The Court Says Fairness Comes First in CRA Decisions, Godin v. Canada (Attorney General), 2024 FC 1386

Introduction: When the CRA says “no,” do you still deserve a fair hearing?

In Godin v. Canada (Attorney General), the Federal Court considered whether the Canada Revenue Agency (CRA) treated an applicant fairly when it denied several COVID-19 emergency benefits. The case focused on the principle of procedural fairness, which requires government decision-makers to give individuals a fair chance to understand the case against them and respond before a final decision is made. The Court ultimately found that the process was unfair and ordered the matter to be reconsidered.

Facts of the Case in Godin v. Canada

Michael Godin applied for and received several COVID-19 support benefits between 2020 and 2021, including the Canada Recovery Benefit (CRB), Canada Recovery Caregiving Benefit (CRCB), Canada Recovery Sickness Benefit (CRSB), and the Canada Emergency Response Benefit (CERB).

In 2023, the CRA reviewed his eligibility. The agency requested proof that he had earned at least $5,000 in employment or self-employment income during certain periods. A first reviewer concluded that he did not meet this requirement and was therefore ineligible for all benefits.

Mr. Godin requested a second review using the CRA review program. The second reviewer again found that he was ineligible. The decision stated that he did not meet the $5,000 income threshold and also failed to meet other criteria, such as having lost work due to COVID-19 or experiencing a sufficient reduction in income.

Mr. Godin argued that the decision was unfair. He explained that a house fire in 2019 destroyed tools and limited his ability to work, and that the pandemic further reduced his income. He also claimed that he had provided documents showing income above $5,000.

Issue for Determination in Godin v. Canada

The main issue before the Court was whether the CRA’s second review process was procedurally fair.

Decision of the Federal Court in Godin v. Canada

The Federal Court allowed the application for judicial review. The Court set aside the CRA’s decisions and sent the matter back for reconsideration by a different reviewer.

Federal Court’s Reasoning in Godin v. Canada

1. Standard of Review

The Court explained that procedural fairness is reviewed using a standard similar to correctness. The key question is whether the person affected knew the case to meet and had a fair opportunity to respond.

2. Lack of Notice About the Real Issues

The Court found that Mr. Godin was not properly informed about the concerns with his evidence. For example, the reviewer said that his invoice for insurance-related work was “likely” an issue, but also promised to investigate further and follow up. However, there was no evidence that the reviewer later explained the outcome of that investigation before issuing the decision.

Because of this, Mr. Godin did not know the exact problem with his evidence and therefore did not have a fair opportunity to respond.

3. Unclear Requirements for Supporting Documents

The reviewer asked Mr. Godin to provide documents showing that he lost scheduled work due to COVID-19. He submitted an estimate for a renovation project that did not proceed because of the pandemic. However, the reviewer never explained why this document was inadequate or what type of proof would be acceptable.

The Court held that this lack of clarity meant the process was unfair.

4. New Criteria Raised Without Notice

The second reviewer also found Mr. Godin ineligible based on additional criteria that he had never been asked to prove. Earlier communications focused only on the $5,000 income requirement. The Court found it unfair to deny benefits on new grounds without giving him a chance to respond.

Outcome of the Court’s Decision in Godin v. Canada

The Court concluded that the process was procedurally unfair. It did not decide whether Mr. Godin was actually eligible for the benefits. Instead, it ordered the CRA to conduct a new review with a different reviewer.

Significance of the Case of Godin v. Canada

This case highlights the importance of procedural fairness in administrative decisions. Even where the government may have strong reasons to deny a benefit, the decision must still be made through a fair process.

The Court emphasized three key principles:

1. The applicant must know the case to meet.
2. The applicant must be given a fair chance to respond.
3. New reasons for denial cannot be introduced without notice.

The decision shows that courts will intervene when government agencies fail to follow fair procedures, even in large-scale programs like pandemic benefits.

Conclusion: It’s not just about the decision—it’s about how the decision is made.

Godin v. Canada (Attorney General) is a reminder that fairness in process is as important as correctness in outcome. The Court did not say that Mr. Godin was entitled to the benefits. Instead, it held that the government must follow fair procedures before making such decisions. When an applicant is not properly informed of the issues or is denied a meaningful chance to respond, the decision cannot stand.

Pro Tax Tips:  PAY CLOSE ATTENTION TO THE PROCESS — NOT JUST THE RESULT

If you challenge a CRA decision in Federal Court, it is important to note that the Court does not take the same position as the CRA and re-decide the facts. Instead, the court looks at whether the CRA followed a fair process and whether the decision was reasonable (or correct, depending on the legal standard that applies).

This means that showing you were not told the full case against you, or that you were not given a real opportunity to respond, can sometimes be stronger grounds than simply arguing that the CRA got the facts wrong. Keeping detailed records of communications, letters, and requests during the review process can therefore be just as important as the financial documents, contracts and other evidence you are presenting to the CRA.

A top Canadian tax lawyer can help assess whether the CRA treated you fairly during the review and whether the final decision meets the proper legal standard.

Frequently Asked Questions (FAQs):

Can the court set aside a decision solely because the process was unfair?

Yes. The issue of procedural fairness on its own can determine the outcome of a judicial review application. If the court finds that the decision-making process was unfair, it will usually set aside the CRA’s decision without examining the substance of the case. The matter is usually sent back to the CRA for reconsideration, with directions to conduct a new review that will properly respect the requirements of procedural fairness.

What is the “correctness” standard of judicial review, and when does it apply in Canadian law?

The “correctness” standard means a court does not defer to a government decision-maker. Instead, the court decides the legal issue for itself. If the decision of the government decision-maker is wrong, the court replaces it with its own decision.

In Canada (Minister of Citizenship and Immigration) v. Vavilov, the Supreme Court of Canada held that courts should apply a “reasonableness” standard, which gives some deference to decision-makers. However, correctness applies in certain situations: when a law provides a formal right of appeal, when constitutional issues are involved, when the legal question is centrally important to the legal system as a whole, or when deciding which body has authority over a matter.

The correctness standard ensures that key legal questions are answered accurately and consistently across Canada, including issues of procedural fairness.

What are the key eligibility requirements for the Canada Recovery Benefit (CRB), the Canada Recovery Caregiving Benefit (CRCB), the Canada Recovery Sickness Benefit (CRSB), and the Canada Emergency Response Benefit (CERB)?

 

Key eligibility requirements by benefit

Benefit	Income requirement	Age, residence, SIN	Work / income impact	COVID-19-related reason	Employment status timing	Other “no overlap” rules
CRB (Canada Recovery Benefit)	At least 5,000 before tax in 2019, 2020, or in the 12 months before the first CRB application, from employment, self-employment, or certain other allowed income sources	Must be resident in Canada, present in Canada during the 2-week claim period, at least 15 years old on the first day of the period, and have a valid SIN.	Must have stopped working or had a reduction of at least 50% of average weekly employment/self-employment income during the claim period compared with before COVID‑19.	Work loss or income reduction must be for reasons related to COVID‑19 (e.g., layoff, reduced hours, business slowdown/closure due to the pandemic) and not because of voluntarily quitting work without just cause.	Must have been working (employed or self-employed) and then experienced the COVID-19-related loss or reduction in work; must actively be seeking work and not have refused reasonable work.	Cannot receive, for the same period, EI benefits, CRCB, CRSB, short-term disability, workers’ compensation, Québec parental insurance, or similar COVID-19 recovery benefits.
CRCB (Canada Recovery Caregiving Benefit)	At least 5,000 before tax in 2019, 2020, 2021, or in the 12 months before the first CRCB application, from employment, self-employment, or certain allowed sources.	Must be resident in Canada, present in Canada during the 1-week claim period, at least 15 years old on the first day of the period, and have a valid SIN.	Must be unable to work at least 50% of normal scheduled work week because of caregiving responsibilities during the claim week.	Must be caring for a child under 12 or a family member who cannot attend school, daycare, or regular care facility because it is closed or unavailable due to COVID‑19, they are sick or required to isolate due to COVID‑19, or they are at high risk of serious health complications if they get COVID‑19. doanegrantthornton+2	Must be employed or self-employed on the day before the first CRCB period claimed, and must have normally been scheduled to work but could not work due to caregiving for COVID‑19‑related reasons.	Cannot receive, for the same week, CRB, CRSB, EI, short-term disability, workers’ compensation, Québec parental insurance, maternity/parental benefits, or similar recovery benefits.
CRSB (Canada Recovery Sickness Benefit)	At least 5,000 before tax in 2019, 2020, 2021, or in the 12 months before the first CRSB application, from employment, self-employment, or certain allowed sources.	Must be resident in Canada, present in Canada during the 1-week claim period, at least 15 years old on the first day of the period, and have a valid SIN.	Must be unable to work at least 50% of normal scheduled work week because of a COVID-19-related health situation during that week.	Must be sick with COVID-19, may have COVID-19 and be seeking diagnosis, have been advised to self-isolate due to COVID-19, or be at high risk of serious complications and therefore following public health advice not to work.	Must be employed or self-employed on the day before the first CRSB period claimed, and have been scheduled to work but unable to because of one of the COVID-19-related reasons above.	Cannot receive, for the same week, CRB, CRCB, EI, short-term disability, workers’ compensation, Québec parental insurance, or other similar benefits for that period.
CERB (Canada Emergency Response Benefit)	At least 5,000 before tax in 2019 or in the 12 months before the date of first CERB application, from employment, self-employment, or certain maternity/parental benefits.	Must reside in Canada, be at least 15 years old, and have a valid SIN.	For an initial 4-week period, must have stopped working or had no employment/self-employment income for reasons related to COVID‑19; for later periods, had to have no income or limited income (up to a small allowed cap) for COVID-19 reasons.	Must have stopped working or significantly reduced work because of COVID‑19, such as job loss, layoff, reduced hours, business closure, or having to stop work to care for others due to pandemic impacts.	Must have been working (or receiving specified maternity/parental benefits) before COVID-19‑related stoppage; had to attest to continued lack of work or limited income for each 4-week period claimed.	Cannot receive, for the same period, EI regular or sickness benefits or similar income‑support benefits; there were also rules to prevent double‑claiming CERB through both EI and the CRA stream for the same weeks.

 

Disclaimer: This article just provides broad information. It is only up to date as of the posting date. It has not been updated and may be out of date. It does not give legal advice and should not be relied on. Every tax scenario is unique to its circumstances and will differ from the instances described in the article. If you have specific legal questions, you should seek the advice of a Canadian tax lawyer.