Eid v. Allstate Insurance Company of Canada, 2022 CanLII 87729

Citation: Eid v. Allstate Insurance Company of Canada, 2022 CanLII 87729

Licence Appeal Tribunal File Number: 20-001143/AABS

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:

Vivianne Eid Applicant

and

Allstate Insurance Company of Canada Respondent

DECISION [AND ORDER]

ADJUDICATOR: Tavlin Kaur

APPEARANCES:

For the Applicant: Vivianne Eid, Applicant Matthew J Gervan, Counsel

For the Respondent: Allstate Insurance Company of Canada Shawn O'Connor, Counsel Sasha Willms, Counsel

HEARD: By Way Of Written Submissions

REASONS FOR DECISION AND ORDER

BACKGROUND

1The applicant was involved in an automobile accident on May 22, 2017, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (including amendments effective June 1, 2016) (‘Schedule’).The applicant was denied certain benefits by the respondent and submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”).

ISSUES

2The issues to be decided in the hearing are:

1. What is the proper income period to calculate the applicant’s income replacement benefit (‘IRB’) in these circumstances? a. Does the calculation provided for in s. 4(3) of the Schedule infringe the Ontario Human Rights Code (the “Code”)? b. If the calculation of the IRB in these circumstances infringes the Code, is it appropriate to craft an individual remedy which does not infringe the Code?
2. Is the applicant entitled to a weekly IRB, quantum in dispute, from May 29, 2017 to December 31, 2017?
3. Is the applicant entitled to a weekly IRB, quantum in dispute, from January 1, 2018 to December 31, 2018?
4. Is the applicant entitled to a weekly IRB, quantum in dispute, from January 1, 2019 to December 31, 2019?
5. Is the applicant entitled to a weekly IRB, quantum in dispute, from January 1, 2020 to date and ongoing?
6. Is the applicant entitled to an award under O. Reg 664 because the respondent unreasonably withheld or delayed the payment of benefits?
7. Is the applicant entitled to interest on any overdue payment of benefits?

RESULT

3The proper income period to calculate the applicant’s IRB is the last completed taxation year prior to the accident.

4I find that section s.4(3) of the Schedule infringes the Code on the ground of sex/pregnancy.

5I find that the Code does not authorize me to craft the remedy sought by the applicant.

6For the period of May 29, 2017 to December 31, 2017, the quantum is $133.85 per week, which is the amount that the respondent calculated based on the applicant’s 2016 income tax return without the deduction from the capital cost allowance (‘CCA’) from the IRB.

7For the period of January 1, 2018 to December 31, 2018, the quantum is $73.15 per week, which is the amount that the respondent calculated based on the applicant’s 2016 income tax return without the deduction from the CCA from the IRB.

8For the period of January 1, 2019 to May 19, 2019, the applicant is not entitled to an IRB because the gross weekly post-accident income exceeds the IRB before the adjustment of the post-accident income.

9For the period of May 20, 2019 to December 31, 2019, the quantum is $28.18 per week, which is the amount that the respondent calculated based on the applicant’s 2016 income tax return without the deduction from the CCA from the IRB.

10For the period of January 1, 2020 to date and ongoing, the applicant has not established the quantum and the entitlement to the IRB.

11The applicant is not entitled to an award under O. Reg 664 because the respondent unreasonably withheld or delayed the payment of benefits.

12The applicant is entitled to interest on any overdue payment of benefits.

ANALYSIS

Background

13The applicant is self-employed. She went on maternity leave in October 2015 after giving birth to her daughter. She returned to work on August 15, 2016. The applicant submitted that her pre-accident fiscal year income was negatively affected by her pregnancy and maternity leave. The calculation of the IRB on the basis of the last fiscal year results in unfairness and discrimination.

14The applicant submitted that if she were an employee, she would be entitled to the choice of an IRB calculation based on either the past four weeks before the accident multiplied by 13 or 52 weeks before the accident, as per section 4(2) of the Schedule. She asserted that self-employed individuals who choose to start a family and take maternity leave are treated differently from employed individuals.

15The applicant submitted that if the Tribunal were to fail to consider a person’s time away from their self-employment while on maternity or parental leave, it would ignore the Code and create a breach of their fundamental human rights. Relevant to the applicant, section 10(2) of the Code states:

The right to equal treatment without discrimination of sex includes the right to equal treatment without discrimination because a woman is or may become pregnant.

16Section 11 of the Code, which deals with constructive discrimination, states:

(1) A right of a person under Part I is infringed where a requirement, qualification or factor exists that is not discrimination on a prohibited ground but that results in the exclusion, restriction or preference of a group of persons who are identified by a prohibited group of discrimination and of whom the person is a member, except where:

a. The requirement, qualification or factor is reasonable and bona fide in the circumstances; or

b. It is declared that this Act, other than in section 17, that to discriminate because of such ground is not an infringement of a right.

(2) [The Human Rights Tribunal of Ontario] or a court shall not find that a requirement, qualification, or factor is reasonable and bona fide in the circumstances unless it is satisfied that the needs of the group of which the person is a member cannot be accommodated without undue hardship on the person responsible for accommodating those needs, considering the cost, outside sources of funding, if any, and health and safety requirements, if any.

17The applicant submitted that the Tribunal should interpret s. 4(3) of the Schedule to permit the calculation of her IRB on the basis of the last 52 weeks rather than the last fiscal year (2016). She submitted that a 52-week calculation of her IRB would be a proper contextual interpretation of section 4 of the Schedule and would be consistent treatment with individuals who do not become pregnant or take maternity or paternity leave and therefore would not infringe the Code.

18The respondent submitted that the applicant was solely self-employed at the date of the accident. Therefore, s. 4(2)2(i) of the Schedule does not apply to the applicant’s claim. The calculation of the applicant’s pre-accident gross annual income is determined by s. 4(3) of the Schedule, which provides that a self-employed person’s pre-accident income is based on the last completed taxation year before the accident. The calculations of the applicant’s IRB by Davis Martindale are based on the applicant’s last completed taxation year prior to the accident.

19The respondent submitted that the Tribunal in K.D. v Aviva was not persuaded that a strict interpretation of s. 4(3) of the Schedule may result in an unjust result or other unfairness to applicants. Section 4(3) treats self-employed persons equally. For all self-employed persons, leaves of absence will affect their income. If the leave relates to a protected ground under the Code such as family status, such an impact could be considered discriminatory under the Code. However, s. 4(3) could result in potential unfair results to a self-employed applicant for a myriad of reasons, including reasons not related to the Code such as changes to the state of the economy, changes to the demand in the industry, impacts of a global pandemic, etcetera, which an applicant could argue is unfair.

Which part of section 4 applies to the applicant?

20The applicant submitted that the “use of the word ’may’ in section 4(3) of the Schedule ought to be interpreted in a permissive way and in a contextual way in keeping with all of section 4 of the Schedule. This would permit insurers to have flexibility in calculation of the IRB for self-employed individuals, regardless of their sex or family status. It would also meet the consumer protection goals of this important income support legislation,” (emphasis in original).

21The parties were requested to provide additional submissions in relation to the human rights argument. The applicant submitted:

Subsection 4(2)3 is permissive. It indicates that the Applicant “may” designate her gross annual income as her income in the last fiscal year of the business. It does not mandate this approach. The term “shall” would have been used had this approach been mandated. Subsection 4(3) should be interpreted in light of s. subsection 4(2)3 which permits, but does not mandate, that the Applicant’s last fiscal year be used to calculate her annual self-employment income.

22In response, the respondent submitted:

The permissive language referred to in the applicant’s submissions is found in subsection 4(2) of the Schedule, and not subsection 4(3). Subsection 4(2) does not apply to the applicant because she does not meet the requirements in subsections 5(1) 1.i and ii. The Applicant wishes to calculate her pre-accident income based on a misinterpretation of s. 4(2). This issue was addressed by Vice Chair Farlam in K.D. v. Aviva Insurance Company, 2020 ONLAT 18-011646/AABS [K.D. v Aviva] at paragraph 17:

The applicant’s submission that he should be allowed to calculate his pre-accident income based on the 52 weeks pre-accident is not persuasive. This argument is based on a misinterpretation of s. 4(2) as has been explained by the Tribunal before.

Although not binding on me, I agree with the interpretation of Adjudicator Norris where he stated:

…although section 4(2) applies to self-employed persons, the reference to qualifying under section 5(1) means section 4(2) is only applicable where the self-employed person was also employed or recently employed in the time preceding the accident. This was reiterated in LAT decision 17-002366/AABS where the claimant was self-employed and employed on a part-time basis, thus allowing the claimant to choose between calculating IRB based on the most recent 52 weeks and the last fiscal year.

23I agree with that the permissive language is found in section 4(2). I find that the applicant does not meet the criteria in ss. 4(2)2 or 4(2)3 of the Schedule. I agree with the reasoning of Adjudicator Norris. Section 4(2)2 applies only where the self-employed person was also employed or recently employed in the time preceding the accident. In this case, the applicant was solely self-employed prior to the accident. With respect to s. 4(2)3, I find that it is not applicable because she did not meet the criteria in s. 4(2)2. Even if she did meet the criteria, she would not be eligible under s. 4(2)3 because she was not self-employed for at least one year before the accident as she was away on maternity leave. In short, no part of s. 4(2) applies to the applicant.

24I find that s. 4(3) of the Schedule applies to the applicant. It states that “a self-employed person’s weekly income or loss from self-employment at the time of the accident is the amount that would be 1/52 of the amount of the person’s income or loss from the business for the last completed taxation year as determined in accordance with Part I of the Income Tax Act (Canada).” I find that the correct period to calculate the applicant’s IRB in the circumstances is the last completed taxation year prior to the accident.

25I also find that section 4(3) of Schedule has a discriminatory effect on the applicant because of her pregnancy, which is found under the protected ground of sex. This is prohibited under section 10(2) of the Code. The respondent’s submissions are equivocal but do state that “if a leave relates to a protected ground, such as family status, such an impact could potentially be considered discriminatory under the Code.” However, for the reasons that follow, I find that the Tribunal cannot grant the remedy that the applicant is seeking.

Does the Tribunal have express or implied authority to craft the remedy sought by the applicant?

26The applicant submitted that s. 47(2) of the Code and case law provides the Tribunal with express and implied authority to grant the remedy sought by the applicant, and that the remedy sought by the applicant is mandated by the Code as the provisions in the Code prevail over the Insurance Act and the Schedule.

27The respondent submitted that there is no express or implied authority in the Insurance Act, the Schedule, or case law for the Tribunal to craft a remedy not found within the Schedule. The remedial powers of the Tribunal are limited to applying the Schedule as specified by the legislature in subsections 280(1) to (6) of the Insurance Act, and that there is no residual power to amend the legislated schedule of benefits. There is no express or implied authority for the Tribunal to craft the remedy being sought by the applicant because the Code does not authorize the Tribunal to amend or rewrite the Schedule to bring it into compliance with the Code.

28In my view, a statutory administrative tribunal obtains its jurisdiction from two sources: explicit powers expressly granted by statute, and implicit powers by application of the common law doctrine of jurisdiction by necessary implication: see ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board), 2006 SCC 4 at para. 38. The Legislature has given the Tribunal exclusive jurisdiction to resolve disputes relating to an insured’s entitlement to statutory accident benefits pursuant to s. 280 of the Insurance Act and, more specifically, s. 280(4) requires this Tribunal to resolve such disputes in accordance with the Schedule.

29Based on my review of the Schedule and the parties’ submissions, I find that there is no express and implied authority which allows the Tribunal to amend the Schedule. The first principle is that the Legislature is the entity with the authority to enact, amend or repeal the legislation in its jurisdiction. If the Tribunal were to exercise any such legislative activity, it would usurp impermissibly the role of the Legislature. Second, it is a basic principle of statutory interpretation that every word that is found in a statute has been included there for a reason and is intended to have a purpose. If the Legislature intended to bestow the Tribunal with the authority to amend legislation, then such empowerment would be reflected in the legislation.

30Moreover, there must be a reason as to why the Legislature set out different criteria regarding how the IRB is to be calculated when one is employed, not employed or self-employed. I am required to respect the Legislature’s clear intention even though it may result in unfairness to the applicant. The Tribunal does not have the inherent jurisdiction of a court, and its jurisdiction is limited to that conferred upon it, expressly or impliedly, by statute.

Does the Code give the Tribunal jurisdiction to amend the Schedule?

31The applicant submitted that the Tribunal is within its jurisdiction to decide and interpret the Schedule to not infringe the Code. The applicant relies on the Supreme Court of Canada’s decision of Tranchemontagne v Ontario (Director, Disability Support Program), 2006 SCC 14 (‘Tranchemontagne’), where Bastarache J stated that “the Code is fundamental law. The Ontario legislature affirmed the primacy of the Code in the law itself, as applicable both to private citizens and public bodies.” Justice Bastarache further states:

The importance of the Code is not merely an assertion of this Court. The Ontario legislature has seen fit to bind itself and all its agents through the Code…. Further, it has given the Code primacy over all other legislative enactments. As a result of this primacy clause, where provisions of the Code conflict with provisions in another provincial law, it is the provisions of the Code that are to apply.

32The applicant submitted that the Supreme Court in Tranchemontagne held that administrative tribunals have the jurisdiction to decide a question of law. Therefore, this Tribunal has the jurisdiction to consider and apply the Code.

33In response, the respondent submitted that the applicant’s request for a remedy necessarily requires this Tribunal to amend the Schedule. The Supreme Court in Tranchemontagne recognized the limits of any implied authority of a tribunal to consider the Code. The Court stated at paragraph 29 that the Social Benefits Tribunal had the jurisdiction to consider the Code to determine eligibility for a benefit but could not decide to award an applicant income support in an amount inconsistent with the regulations. The respondent is relying on CUPE, Local 1999 v Lakeridge Health Corp., 2012 ONSC 2051 and Malkowski v Ontario Human Rights Commission, 2006 CanLII 43415 (ON SCDC) for the proposition that the Code does not grant the Tribunal the jurisdiction to amend the Schedule. I agree for the reasons that follow.

34In Tranchemontagne, Bastarache J stated:

Thus, whether a provision is constitutionally permissible and whether it is consistent with the Code are two separate questions involving two different kinds of scrutiny. When a tribunal or court applies s. 47 of the Code to render another law inapplicable, it is not “going behind “that law to consider its validity, as it would be if it engaged in the two activities denied the SBT by s. 67(2) of the OWA. It is not declaring that the legislature was wrong to enact it in the first place. Rather it is simply applying the tiebreaker supplied by, and amended according to the desires of, the legislature itself. The difference between s.47 of the Code and s. 52 of the Constitution Act, 1982, is therefore the difference between following legislative intent and overturning legislative intent.

35In Lakeridge, the Divisional Court found that Tranchemontagne did not go so far as to confer jurisdiction on the Pay Equity Tribunal to deal with human rights violations in general. According to the Court:

In Tranchemontagne, the Supreme Court held that the Social Benefits Tribunal (“SBT”) of Ontario, in determining a claim for disability benefits, was required to determine whether a section of the Ontario Disability Support Program Act (“ODSPA”) was contrary to the Code. Although the ODSPA provided income support and benefits to eligible individuals, s. 5(2) excluded those with an alcohol or drug addiction. The Supreme Court held that the SBT had the authority to apply s.47(2) of the Code in order to decided if s.5(2) of the ODSPA authorized or required a contravention of the Code. Thus, in Tranchemontagne, the SBT was required to deal with the Code contravention because it was necessary to consider the Code in order to determine the dispute before it -- namely, whether the individual claimants were eligible for disability benefits (at paras 50, 52).

36The Divisional Court in Malkowski provides some guidance in this regard. Referring to Tranchemontagne, the Court stated that:

These passages highlight the distinction in the present case between the Tribunal ruling that an existing provision of the Building Code cannot prevail over the Code, on the one hand, and the Tribunal purporting to add words to the Building Code that were not put there by the legislature, on the other hand. In the first case, the Tribunal is following the direction of the legislature in applying the supremacy of the Code over the language of the other Act. In the latter case, the Tribunal would be overturning the legislative intent not to place those words in the Building Code, a function which only the Charter can authorize.

37The Court considered other cases which dealt with the effect of “primacy clauses” similar to s. 47 of the Code. For example, in Newfoundland and Labrador (Human Rights Commission) v. Workplace Health, Safety and Compensation Commission, 2005 NLCA 61 at para. 38, the Newfoundland Court of Appeal held that the Board of Inquiry had “no power to read down or read in legislative changes to ensure compliance with the Human Rights Code.” A similar conclusion was reached by the Manitoba Court of Appeal in Gale Estate v. Hominick, 1997 CanLII 2561 (MBCA), where the Court found that the province’s human rights acts “were never intended to address or provide a mechanism to deal with allegedly discriminatory provincial legislation”.

38The Court in Malkowski stated that:

The Code is not a constitutional document. It has been described as quasi-constitutional, and as more important than all others (save for the constitutional laws), but it falls short of being a constitutional document entitling the Tribunal or the Courts to disallow legislation or require changes to it. The farthest that the Code goes in this direction is s. 47 (2) which provides:

Where a provision in an Act or regulation purports to require or authorize conduct that is a contravention of Part I, this Act applies and prevails unless the Act or regulation specifically provides that it is to apply despite this Act.

The language of the last clause of this section indicates that the Legislature has reserved to itself, and to those it empowers to make regulations, the right to decide the relationship between the Code and particular legislation. This is incompatible with any right in the Tribunal to make that decision.

39The key takeaway from the case law is that there are limits to the Code. I am persuaded by the decisions submitted by the respondent. The Tribunal can exercise the power specifically given to it to apply the Code as prevailing over the actual enactment in the Insurance Act, where the latter has a discriminatory effect. However, the Code does not authorize the remedy sought by the applicant, which would require reading in or amending the language in section 4(3) of the Schedule. Moreover, the wording in the Schedule and Insurance Act do not authorize the Tribunal to add language to what has been enacted by the Legislature. The applicant asks me to do just that, a power which I find to be usurping the role of the Legislature and therefore outside of the Tribunal’s jurisdiction.

Quantum of the IRB

40The parties agree that the applicant is entitled to the IRB. The issue in dispute is the weekly quantum for the IRB.

41It is the applicant’s position that the 52-week calculation should be allowed in the circumstances. Alternatively, the applicant submits that the last fiscal year calculation ought to be based on a fiscal year from January 1, 2017 through to May 22, 2017. The applicant is relying on the reports of ADS Forensics (the ‘ADS report’).

42The respondent submitted that the correct period to calculate the applicant’s IRB in the circumstances is the last completed taxation year prior to the accident pursuant to section 4(3) of the Schedule. The respondent is relying on the reports of Davis Martindale (the ‘Davis Martindale report’).

43The applicant bears the onus of proving on a balance of probabilities the weekly quantum of her income replacement benefit.

Analysis

44Section 5(1)2 of the Schedule provides that an insured person can be eligible for IRB if they were self-employed at the time of the accident and they suffer, as a result of and within 104 weeks after the accident, a substantial inability to perform the essential tasks of their self-employment.

45Section 4(3) of the Schedule outlines how the IRB is calculated if the claimant was a self-employed person at the time of the accident. Section 4(3) provides that the IRB is calculated on income from the most recent completed taxation year. This section provides that the weekly income or loss from self-employment at the time of the accident is 1/52 of the amount of the person’s income or loss from the business for the last completed taxation year.

46The onus is on the applicant to prove entitlement to the IRB on a balance of probabilities.

47The applicant relies solely on the reports of ADS Forensics (the ‘ADS Report’) along with the supporting documentation. The respondent relies on the accounting reports of Davis Martindale (the ‘Davis Martindale Report’).

48The respondent submitted that the calculations of the applicant’s IRB by Davis Martindale calculated based on the applicant’s last completed taxation year prior to the accident (2016) are correct.

49As I have determined that section 4(3) of the Schedule applies as the applicant was self-employed at the time of the accident, the quantum must be calculated based on the last completed taxation year before the accident, which is 2016. I am not considering the first two scenarios provided by the applicant.

Company’s revenues in 2016

50The respondent raised some issues with respect to the ADS report. There was some discrepancy with the amount that ADS Forensics had calculated with respect to the company’s revenues during 2016. The revenue for 2016 was $30,305.87. This was greater than the gross revenue reported for tax purposes in 2016. The gross revenue was $27,600.00. ADS Forensics was unaware of the source of the discrepancy. As a result, Davis Martindale relied on the revenues which for reported for tax purposes.

51The applicant submitted that the difference of $2,665.00 was due to a reallocation of income to be on an accrual basis. The ADS Forensics calculation takes the difference of $2,665.00 of revenue that was reported in the 2017 tax return and reallocates it to 2016, which is called reporting on an accrual basis. An accrual basis is acceptable for tax purposes by the Income Tax Act and therefore the calculation of ADS Forensics is consistent with section 4(5) of the Schedule and past FSCO case law. Moreover, it is important to note that s. 4(5) of the Schedule does not require the income to be limited to ‘as reported for tax’, but rather does not permit income the ‘person has failed to report contrary to that Act or legislation’.

52I am not persuaded by the applicant’s position. The ADS report stated that, “The cause of the difference is unknown. The pre-accident income is limited to what was reported for tax purposes in accordance with s.4(5) of the Schedule with the difference being allocated based on a percentage of revenue. All post-accident income is included.” I find that the amount that was reported to the CRA on the applicant’s income tax report is an accurate depiction of what the revenues were for 2016. While ADS Forensics may have reallocated the difference of $2,665.00 to 2016, the amount is not what was reported by the applicant to the CRA in 2016. Moreover, this overstates the amount payable for the income replacement benefit. Therefore, I assign less weight to this report.

Capital Cost Allowance

53The applicant did not claim the maximum allowable CCA in 2016 and 2017. The applicant submitted that she did not include CCA in the 2016 and 2017 tax returns although some small amounts could have been claimed. The revised ADS report amended the IRB calculations by increasing the applicant’s 2018 income by the $2,712.00 CCA deduction The Davis Martindale report of the respondent reduced the applicant’s pre-accident income based on the CCA that she could have claimed in 2016. The applicant is of the view that the respondent’s accountants failed to give credit for the expense in any of their post-accident period calculations. Moreover, the respondent failed to take into account the applicant’s vehicle expense, which was only partially used for business purposes, resulted in an overstatement of CCA in their calculations.

54The respondent submitted ADS Forensics overstated the applicant’s pre-accident income and IRB payable by failing to account for the CCA prior to the accident. In support of that position, the respondent points to the Davis Martindale report dated June 30, 2021, which relies on a FSCO decision, Royal Insurance Company of Canada and Dimitrious James Aramakis (P96-00081), 1998 CarswellOnt 283, which noted that, “the method of financing a business asset should not unduly affect the calculation of income and loss from self-employment. Someone who leases an asset and someone who purchases an asset should be treated similarly under the Schedule”. As such, Director’s Delegate Rotter concluded that, “CCA must be taken into account pursuant to normal income tax practices. It should not be excluded from the calculation of income or loss for self-employment”.

55In my view, the Davis Martindale report applied the correct taxation year and relied on the applicant’s reported income, which is an accurate representation of the company’s earnings in 2016. However, I find Aramakis to be of limited assistance for a variety of reasons. Aramakis is distinguishable because Mr. Aramakis claimed the CCA. In the facts before me, the applicant did not claim it prior to the accident.

56Further, the Aramakis case is in relation to the previous version of the Schedule (1994), which included provisions dealing with “expenses that are eligible for capital cost allowance, and how those were to be applied. Section 83 of the 1994 Schedule deals with the calculation of a self-employed person's income. It states that (emphasis added):

83. For the purpose of this Regulation, a person's income from self-employment shall be determined in the same manner as the person's profit from the business in which the person was self-employed would be determined under the Income Tax Act (Canada) and the Income Tax Act (Ontario), but without taking into account,

(a) expenses that are eligible for capital cost allowance or an allowance on eligible capital property;

(b) capital gains or losses; or

(c) losses deductible under section 111 of the Income Tax Act (Canada).

57Subsection 10(8) of the 1994 Schedule deals with the method for calculating or determining losses from self-employment. It provides (emphasis added):

(8) For the purpose of subsection (7), losses from self-employment shall be determined in the same manner as losses from the business in which the person was self-employed would be determined under subsection 9(2) of the Income Tax Act (Canada) and the Income Tax Act (Ontario), without making any deductions for,

(a) expenses that were not reasonable or necessary to prevent a loss of revenue;

(b) salary expenses that were paid to replace the person's active participation in the business, except to the extent that those expenses were reasonable for that purpose;

(c) non-salary expenses that were different in nature or greater than the non-salary expenses incurred before the accident, except to the extent that those expenses were necessary to prevent or reduce any losses resulting from the accident;

(d) expenses that are eligible for capital cost allowance or an allowance on eligible capital property; or

(e) losses deductible under section 111 of the Income Tax Act (Canada).

58Sections 83 and 10(8) are no longer in force and effect. The current Schedule is silent as to whether the CCA must (or can) be deducted from the IRB. None of the sections from the previous Schedule are mirrored or included in this version of the Schedule.

59Section 1100 of the Income Tax Act provides an individual with the option of deducting the CCA for each income tax year. It is not mandatory; it is an option. If the Schedule mandated that the CCA must be taken into account when calculating the IRB, it would effectively penalize an applicant who opted not to claim the CCA in that tax year, which would be inconsistent with the consumer protection nature of the Schedule. I find that the legislature’s choice to omit the provisions of sections 83 and 10(8) of the 1994 Schedule in the current Schedule to be consistent with the existence of the taxpayer’s option provided by section 1100 of the Income Tax Act.

60The respondent submitted that the accrual principle is considered to be the most valid accounting method of determining a business’ net income consistent with the Canada Revenue Agency. While this method is followed by accountants, section 280(4) of the Insurance Act states that I must resolve this IRB dispute in accordance with the Schedule. Section 4(4) of the Schedule notes:

(4) A self-employed person’s loss from self-employment after an accident is determined in the same manner as losses from the business in which the person was self-employed would be determined under subsection 9 (2) of the Income Tax Act (Canada) without making any deductions for,

(a) any expenses that were not reasonable or necessary to prevent a loss of revenue;

(b) any salary expenses paid to replace the self-employed person’s active participation in the business, except to the extent that the expenses are reasonable in the circumstances; and

(c) any non-salary expenses that are different in nature or greater than the non-salary expenses incurred before the accident, except to the extent that those expenses are reasonable in the circumstances and necessary to prevent or reduce any losses resulting from the accident. O. Reg. 34/10, s. 4(4).

61This section is similar to section 10(8) of the 1994 version of the Schedule with some changes. This section does not include section 10(8)(d), which addresses the CCA. It is a basic principle of statutory interpretation that every word that is found in a statute has been included there for a reason and is intended to have a purpose. The fact that the legislature departed from the previous Schedule and decided not to include any sections that address the CCA when calculating the IRB leads me to believe that they did not intend for it to be included. If the legislature intended to include the CCA in this version of the Schedule, then it would have certainly been reflected as it has been in previous versions of the Schedule. While the respondent is of the view that the CCA is a legitimate business expense, I believe that the legislature must have considered it and made its policy choice when enacting the current Schedule.

62Therefore, for all of the reasons noted above, I find that the quantum per week for issues no. 2 to 4 is the amount that the respondent calculated based on the applicant’s 2016 income tax return without the deduction of the CCA from the IRB as set out on p. 10 of the Davis Martindale report dated August 22, 2022. I find this report to be more persuasive because it has provided without the deduction of the CCA, which has been issue central to this dispute.

63For issue no 5, the respondent submitted that in the most recent reports from both Davis Martindale (June 30, 2021) and ADS Forensics (May 28, 2021), the accountants only provided calculations for the applicant’s IRB from May 29, 2017 to December 31, 2019. Davis Martindale has not been provided with documentation supporting the company’s revenues beyond December 31, 2019. Therefore, the respondent is unable to advise on the quantum of the applicant’s IRB from January 1, 2020 and ongoing.

64The applicant did not make cogent submissions or provide additional evidence on this point. Based on the review of the evidence, the ADS report dated June 25, 2020 suggests that the applicant is entitled to $400.00 from January 2020 to ongoing. However, it is unclear as to how ADS Forensics came to that conclusion in light of the fact that documents from the 2020 income tax year were not provided. For this reason, I am assigning less weight to this report.

65Moreover, the most recent reports from ADS Forensics dated May 28, 2021 and August 22, 2022 do not address the quantum for January 2020 to date and ongoing.

66As such, I find that the applicant has failed to prove her entitlement and the quantum from January 1, 2020 to ongoing.

Is the applicant entitled to an award under O. Reg 664?

67The applicant submitted that the respondent is required to provide a service to the applicant in good faith. It is alleged that the respondent ignored the Code and tried to impose the lowest possible IRB calculation. Moreover, it is alleged that the respondent has continuously ignored the evidence. The applicant submitted that “…the Respondent is knowingly discriminating against her because they know that she was off work in the last fiscal year before the accident for maternity leave. A special award would be akin to an award of human rights infringement damages and is appropriate in these circumstances.”

68The respondent is of the view that an award is not warranted. It was submitted that that the decisions that were made in relation to the IRB were based on the provisions of the Schedule, supporting financial documents provided by the applicant, and the accounting reports in its possession at the time. It was submitted that the respondent acted reasonably throughout and did not withhold or delay any payments to the applicant. The respondent relied on the advice of its accounting firm which it retained for the purposes of determining the quantum of IRBs payable to the applicant.

69It is well settled that an award should not be ordered simply because an insurer made an incorrect decision. Rather, in order to attract an award under O. Reg. 664, the insurer’s conduct must be excessive, imprudent, stubborn, inflexible, unyielding or immoderate.

70In my view, the applicant has not provided any evidence that proves that the respondent unreasonably withheld or delayed payments to her. Submissions are not evidence. The applicant must direct the Tribunal to the evidence. The applicant has failed to do so. As such, I find that that the applicant is not entitled to an award.

ORDER

71It is ordered that:

a. The IRB will be calculated based on the last completed taxation year prior to the accident, which is 2016.

b. For the period of May 29, 2017 to December 31, 2017, the quantum is the $133.85 per week, which is the amount that the respondent calculated based on the applicant’s 2016 income tax return without the deduction from the CCA from the IRB.

c. For the period of January 1, 2018 to December 31, 2018, the quantum is $73.15 per week, which is the amount that the respondent calculated based on the applicant’s 2016 income tax return without the deduction from the CCA from the IRB.

d. For the period of January 1, 2019 to May 19, 2019, the applicant is not entitled to an IRB because her gross weekly post-accident income exceeded the IRB before adjusting the post-accident income.

e. For the period of May 20, 2019, the quantum is the $28.18 per week, which is the amount that the respondent calculated based on the applicant’s 2016 income tax return without the deduction from the CCA from the IRB.

f. For the period of January 1, 2020 to date and ongoing, the applicant is not entitled to the IRB.

g. The applicant is not entitled to an award under O. Reg 664 because the respondent unreasonably withheld or delayed the payment

h. The applicant is entitled to interest on any overdue payment of benefits.