Judicial Review of CERB Decisions
The Canada Revenue Agency (“CRA”) started issuing letters to individual taxpayers who received the Canadian Emergency Response Benefit (“CERB”) back in 2020, asking them for additional information to support their entitlement to the pandemic benefit.
The CRA letters are specifically addressed to individuals whom the CRA believes earned more than the allowable limit of $1,000 during the periods in which they claimed CERB, or where they believe the individual did not earn the required $5,000 to be eligible for CERB. The CRA is asking these individuals to send in proof of their earnings during, or before the CERB periods. Requested documents includes copies of bank statements showing their income, pay stubs for the relevant periods, invoices issued, and a letter from their employer confirming their income and when it was earned.
The CRA has a two tiered system of review. The first level of review permits individuals to supply the representations and other supporting documents to justify their CERB eligibility. If, following the CRA’s decision, an individual feels that the assessment is incorrect, they may object to the decision and request a second review in writing.
However, if after the second review the individual still feels that the CRA has improperly exercised its discretion, they may apply to the court for judicial review of the CRA’s discretion.
What is Judicial Review?
Judicial Review is a process by which the Federal Court can review the discretionary decisions of administrative bodies, such as the CRA. There are many sections in the Tax Act that provides the CRA with the discretion on whether to act and how to act in certain situations. The purpose of Judicial Review is to allow a judge to review the decisions of administrative bodies for compliance with the law.
Judicial Review at the Federal Court is different from an appeal to the Tax Court of Canada. The Tax Court of Canada is limited in the way it can deal with an appeal. The Tax Court may either confirm the assessment or reassessment, the judge can vacate the assessment and order the CRA to reconsider its decision, and the judge may also direct the CRA to reassess the individual according to his instructions. However, the specific remedy available must be expressly set out in the Tax Act. As such, the Tax Court does not have the power to tell the CRA how to exercise its discretion where the Tax Act allows.
In contrast, the Federal Court is empowered with a broad discretion in the remedies it can grant. The Federal Court can order the CRA to act or not to act in specific ways. Furthermore, the scope of Judicial Review is also much broader in the sense of the type of issues it can bring before the Federal Court. Judicial Review can be used to scrutinize CRA actions such as aggressive behaviours of the CRA without lawful business, the CRA’s refusal to consider proper evidence, the CRA’s refusal to lawfully open an objection to an assessment, and, of course, the CRA’s decision itself.
Essentially, the Federal Court is able to tell the CRA how to exercise its discretion if they believe that the CRA has made an unreasonable ruling. However, it is important to note that the Judicial Review process is not an opportunity for individuals to reargue their case again, but rather an opportunity to address the way by which the CRA reached its decision.
Keep in mind that the Judicial Review process is not looking to confirm what is correct or not, but rather to see if the government’s decision was reasonable.
Do you need Judicial Review for your CERB Denial?
Has the CRA denied you for CERB?
If you feel the CRA has wrongfully denied your CERB entitlement, for reasons such as failing to consider proper evidence amongst others, then you can pursue a Judicial Review application to hold the CRA accountable in Federal Court.
The Federal Court will generally respect discretionary decisions made by the CRA and its delegates as long as decisions are reasonably transparent and not the result of bad faith or fraud. It is extremely imperative that individuals put forth a strong case depending on the type of review.
For discretionary decisions, the Federal Court will most often review the decision according to a standard of reasonableness. An administrative decision will not be interfered with so long as the decision falls within a range of reasonable outcomes, even if the reviewing judge ultimately disagrees with the CRA’s decision. Thus, it is imperative that individuals are able to show the range of reasonable decisions clearly and concisely and demonstrate that the CRA’s decision fell outside the realm of possibilities.
Here at R&A Tax Law, we have the expertise and the knowledge to commence Judicial Review applications of any and all CRA decisions. If you think the CRA made an unreasonable decision on your file, give us a call today to see how we can help!
This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions, you should consult a lawyer.