Released Date: 02/16/2021
In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.
Between:
Tania Spence
Applicant
and
Aviva Insurance Company of Canada
Respondent
DECISION
ADJUDICATOR:
Jesse A. Boyce, Vice-Chair
APPEARANCES:
For the Applicant:
Teena Belland, Counsel
For the Respondent:
James M. Brown, Counsel
Brenden Carruthers, Counsel
HEARD:
Via written submissions
OVERVIEW
1The applicant was injured in an accident on March 4, 2019 and sought an income replacement benefit (“IRB”) from the respondent, Aviva, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (''Schedule'')1. The parties agree that there is no dispute with respect to the applicant’s entitlement to the IRB for the period June 23, 2019 to October 26, 2019.
2Instead, the parties disagree over whether Employment Insurance (“EI”) sickness benefits are deductible as “gross employment income” from the total IRB payable. The applicant submits that EI sickness benefits are specifically excluded pursuant to s. 4(1) and s. 47(3) of the Schedule and are therefore not deductible from the total amount payable. Aviva submits that EI sickness benefits are “gross employment income” such that it properly deducted 70% of those benefits from the applicant’s IRB, pursuant to s. 7(3)(a).
3The applicant applied to the Tribunal for resolution of the dispute, resulting in this written hearing. The parties agree that if EI sickness benefits are deductible as “gross employment income”, then the applicant has been fully paid and her application ought to be dismissed. Alternatively, if EI sickness benefits are not deductible, then the applicant should receive the further amount of $5,901.00 in IRB payments for the period in dispute.
ISSUES IN DISPUTE
4The following issues are in dispute:
a. What is the correct quantum of IRBs payable to the applicant from June 23, 2019 to October 26, 2019?
b. Is the applicant entitled to interest on any overdue payment of benefits?
result
5The applicant is entitled to payment in the amount of $5,901.00, plus interest under s. 51, representing the unpaid portion of her IRB that was improperly deducted as a result of her receipt of EI sickness benefits post-accident.
ANALYSIS
The applicant’s IRB entitlement and EI sickness period
6The parties submitted an agreed statement of facts. There is no dispute that at the time of the accident, the applicant was employed full-time as a registered nurse. She was entitled to receive an IRB from Aviva in the amount of $400.00 per week for the 15-week period in dispute, being June 23, 2019 to October 26, 2019. During this entire period, the applicant also received EI sickness benefits in the amount of $562.00 per week. As a result, Aviva took the position that EI sickness benefits were wholly deductible pursuant to s. 7(3)(a) of the Schedule, and therefore paid the applicant a weekly IRB in the amount of $6.60.
The sections informing the dispute
7Section 7(3)(a) of the Schedule states that an insurer is entitled to deduct “70 per cent of any gross employment income received by the insured person as a result of being employed after the accident and during the period in which he or she is eligible to receive an income replacement benefit”.
8Under s. 4(1), “gross employment income” is defined as “salary, wages and other renumeration from employment, including fees and other renumeration for holding office, and any benefits received under the Employment Insurance Act (Canada)…”.
9The Schedule then defines “other income replacement assistance” in s. 4(1)(a)(i) as the “amount of any gross weekly payment for loss of income that is received by or available to the person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan, other than, (i) a benefit under the Employment Insurance Act (Canada)…”. This definition is important because it plays into the calculation of IRB under s. 7(1).
10While s. 47(1) permits an insurer to deduct amounts payable as a “temporary disability benefit” received in “respect of an impairment”, under s. 47(3)(f)(i), the Schedule then specifically excludes “benefits under the Employment Insurance Act (Canada)” as a “temporary disability benefit.”
11Finally, s. 3 of the Schedule defines “impairment” as a “loss or abnormality of a psychological, physiological or anatomical structure or function.”
The parties’ positions
12The applicant submits that the Schedule must be interpreted as a whole, giving equal weight to the various sections and how they interact, as opposed to a plain reading of wording in one narrow section. Accordingly, she submits that the Schedule specifically excludes benefits received under the Employment Insurance Act as “other income replacement assistance”. Further, she states that while s. 7(3)(a) includes benefits under the Employment Insurance Act, the wording of the section makes it clear that it is only “gross employment income as a result of being employed” that is deductible from an IRB payment. To this end, she argues that it is this specific language that differentiates EI maternity benefits, and other EI benefits that are received as a result of employment, from EI sickness benefits, which are received not as a result of being employed but rather as a result of the impairment sustained in the motor vehicle accident. Finally, she asserts that EI sickness benefits fall under the exclusion under the definition of “other income replacement assistance” and are therefore not deductible from the amount payable for her IRB.
13In response, Aviva submits that there is no ambiguity concerning EI sickness benefits. It asserts that the wording of the Schedule is clear and unambiguous—a point it states was conceded by the applicant when she asks for the “plain reading of wording in one narrow section” to be ignored—where the definition of “gross employment income” in s. 4(1) specifically includes “any benefits” received from EI. Aviva argues that the sections of the Schedule dealing with EI benefits—being s. 4(1), s. 5(1) and s. 47(3)—work harmoniously together and that by including EI sickness benefits within the definition of “gross employment income” and excluding them from “other income replacement assistance” and “temporary disability benefits”, the legislature ensured that benefits received pre- and post-accident are treated consistently.
14Surprisingly, this issue has never been squarely addressed. In submissions, the parties wrestled with the few cases that touch on whether the insurer has the right to deduct EI benefits from an IRB: Nelson v. State Farm Mutual Automobile Insurance Co., 2015 CarswellOnt 11170 (FSCO); Veeran v. State Farm Mutual Automobile Insurance Co., 2016 CarswellOnt 10005 (FSCO); and S.W. v. Aviva Insurance Co. of Canada, 2018 CarswellOnt 23228 (ON LAT).
EI sickness benefits are not deductible from IRB
15It is well-settled that the modern approach to statutory interpretation is that “the words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of Parliament.”2 Contrary to Aviva’s submissions, I find that there is genuine conflict in the Schedule as to whether EI sickness benefits can be deducted from an IRB. While I am alive to Aviva’s position that s. 7(3)(a) presents a clear meaning of the legislature’s intent, I find the other sections of the Schedule that pertain to EI benefit deductions create ambiguity that invites analysis beyond the plain meaning of s. 7(3)(a) and s. 4(1).
16To begin, I disagree with Aviva’s submission that the sections informing this dispute operate harmoniously and without conflict. Indeed, I find that the supposed clarity provided by s. 7(3)(a)—that insurers can deduct 70% of gross employment income from IRB, including all EI benefits—is muddied by the conflict between the s. 4(1) definitions of “gross employment income” (which includes benefits received under the Employment Insurance Act) and “other income replacement assistance” (which excludes benefits under the Employment Insurance Act), the latter of which is used to calculate IRB under s. 7(1). The alleged clarity to deduct EI benefits from IRB under s. 7(3)(a) is further obscured by the direction of s. 47(3)(a)(f)(i), which explicitly excludes benefits under the Employment Insurance Act as temporary disability benefits that can be deducted under s. 47(1).
17There is no direction in the Schedule, nor has authoritative case law been provided, that would suggest one section or definition on this issue has primacy over another in order to resolve this ambiguity. Unhelpful to the analysis is the fact that the Schedule does not parse out the different types of benefits available under the Employment Insurance Act even though they are substantively different. In a similar vein, I was not provided with authority to support Aviva’s policy argument that “by including EI benefits within the definition of “gross employment income” and excluding them from “other income replacement assistance” and “temporary disability benefits”, the legislature ensured that benefits received pre- and post-accident are treated consistently.”
18Instead, I am persuaded by the applicant’s interpretation, rooted in the well-settled principle that the Schedule is consumer-protection legislation, that the policy behind s. 7(3) and 4(1) is, as the applicant submits, “to permit individuals who are unemployed to qualify for an IRB and avoid double dipping on EI and an IRB, post-accident.” While I agree with the applicant that there is no explicit differentiation under the Schedule between the EI sickness benefits at issue here and EI regular benefits (such as unemployment or maternity benefits, as the case law focuses on), I am prepared to find that s. 47(3), which is under the section dedicated to “Payment of Benefits”, demonstrates that the legislature intended EI sickness benefits to be treated differently. Again, while the Schedule does not expressly provide that “EI sickness benefits” are not deductible as a temporary disability benefit, I agree that EI sickness benefits are the only EI benefits that fall under s. 47, as they are the only form of EI benefits that are received “in respect of an impairment”, as impairment is defined by s. 3. While it is not binding, and I agree with Aviva that the remarks are largely obiter dicta, the case law provided does generally support this rationale.
19In my view, this approach makes sense where an applicant suffers an accident-related impairment that prevents them from working, which I agree is different than EI benefits not received in respect of an impairment; for example, EI maternity benefits (which the case law has found to be deductible as income) or EI unemployment benefits (which requires the applicant to be willing and able to work). There is no dispute that the applicant’s accident-related injuries qualified as an “impairment” under s. 3, as her entitlement to IRB is not in question, and that her impairment was a temporary one, as the narrow period in dispute is only 15 weeks. Under s. 47(1), Aviva would be entitled to deduct the applicant’s IE sickness benefits as a temporary disability benefit received “in respect of an impairment” from the amount payable on an IRB. However, this is not the case, as in the same section, s. 47(3)(a)(f)(i) then specifically excludes benefits payable under the Employment Insurance Act under the definition of “temporary disability benefit”.
20I find that this would still be the case if EI sickness benefits were treated under another definition. For example, if the applicant’s EI sickness benefits received as a result of her accident-related impairments were treated like pre-accident income, the benefit would be considered “gross employment income”, pursuant to s. 4(1). However, where the EI sickness benefit is only received as a result of an impairment that renders the applicant unable to work, I find the ambiguity would be increased by s. 7(3)(a) because that section states that the applicant must be “employed after the accident and during the period in which he or she is eligible to receive” an IRB. While the applicant’s position was being held for her during her 15-week absence, I am not prepared to find that her EI sickness benefit was “employment income” because she was unable to work as a result of the accident during this time. Rather, it is, as the benefit is named, “employment insurance”. On this interpretation, I see how the adjudicators in Nelson and S.W. were able to arrive at the conclusion that other EI benefits are deductible from IRB because EI sickness benefits are the only EI benefits captured under s. 47(3) as resulting from an “impairment”, whereas childrearing and unemployment are not.
21Further, if the applicant’s EI sickness benefits are defined as “other income replacement assistance” under s. 4(1) then any deduction would be precluded by s. 4(1)(a)(i), which specifically excludes all EI benefits. If the applicant’s EI sickness benefits are defined as deductible under s. 47(1) as “collateral” or “temporary disability benefits” then that deduction is also precluded by s. 47(3)(f)(i), which again excludes all EI benefits. In this regard, I follow the applicant’s reply submissions “that EI sickness benefits, unlike EI maternity and unemployment benefits, are generally earned after the accident. If they are earned prior to the accident, they would have been earned as a result of an unrelated impairment.” I agree that this is not the case here. So, I quote the applicant again: “As such, the EI sickness benefit does not factor into the calculation of an IRB quantum as pre-accident income. If [Aviva] was entitled to deduct EI sickness benefits by the operation of s. 4(1), zero per-cent of the EI sickness benefit received would factor into the quantum of the IRB payable, but 70% of the EI sickness benefit would be deductible post-accident. This results in an over deduction.” I find this argument persuasive in my support for the applicant’s position that if the legislature did not intend to treat EI benefits differently, it would not have specifically included them as deductible under one section, and specifically excluded them as not deductible under another. I agree that this would result in an over-deduction as a result of an impairment.
22For these reasons, I agree with the applicant that her EI sickness benefits, received in respect of her impairment, are not deductible when calculating the quantum of IRB payable. Accordingly, I find that she is entitled to the further IRB payment in the amount of $5,901.00, plus interest under s. 51, as her EI sickness benefit was improperly deducted from her IRB.
The applicant’s request for costs
23Finally, the applicant requested costs in her submissions but did not provide particulars to support her claim, pursuant to Rule 19 of the Tribunal’s Common Rules of Practice & Procedure. In any event, I find no evidence of unreasonable, frivolous, vexatious or bad faith conduct to justify a costs order.
ORDER
24The applicant is entitled to payment in the amount of $5,901.00, plus interest under s. 51, representing the unpaid portion of her IRB that was improperly deducted as a result of her receipt of EI sickness benefits post-accident.
Released: February 16, 2021
__________________________
Jesse A. Boyce
Vice Chair
Footnotes
- O. Reg. 34/10, as amended.
- Rizzo & Rizzo Shoes Ltd., Re, 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27.