Executive Summary: Key Legal and Evidentiary Issues

• Mrs. Rama Hamdi challenged the CRA's determination that she was ineligible for CERB and CRB pandemic benefits she had already received, on grounds of procedural fairness and unreasonableness.

• Eligibility for both benefits required the applicant to demonstrate at least $5,000 in employment or self-employment income over prescribed periods, a threshold the CRA concluded was not met.

• Communication breakdowns between the CRA decision maker and the Applicant — including unverifiable phone numbers and insistence on obtaining her SIN by phone — prevented her from supplementing her evidentiary record.

• The Applicant's reasonableness argument failed because she did not address the CRA's internal notes, which formed part of the decision's rationale under the Baker framework.

• Procedural fairness was found to have been violated as the Applicant was denied a meaningful opportunity to be heard before an artificial deadline was enforced by the CRA officer.

• The Federal Court granted the judicial review and remitted the matter to a different decision maker for redetermination, with no costs awarded to either party given the divided success.

Background and the pandemic benefits at issue

Mrs. Rama Hamdi, a self-represented litigant, applied for and received Canada Emergency Response Benefits (CERB) for periods 1 through 7 (March 15 to September 26, 2020) and Canada Recovery Benefits (CRB) for periods 1 through 22 and 26 through 28 (September 27, 2020, to October 3, 2021). These benefits were created under the Canada Emergency Response Benefit Act, SC 2020, c 5, and the Canada Recovery Benefits Act, SC 2020, c 12, respectively, to replace, at least in part, lost income during the Covid-19 pandemic. Due to the urgency of the crisis, the government released benefits quickly and conducted eligibility validation after the fact. Both statutes required applicants to demonstrate earnings of at least $5,000 from employment, self-employment, or both, over prescribed periods.

The applicant's self-employment and evidentiary submissions

Mrs. Hamdi claimed her income derived from self-employment in an education services and training management business she operated jointly with her husband, Hani Shaban. Their work involved collaborating with automobile associations in the Middle East for business development training and motorsport safety development, as well as offering consultancy and registration services for Quebec residents and international students seeking educational programs in Canada. Mrs. Hamdi's role encompassed administrative duties, student registrations, documentation management, financial aid support, travel arrangements for trainers, and overseeing the company's marketing strategy. Revenue from their activities was deposited into the company's accounts, with 65% allocated to her husband and 35% to Mrs. Hamdi. In support of her eligibility, she submitted a tax declaration, a notice of assessment for 2019 showing net income of $7,298, and a Statement of Business and Professional Activities.

The CRA review process and communication failures

The CRA notified Mrs. Hamdi by letter dated March 28, 2023, that she had been selected for an eligibility review. She did not become aware of the letter until the fall of 2023, responding on October 18, 2023. The first review concluded on June 21, 2024, with a terse decision finding she had not earned at least $5,000. She promptly requested a second review on June 26, 2024, and her husband supplemented the record with an explanatory letter on July 7, 2024. Nearly a year later, on May 30, 2025, the CRA decision maker began attempting to reach Mrs. Hamdi by telephone. What followed was a series of unsuccessful calls by both parties — a situation the Court described as the proverbial "telephone tag." When Mrs. Hamdi and the officer finally connected, the officer insisted on being given her social insurance number (SIN) over the phone. The Applicant grew suspicious because the telephone number used by the officer was not listed on the CRA website, and she was unable to verify it through CRA's own recommended procedures. She attempted to call the CRA's general number on multiple occasions but, after long wait times, could never reach a live agent. The officer set a deadline of June 13, 2025, for further submissions, and when that deadline passed without the Applicant's additional input, the second review was concluded on June 17, 2025, reaffirming her ineligibility.

The applicant's arguments before the Federal Court

Mrs. Hamdi raised two arguments. First, she contended that the duty of procedural fairness was breached because the CRA's systemic communication failures and the officer's focus on obtaining her SIN — rather than facilitating the submission of additional documentation — denied her a meaningful opportunity to present her case. She cited Baker v Canada (MCI), [1999] 2 SCR 817, and argued that the officer should have offered alternative verification methods or sent a secure written request through CRA My Account. She further pointed to the CRA's own internal procedure manual, which requires validation officers to contact taxpayers for missing information, provide a reasonable submission deadline, and extend the deadline if legitimate concerns arise. Second, she argued the decision was unreasonable, lacking intelligibility and justification in violation of the principles set out in Canada (MCI) v Vavilov, 2019 SCC 65.

The respondent's position

The Attorney General of Canada argued that the Applicant had been given "ample opportunity" to supplement her record, pointing to the initial review letter of March 2023, the first decision letter of June 2024, and a July 2024 telephone conversation with a CRA employee. The Respondent submitted that procedural fairness obligations in this context were at the low end of the spectrum, citing Cozak v Canada (Attorney General), 2023 FC 1571. On the reasonableness issue, the Respondent contended that the onus was on the Applicant to demonstrate the decision was unreasonable, and she had failed to discharge that burden.

The Court's analysis on reasonableness

Justice Roy disposed of the reasonableness argument quickly. Applying the Vavilov framework, which places the burden on the applicant to demonstrate that a decision is unreasonable, the Court found that Mrs. Hamdi had failed to address the CRA's internal notes, which formed part of the rationale for the decision under Baker. By targeting only the terse decision letters without engaging with the actual reasons found in the notes, she did not satisfy the Court that the decision suffered from serious shortcomings in rationality or justification.

The Court's analysis on procedural fairness

On the procedural fairness issue, the Court sided with Mrs. Hamdi. Justice Roy emphasized that the core of the duty of fairness is to provide a litigant the opportunity to be heard — audi alteram partem. Reviewing the matter on a correctness standard as required by Mission Institution v Khela, 2014 SCC 24, and Canadian Pacific Railway Company v Canada (Attorney General), 2018 FCA 69, the Court found the circumstances deeply troubling. Nearly a year had elapsed between the second review request and the officer's first outreach, and then an unexplained and artificial deadline of just days was imposed. Mrs. Hamdi's concern about the legitimacy of the phone calls was not fanciful — the Government of Canada's own website warns citizens never to call back a phone number purporting to be from CRA unless they have verified it themselves. The Applicant followed that very procedure and was unable to confirm the caller's identity. There was no evidence she acted in bad faith or sought to delay the process. The Court also considered the CRA's own internal instructions, which require officers to work with taxpayers to identify acceptable documentation and to extend deadlines when legitimate concerns are raised. The Court noted that the agent "did not engage" and that the opportunity to present her case fully "was never afforded." The Court admitted the Applicant's new exhibits on judicial review under the recognized exception for evidence relevant to procedural fairness that could not have been placed before the decision maker, clarifying it took no position on the quality or impact of that evidence on the merits.

Ruling and outcome

The Federal Court granted Mrs. Hamdi's judicial review application and ordered that the matter of her eligibility for CERB and CRB payments be remitted to a different decision maker for a new determination. The new process must include an opportunity for the Applicant to supplement her record, and the CRA is expected to discuss the situation with her as required by its own procedures. The Court expressly took no view on the merits of the underlying eligibility question. As for costs, because each party was partially successful — the Respondent prevailed on reasonableness while the Applicant prevailed on procedural fairness — the Court made no costs award, and each party was ordered to bear its own costs. No specific monetary amount was awarded or ordered in favor of either party.