RECONSIDERATION DECISION
Before:
Derek Grant
Licence Appeal Tribunal File Number:
21-006930/AABS
Case Name:
Karla Coto v. Intact Insurance
Written Submissions by:
For the Applicant:
Joshua A Lindzon, Counsel
For the Respondent:
Christine Haddad, Counsel
OVERVIEW
1This request for reconsideration was filed by the respondent, Intact. It arises out of a decision dated September 7, 2023, in which I determined that she was not statute barred under s. 44 of the Schedule, from pursuing her claim for the disputed benefits; that she was entitled to an income replacement benefit (“IRB”), an attendant care benefit and an OCF-18. I further determined that she was not entitled to the remaining disputed OCF-18s, an OCF-6, an award or costs.
2The grounds for a request for reconsideration are found in Rule 18.2 of the Licence Appeal Tribunal Rules, 2023 (the “Rules”). To grant a request for reconsideration, the Tribunal must be satisfied that one or more of the following criteria are met:
a) The Tribunal acted outside its jurisdiction or committed a material breach of procedural fairness;
b) The Tribunal made an error of law or fact such that the Tribunal would likely have reached a different result had the error not been made; or
c) There is evidence that was not before the Tribunal when rendering its decision, could not have been obtained previously by the party now seeking to introduce it, and would likely have affected the result.
3The following remedies are available to the Tribunal on a request for reconsideration:
a. Dismiss the request;
b. Confirm, vary or cancel the decision or order; or
c. Order a rehearing on all or part of the matter.
4Intact seeks that my decision be varied to reflect that K.C. is entitled to an IRB quantum in the amount of $195.00 per week from August 7, 2020 to present.
RESULT
5Intact’s request for reconsideration is granted under Rule 18.2(b).
ANALYSIS
6Intact relies on the criteria under Rule 18 as follows:
a. That the Tribunal made an error of law in determining that CERB is to be used as “gross employment income”, as defined in s. 4(1) of the Schedule for the purposes of calculating IRB quantum;
b. The Tribunal acted outside its jurisdiction or committed a material breach of procedural fairness in that I allegedly failed to provide fulsome reasons why s. 4(3) of the Schedule was not applied; and
c. That the Tribunal made an error of fact by concluding that K.C. was both employed and self-employed, such that it applied s. 4(2)(2)(i) when calculating K.C.’s IRB quantum.
7The test for reconsideration under Rule 18.2 involves a high threshold. The reconsideration process is not an opportunity for a party to re-litigate its position where it disagrees with the Tribunal’s decision, or with the weight assigned to the evidence. The requestor must show how or why the decision falls into one of the categories in Rule 18.2.
Error of law - CERB as “gross employment income”
8Intact submits that I made a significant error of law in the decision by determining that CERB was considered “gross employment income” under s. 4(1) of the Schedule for the purpose of calculating IRB quantum under s. 7(2) of the Schedule.
9Under s. 4(1) of the SABS, gross employment income is defined as follows:
“gross employment income” means salary, wages and other remuneration from employment, including fees and other remuneration for holding office, and any benefits received under the Employment Insurance Act (Canada), but excludes any retiring allowance within the meaning of the Income Tax Act (Canada) and severance pay that may be received.
10Its position is that the Schedule contains only a single definition of “gross employment income” under s. 4(1), which much be equally interpreted under both ss. 7(2) and 7(3) to calculate IRB quantum. It submits that my interpretation of CERB as “gross employment income” under s. 7(3) led to an absurd result that was not in line with the intention of the Schedule or the principles of statutory interpretation.
11In its initial submissions, and on reconsideration, Intact relied on Foster v Aviva Gen. Ins. Co., 2021 CanLII 117413 (ON LAT) (“Foster”) in support of its position that CERB payments are not “gross employment income” under s. 4(1) because they are not analogous to “salary, wages, or other remuneration from employment.” Essentially, Intact’s position is that CERB is not to be included when calculating IRB quantum. I agree with Intact that an error of law was made.
12At paragraph 4 of the Foster reconsideration decision, the Vice Chair notes that, both the applicant and the respondent agreed that the Tribunal erred in determining that CERB is deductible from IRB under the Schedule. Foster further clarifies that CERB is not payments made by an employer, “but part of an ad hoc government relief program paid by the Canada Revenue Agency.” Foster further confirmed that as being employed is not a prerequisite to receiving CERB, it cannot be deducted from IRB under s. 7(3).
13K.C. argues that my reliance on Hordo and Hordo v CAA Insurance Company, 2022 CanLII 84691 (ON LAT) (“Hordo”) was correct, because the adjudicators in Hordo noted that in order to qualify for the CERB, “individuals must have stopped working for reasons related to COVID-19. They must have also earned a minimum of $5000 before taxes in 2019 from employment income, self-employment income, or benefits related to maternity or parental leave.”
14K.C. takes the position that the CERB payments she received should be considered income, as she received it as a result of not being able to work due to COVID-19. She submits that I made no error of law when I relied on her accountant’s report, which included the CERB payments in the calculation of the IRB quantum.
15On reconsideration, I find that an error of law was made in finding that the CERB payments would be considered “gross employment income” under s. 7(2). Specifically, the CERB payments should not be added to the calculation of IRB quantum, as was determined at first instance. In the initial decision, I accepted K.C.’s argument that her accounting report was correct. However, caselaw is limited on how CERB is to be interpreted, and I found K.C.’s argument persuasive.
16However, in consideration of the CERB mandate set out by the Government of Canada, I find the correct interpretation is that CERB is not to be considered income that is included in the calculation of IRB quantum. Accordingly, Hordo should not be followed, because, despite the opinion that an insured must be employed to receive the CERB, the decision does not establish that CERB payments should be included as part of the calculation of IRB quantum. I will further clarify this below.
17As noted by Intact, the Government of Canada introduced the Canada Emergency Response Benefit to help workers and businesses, in a news release dated March 25, 2020. According to the release, the purpose of the benefit is as follows:
The CERB would cover Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures. The CERB would apply to wage earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI).
Additionally, workers who are still employed, but are not receiving income because of disruptions to their work situation due to COVID-19, would also qualify for the CERB. This would help businesses keep their employees as they navigate these difficult times, while ensuring they preserve the ability to quickly resume operations as soon as it becomes possible.
18It is clear that according to the CERB news release, the intention is to provide financial support to employed and self-employed Canadians. Further, the Government of Canada set out the CERB eligibility criteria (Canada Emergency Response Benefit (CERB) - Canada.ca) as follows:
The Benefit was available to workers:
a. residing in Canada, who were at least 15 years old;
b. who stopped working because of reasons related to COVID-19 or were eligible for Employment Insurance regular or sickness benefits or have exhausted their Employment Insurance regular benefits or Employment Insurance fishing benefits between December 29, 2019 and October 3, 2020;
c. who had employment and/or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
d. who did not quit their job voluntarily.
19As I understand it, there is a requirement of employment in order to qualify for the CERB; in that one must be employed or self-employed, or a business owner. In addition, the CERB payment amounts are taxable. Anyone who receives the CERB must report the amount received as income when filing a personal income tax return.
20Despite this, I find that CERB payments, while not deductible from calculating IRB quantum, also cannot be added in when calculating IRB quantum. It is a separate form of income that is repayable to the Government of Canada and is therefore not income that is for the purpose of remuneration for employment or self-employment, unlike earned wages.
21CERB payments were a time-limited income structure, implemented by the Government of Canada in response to COVID-19 pandemic. While intended to support those that were not able to work due to COVID-19, it was not an income-based solution to supplement any additional income earned (or income available under the Employment Insurance Act) during the period of eligibility. As a temporary relief measure, CERB was not intended to replace a regular salary or result in a “double-dipping” income earning situation for those receiving benefits under Employment Insurance.
22Accordingly, I find that my decision should be varied to reflect that K.C. is entitled to an IRB quantum in the amount of $195.00 per week.
23Intact also raised the issue of procedural fairness (not providing reasons why I did not rely on s. 4(3) of the Schedule) and error of fact (finding that K.C. was employed and self-employed). On reconsideration, s. 4(3) is of no consequence, as Intact’s position was that relying on s. 4(3) supports its claim that CERB should not be included in the IRB quantum calculation. Further, whether K.C. was employed or self-employed does not impact the IRB quantum calculation, as the quantum issue was based on whether the CERB payments were to be included, and not on her employment status. In light of my finding that I agree with Intact that the IRB quantum should be $195.00 per week, and this was its main issue of contention on reconsideration, an analysis of the additional issues on reconsideration is not necessary.
ORDER
24Intact’s request for reconsideration is granted. It was an error of law for the Tribunal to determine that CERB is to be included in the calculation of IRB quantum under the Schedule.
25Accordingly, pursuant to Rule 18.4(b)(i) of the Rules, I order that paragraph 90 of the decision dated September 7, 2023 be varied to reflect the following result regarding K.C.’s IRB entitlement:
K.C. is entitled to IRBs in the amount of $195.00 per week from August 7, 2020 to date and ongoing. Interest is payable pursuant to s. 51 of the Schedule.
Derek Grant
Adjudicator
Tribunals Ontario – Licence Appeal Tribunal
Released: December 8, 2023