Executive Summary: Key Legal and Evidentiary Issues

• Bianca Potvin challenged the CRA's denial of her CERB and CRB benefits through judicial review, arguing the decisions were unreasonable.

• Eligibility hinged on whether Ms. Potvin stopped working or had her hours reduced for reasons related to COVID-19, as required under paragraph 6(1)(a) of the CERBA and paragraph 3(1)(f) of the CRBA.

• The CRA placed significant weight on Ms. Potvin's failure to return to work immediately after her maternity leave ended in January 2020, yet the Court found this fact irrelevant since nothing precludes a mother from staying at home to nurture their child for a longer period of time.

• No analysis was provided by the CRA on the evidentiary weight of Ms. Potvin's record of employment, which established that she had been employed with her employer since 2013 and supported a contemplated return to work.

• Deficiencies in the CRA's reasoning included a conclusory denial without transparent assessment of the submitted documents, contrary to the Vavilov standard of reasonableness.

• The Respondent's reliance on the daycare issue to justify the denial was rejected, as the CRA's own reasons contained no such analysis, and the Court held that a party cannot fashion its own reasons in order to buttress an administrative decision.

The facts of the case
Bianca Potvin worked at a jewelry store from 2013 until December 2018, when she went on maternity leave for a year, ending in January 2020. During her maternity leave, she received employment insurance in the form of maternity leave benefits for the sum of $9,625. Ms. Potvin applied for Canada Emergency Response Benefit (CERB) from March 15, 2020, to September 26, 2020, comprising a total of seven periods, as well as Canada Recovery Benefit (CRB) from September 27, 2020, to October 9, 2021, comprising a total of 27 periods. On March 17, 2023, Ms. Potvin's file was selected for an eligibility review by the CRA.

The CRA review process
For the first review, Ms. Potvin produced her 2019 Notice of Assessment and her T4E Statement of employment. On September 21, 2023, the CRA concluded that she did not qualify for both benefits because the evidence provided was insufficient to demonstrate that she earned at least $5,000 from employment or self-employment for 2019, for 2020, or for 2021, or in the 12-month period preceding the day on which the application was made. On November 2, 2023, Ms. Potvin requested a second review, submitting various documents including her 2019 income tax returns, her 2020 T4A and T4E slip, her 2021 T4A slip, as well as her 2019, 2020, and 2021 T1 return income.
On August 30, 2024, the CRA contacted Ms. Potvin by telephone to inquire about her reasons for applying for the CERB and CRB. She responded that she worked for a jewelry store from 2013 until December 2018, when she went on maternity leave for a year, ending in January 2020, and that she was planning to return to work at the same employment where she had been working since 2013. When the CRA officer asked why she did not return to her employment after the maternity benefits ended in January 2020, she responded that the shopping centre where she worked was closed. The CRA officer noted that shopping centres did not close until March 2020 and asked about the period between the end of her maternity leave and the closure in March 2020, to which Ms. Potvin was unable to provide a response. She was given 14 days to submit additional documents, including a record of employment from her previous employer, an itemized statement of the maternity benefits received, matching bank statements showing all credits of the maternity benefits received, and a copy of any email, text, or written or any other document issued by her employer regarding her job and why she was not employed back after her maternity leave ended. Ms. Potvin did not submit any additional documentation following that call.

The CRA decisions
On September 19, 2024, the CRA ruled that Ms. Potvin had not provided the documents requested on August 30, 2024, and therefore could not establish that she stopped working or had her hours reduced for reasons related to COVID-19.

Statutory framework and eligibility requirements
The CERB was established under the Canada Emergency Response Benefit Act, SC 2020, c 5, and the CRB under the Canada Recovery Benefits Act, SC 2020, c 12, both introduced as part of a series of measures to mitigate the impacts of the COVID-19 pandemic. Under paragraph 6(1)(a) of the CERBA and paragraph 3(1)(f) of the CRBA, one of the conditions for qualification was the cessation of employment for reasons related to COVID-19. Ms. Potvin bore the burden of proving to the CRA, on a balance of probabilities, that she met all the criteria for these benefit programs. The assessment of these criteria by the CRA is non-discretionary. As noted by the Court, Canada's tax system is a self-reporting system that assumes the taxpayer is able to provide all relevant documentation in support of their return, and it was open to the CRA to request additional documentation or information from her to prove her eligibility.

Standard of review and the Court's analysis
The Federal Court applied the reasonableness standard of review as established in Canada (Minister of Citizenship and Immigration) v Vavilov, [2019] 4 SCR 653, examining whether the CRA's decision was based on an internally coherent and rational chain of analysis and justified in light of the legal and factual constraints. The Court found the CRA analysis in this case to be deficient. While noting that the documents submitted by the Applicant were examined, there was no analysis of the weight attributed to those documents. The CRA reasons simply referred to the documentation filed, the notes taken during the telephone call that occurred on August 30, 2024, and then provided a conclusory statement that the CRA "was not able to validate and confirm the information to further support the claim" for Ms. Potvin's eligibility for the CERB and CRB.
The Court observed that the CRA reasons appear to demonstrate that a lot of weight was attributed to the fact that Ms. Potvin had not returned to work as soon as possible after the end of her maternity benefits at the end of January 2020, effectively impugning her credibility regarding her return to work scheduled for March 2020. However, the Court found this fact irrelevant, stating that nothing precludes a mother from staying at home to nurture their child for a longer period of time, even if the maternity benefits have ended. The Respondent conceded during oral arguments that if the return to work date had been scheduled for May 1, 2020, and on that date the Applicant's employer was closed because of COVID-19, Ms. Potvin would have qualified for the CERB for that period.
The Respondent also argued that one of the reasons Ms. Potvin did not return to work was because of her difficulty to find adequate daycare for her child, relying on a timeline provided by Ms. Potvin in which she noted that her "return to work date was being discussed when the daycare would be confirmed but COVID started and everything was put on hold." The Court found that nothing in the CRA reasons demonstrated that the issue of daycare played any role in the outcome, and that the Respondent cannot "fashion its own reasons in order to buttress the administrative decision." Furthermore, the decision did not explain what weight was attributed to Ms. Potvin's record of employment establishing that she had been employed with her current employer since 2013. Since there was no evidence that the Applicant resigned from her position, Ms. Potvin remained employed even though she was on maternity leave, and a return to work must have been contemplated, which supports her argument that she was scheduled to return to work in March but could not do so because of COVID-19. No consideration was made of that fact in the CRA reasons.

The ruling and outcome
The Federal Court found sufficient shortcomings in the CRA's decision for the Court to lose confidence in the outcome, holding that the CRA's reasons were not sufficiently transparent, intelligible, and justified, in relation to the legal and factual constraints including the evidence submitted by the Applicant as a whole, to support the outcome. The application for judicial review was granted in favour of Ms. Potvin. The CRA's decision was quashed and remitted for reconsideration by a different officer, and Ms. Potvin was entitled to provide the documents requested by the CRA on August 30, 2024, to the extent that additional documentation exists. No specific monetary award was ordered in this matter, and the parties agreed to bear their own costs.