FACTS:
L is a neuroscientist who worked as a postdoctoral fellow from 2012-2019. During the COVID-19 pandemic, she applied for the Canada Recovery Benefit (“CRB”). The Canada Revenue Agency (“CRA”) reviewed her application and determined that she was not eligible for the CRB because she had not earned at least $5,000 of employment income or net self-employment income in 2019-2020.
The Federal Court dismissed L’s application for judicial review. It determined that the CRA’s decision was reasonable as the evidence before it supported the finding that L was not eligible for the CRB. The Federal Court also determined that there had been no breach of procedural fairness.
L appealed to the Federal Court of Appeal. On the appeal, L limited her arguments to challenging the reasonableness of the CRA’s determination that her postdoctoral fellowship income was not “employment income” for the purpose of CRB eligibility.
DECISION:
Appeal dismissed (Rochester J.A. (Locke J.A. concurring); Hecman J.A. dissenting).
The applicable standard of review for the CRA’s decision is reasonableness; the alleged breaches of procedural fairness are reviewable on a basis akin to correctness.
The CRA’s determination not to consider the postdoctoral fellowship income as employment income is reasonable, given that L did not present this issue in the same way to the CRA reviewer. In particular, L had declared this income as “other income” not employment income in her tax forms. It was also only one of multiple income sources that she presented.
Given that the reasonableness of the decision must be judged in light of the record and arguments before the decision-maker, the decision was not unreasonable. The postdoctoral fellowship income “did not assume the same importance” before the CRA reviewer as it did before the courts; it was not a “key issue”. Therefore, a lack of detailed comments on the point is understandable. Nevertheless, the CRA meaningfully grappled with the question of whether the fellowship income was “income” for the purposes of CRB eligibility.
Further, there was no breach of procedural fairness. The CRA did not commit a fairness breach simply because the reviewer was not familiar with certain CRA documentation that L did not raise, such as an income tax folio and technical help guide. It is not unreasonable or a breach of procedural fairness for delegated decision-makers not to be aware of internal documentation pertaining to the Minister’s mandate.
Justice Heckman dissented. He would have found the CRA’s decision unreasonable because the reasons do not meaningfully grapple with the key issue of whether the fellowship income was “employment income”. While L did place greater emphasis on the issue of the fellowship income before the courts, she did raise this issue before the CRA reviewer. Even though she may not have used the term “employment income”, she still raised the issue of whether the fellowship income was a salary. By not meaningfully addressing this issue, the decision was unreasonable.
Moreover, Heckman J.A. found that the CRA reviewer fettered his discretion by mechanically applying the CRB guidelines, rather than considering other relevant considerations.
COMMENTARY:
In administrative law, it is well established that a party’s failure to raise an issue or argument before the decision-maker may prevent the court from finding the decision unreasonable on judicial review. The arguments raised by the parties are a relevant constraint that operates on the reasonableness of the decision.1 As a result, parties should raise their concerns before the decision-maker meaningfully and in a timely way.
In this case, the Federal Court of Appeal applies this principle quite stringently. The majority refuses to find the decision unreasonable based on an argument that L emphasized much more before the courts than before the decision-maker. As the dissent points out, the “employment income” issue did arise before the decision-maker, but certainly not with the same focus or in the same terms. For the majority, this was not good enough.
This emphasizes the importance of parties putting their best foot forward and raising all possible issues before the decision-maker.
The Federal Court of Appeal’s concerns – drawn from the administrative law jurisprudence – are valid. The courts do not want to hold decision-makers to an unreasonable standard to address every possible argument in great detail, even if the parties themselves have not raised or focused on an issue. This dovetails with the foundational principle that it is the administrative decision-maker, not the courts, that have been legislatively assigned the role to decide the matter at first instance.
However, a lack of flexibility in the application of this principle also raises important access to justice concerns. Many individuals do not (and financially cannot) retain counsel for their interactions with administrative decision-makers. Notably, L was self-represented even before the Federal Court of Appeal in this case. Applying this rule too stringently may mean that parties need to retain counsel to thoroughly advance all legal arguments in the proper terminology before the decision-maker, or else forever lose the ability to raise the issue on subsequent judicial reviews. Such an approach is clearly out of reach for many litigants.
The courts should therefore be flexible with the application of this principle, particularly where parties were self-represented before the administrative decision-maker. The focus should be on whether the issue was truly never raised in a way that the decision-maker could grapple with it, as opposed to simply a shifting of emphasis on judicial review to focus on one or two issues.