, s 8 ("CERB Act"). The CERB Act provided income support for any four-week period beginning March 15, 2020 and ending October 3, 2020 (s 5(1)). Section 6 of the CERB Act sets out the eligibility requirements, including the requirement that benefit recipients must have stopped working for reasons related to Covid-19 for at least 14 consecutive days within the four-week period in which they applied for the CERB (s 6(1)(a)). The CERB Act, together with the Income Support Payment (Excluded Nominal Income) Regulations, SOR/2020-90 ("Regulations"), sets out a maximum income that benefit recipients may receive during the 14 days in which they claim their employment was affected by Covid-19 (the "Maximum Income Threshold"). Under the Regulations in force in April 2020, a worker remains eligible for the CERB so long as the income received in the applicable period is $1,000 or less (CERB Act, s 6(1)(b)(i); Regulations, s 1). Recipients may be subject to compliance reviews by the CRA (s 10), and a recipient found to have been ineligible for any payment period is required to repay the amount received during that period (s 12(1)).

Issue and standard of review

Although Ms. Matta alleged both unreasonableness and procedural unfairness, she made no substantive submissions on procedural fairness. The Court accordingly identified the sole issue as whether the Agent's decision was reasonable. The parties agreed, and the Court accepted, that the applicable standard of review was reasonableness, as set out in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65. The Court reiterated that reasonableness is a deferential but robust standard requiring a decision that is transparent, intelligible, and justified, based on an internally coherent and rational chain of analysis, and justified in relation to the facts and law that constrain the decision maker.

Analysis

Ms. Matta submitted that she would have earned less than $1,000 if the Agent used net income instead of gross income to calculate the Maximum Income Threshold. Relying on Rizzo & Rizzo Shoes Ltd (Re), 1998 CanLII 837 (SCC), she argued that the Agent should have interpreted the legislation in her favour because the CRA's guidelines at the time she applied for the benefit used ambiguous language. She further submitted that the Agent overlooked evidence that she had been deprived of employment insurance due to Covid-19 during the school year, forcing her to apply for the CERB during the summer, and that the Agent should have considered that the purpose of the CERB Act was to alleviate the loss of income for those not eligible for employment insurance during the pandemic. The Respondent submitted that the Agent had accounted for the evidence, noted the text of the CERB Act and Regulations in calculating eligibility based on gross income, and relied on the Applicant's record of employment to determine that she did not face unemployment or loss of income due to Covid-19.

The Court disagreed with the Respondent. Justice Ahmed found that the Agent's analysis of the Maximum Income Threshold was not alive to the text, context, and purpose of the CERB Act, referring to Judt v Canada (Attorney General), 2024 FC 2012, Pepa v Canada (Citizenship and Immigration), 2025 SCC 21, and Vavilov. The Court noted that while the Agent need not engage in a formal statutory analysis, the Agent must remain aware of the remedial purpose of the CERB Act and engage, even briefly, with the principles of modern statutory interpretation where there may be an incongruency between the interpretation and the text, context, or purpose of the Act. The Court relied on Shtokal v Canada (Attorney General), 2025 FC 498, where Justice Ngo found that silence in the CERB Act and Regulations regarding gross or net income does not justify the CRA's use of gross income, and that the CRA must justify its preference. This aligned with the Court's prior determination in Matta, which required the agent to engage with the Applicant's central arguments, including statutory interpretation. The Court distinguished other decisions referring to the Maximum Income Threshold as gross income (Johnson v Canada (Attorney General), 2025 FC 1204; Di Lello v Canada (Attorney General), 2026 FC 145; Mutlaq v Canada (Attorney General), 2025 FC 884) on the basis that those recipients either did not make statutory interpretation submissions or their income so far exceeded the threshold that net income would have made no difference.

The Court further observed that Ms. Matta, with what Justice Ahmed described as "impressive foresight," presented screenshots from 2020 of the CRA guidelines for individuals applying for the CERB. These screenshots did not indicate whether income should be calculated before or after taxes. She also provided a prior iteration of the CRA's policy on Confirming Covid-19 Benefits Eligibility, obtained in the course of her earlier judicial review, which did not disclose any note regarding whether the Maximum Income Threshold should be based on net or gross income, in contrast with the most recent CRA policy, which states the threshold should be based on pre-tax income. The Court found both policies and the screenshot admissible as they would have been known to the Agent at the time of the decision as part of the CRA's internal documents, citing Bristol-Myers Squibb Co v Canada (Attorney General), 2005 SCC 26. The Court could not discern any engagement by the Agent with the text, context, or purpose of the legislative instruments, noting that the Agent's reliance on internal notes about "consistency" with the minimum income threshold was not a reference to the legislative framework but merely a repetition of the most recent policy statement.

The Court also found that the Agent failed to engage with Ms. Matta's argument regarding her eligibility for the CERB in the summer of 2020. While the Agent acknowledged that she had engaged in a job search and attended interviews without finding employment, the Agent simply noted she was unemployed due to the end of the school year. The Agent stated that Ms. Matta had confirmed in a phone call on May 28, 2025 that she was laid off due to the end of the school year rather than Covid-19. However, the Agent's notes from that same call also stated that, even though she had applied and attended interviews, she could not find any new work due to Covid-19. The Court held that, while it was open for the CRA agent to weigh Ms. Matta's job search in accordance with the criteria for the CERB, it was incumbent upon the Agent to duly consider whether Covid-19 had prevented Ms. Matta from finding new work in the summer of 2020, citing Fentum v Canada (Attorney General), 2023 FC 857, and Vavilov.

Remedy

Ms. Matta submitted that the matter should not be referred back to the CRA for redetermination due to the prolonged proceedings and the need to avoid endless "merry go rounds" of judicial review (Vavilov at para 142). While the Court sympathized with the continued stress these proceedings had caused her, Justice Ahmed found it would not be appropriate for the Court to determine the outcome of her eligibility for the CERB. The usual remedy where a decision cannot be upheld on judicial review is to remit the decision to the decision maker for redetermination, with the only relevant exception being where remitting would serve no useful purpose. The Court relied on Lin v Canada (Attorney General), 2025 FC 1663, in which Justice Aylen found that eligibility for Covid-19 benefits is not inevitable based on an unreasonable assessment of one of the required criteria, and held that the outcome of Ms. Matta's eligibility was not a foregone conclusion. The Court emphasized that the purpose of remitting a matter is, in part, so that the decision maker may benefit from the Court's reasoning, and that the recurrence of this matter before the Court with nearly identical issues suggested its prior reasoning had not been adequately absorbed.

Conclusion and outcome

Justice Ahmed concluded that the Agent's determination was not reasonable in light of the applicable legal and factual context. The application for judicial review was allowed in favour of the Applicant, Ms. Michelle Sarah Matta, and the matter was referred back for redetermination by a different agent. The Court ordered no costs. As the judgment expressly states that "there is no order as to costs" and the decision concerns a remittance of an administrative review rather than a quantified monetary award, no specific monetary amount was determined or ordered in favour of the successful party.