Licence Appeal Tribunal
Licence Appeal Tribunal File Number: 23-000630/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:
Cara Hernould
Applicant
and
TD General Insurance Company
Respondent
DECISION
VICE-CHAIR: Julian DiBattista
APPEARANCES:
For the Applicant: Amelia Martin, Counsel
For the Respondent: Sean Cheskes, Counsel
HEARD: By way of written submissions
OVERVIEW
1Cara Hernould, the applicant, was involved in an automobile accident on April 26, 2021, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). The applicant was denied benefits by the respondent, TD General Insurance Company, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
ISSUES
2The issues in dispute are:
i. Is the applicant entitled to an income replacement benefit (“IRB”) in the amount of $48.24 per week from November 1, 2021 to August 31, 2022?
ii. Is the applicant entitled to interest on any overdue payment of benefits?
RESULT
1The quantum of the applicant’s IRB is calculated at $0.00.
2As no benefits are owing, no interest in payable.
PROCEDURAL ISSUE
3The respondent has raised a procedural issue in their submissions.
4The respondent notes that in paragraph 1 of the applicant’s written submissions, the applicant frames the disputed time period for the IRB from November 1, 2021 to February 26, 2023.
5The Case Conference Report and Order dated September 6, 2023 lists the time period in dispute as November 1, 2021 to August 31, 2022.
6The Tribunal has ordered that the time period in dispute shall be November 1, 2021 to August 31, 2022. The date used in paragraph 1 of the applicant’s submission does not vary that order.
7For the purposes of this hearing, the time period in dispute will remain as ordered.
ANALYSIS
The quantum of the applicant’s IRB entitlement is $0.00
8To receive payment for an IRB under s. 5(1) of the Schedule, the applicant must be employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffer a substantial inability to perform the essential tasks of that employment. The applicant must identify the essential tasks of their employment, which tasks they are unable to perform and to what extent they are unable to perform them. The applicant bears the burden of proving, on a balance of probabilities, that they meet the test.
9It is agreed that the applicant meets the medical test for an IRB. The dispute focuses on the quantum of the applicant’s entitlement.
Non-taxable benefits are not excluded from IRB calculations
10I find that non-taxable employer paid benefits are not excluded from the IRB calculations.
11At the time of the accident, the applicant was employed by the Province of Ontario. In exchange for her service to the province, the applicant received consideration in the form of a salary, an employer paid life insurance policy, extended healthcare benefits, vision and dental benefits, short term and long-term disability insurance benefits and pension contributions.
12Accountant reports commissioned by each party have been submitted as evidence before the Tribunal. It is agreed that the deviation in these reports is based on the inclusion of non-taxable employer paid benefits in the respondent’s calculation of gross employment income and other income replacement assistance.
13It is agreed by the accountants retained by each party that taxable employer paid benefits are to be included in the definition of gross employment income and other income replacement assistance.
14The applicant submits that the applicant’s non-taxable, employer-paid benefits are not to be included in gross employment income, or income replacement assistance.
15I disagree with this position.
16The respondent submits that both the Income Tax Act and the Schedule are silent as to whether an employer paid benefit is included in the definition of gross employment income or other income replacement assistance based on its tax status. The respondent further submits that the applicant has included in their calculation of gross employment income the employer’s payment of a life insurance premium on behalf of the applicant.
17Section 7 of the Schedule defines the amount available to the applicant for an IRB as a function of “gross employment income” and “other income replacement assistance”.
18“Gross employment income” is defined in s. 4 of the Schedule as:
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.
19As per s.4 of the Schedule “other income replacement assistance” means:
In respect of an insured person who sustains an impairment as a result of an accident,
(a) 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),
(ii) a payment under a sick leave plan that is available to the person but is not being received, and
(iii) a payment under a workers’ compensation law or plan that is not being received by the person because the person has elected under the workers’ compensation law or plan to bring an action and is not entitled to the payment, and
(b) the amount of any gross weekly payment for loss of income, other than a benefit or payment described in subclauses (a) (i) to (iii) that may be available to the person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan but is not being received by the person and for which the person has not made an application. (“autre assistance au titre du remplacement du revenu”) O. Reg. 34/10, s. 4 (1).
20I agree with the respondent. The Schedule does not differentiate between non-taxable and taxable income or assistance. I also agree that the Income Tax Act does not address Statutory Accident Benefits.
21In her submissions, the applicant uses a definition of income from the Income Tax Act. I disagree with the applicability of the Income Tax Act in this situation. The Schedule defines gross employment income and income replacement assistance. A definition of income from another piece of legislation is not helpful or relevant to this dispute.
22In the context of an employed individual, the Schedule only references the Income Tax Act when defining a retirement allowance. Such an allowance is not present in this dispute.
23The applicant has submitted an accountant’s report completed by ADS Forensics as support for their position that the applicant is entitled to an IRB in the amount of $48.24 per week.
24The applicant has also submitted an accountant’s report completed by the respondent’s expert, PWC, as the basis for the respondent’s calculation for an IRB of $0.00.
25As mentioned above, the difference in these reports pertain to the inclusion of non-taxable employer paid benefits in the respondent’s report.
26The applicant does not advance the argument that employer paid benefits should be excluded entirely from the calculation of the IRB. In fact, the applicant, in their accountant’s report, includes the amount that the employer paid for the applicant’s life insurance premium. The applicant has submitted that this benefit was included as it was taxable.
27To support their position that non-taxable employer-paid benefits should be excluded, the applicant directs the Tribunal to the Financial Services Commissions of Ontario case Christina Pellegrino v. Security National Insurance Co., 2017 ONFSCDRS 85 (“Pellegrino”). In this decision, FSCO found that employer side CPP contributions are not to be included in IRB calculations.
28I find that Pellegrino is distinguished from the matter before the Tribunal in this case. In Pellegrino, the arbitrator does not address excluding or including items in the IRB calculations on the basis of their taxation status.
29The applicant further submits the Tribunal case N.Z. v Economical Insurance, 2020 CanLII 63563 (ON LAT) (“N.Z.”). I find that N.Z. is also not relevant to the matter at hand. N.Z. addresses taxation status in the context of an IRB for self-employment. I note that the Schedule uses a different definition for an IRB based on self-employment income and that definition addresses taxable income reported to the Canada Revenue Agency.
30The respondent submits that the FSCO decision in Pafco Insurance Company v. Howden, 2001 ONFSCDRS 93 (“Howden”) should guide the reasoning of the Tribunal, as it supports the inclusion of employer paid benefits.
31The applicant notes that Howden should not be relied on as it references a dispute under the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996. I agree with the applicant that this version of the Schedule is of no benefit to the dispute. The definitions and calculations pertaining to the Income Replacement Benefit in Howden are materially different to those defined in the current Schedule.
32In her reply, the applicant cites Coca Cola Ltd. v. Ontario (CEO of FSRA), 2022 ONFST 9 (“Coca Cola”) to support that employer paid benefits are excluded from the definition of income in the context of an employer sponsored defined benefit pension plan.
33I find that this application is distinguishable from Coca Cola as the definition of income as it pertains to a private pension plan is not applicable to this dispute.
34I also note that this is a new argument presented by the applicant in the reply. The applicant argues in her initial submissions that only non-taxable employer paid benefits should be excluded from the IRB calculations.
35In fact, the applicant’s accountant has included selected employer paid benefits in their IRB calculations. On this basis I find that the applicant does not dispute employer paid benefits being used in the IRB calculations.
36The applicant has not provided any binding authority which supports their position that non-taxable employer paid benefits should be excluded from IRB calculations.
37For the reasons above, I find that the applicant has not proven, on the balance of probabilities that non-taxable, employer paid benefits, should be excluded from the definition of employment of gross employment income and other income replacement assistance. Therefore, I prefer the accountant’s report commissioned by the respondent and find that the quantum of the applicant’s IRB entitlement is $0.00.
Interest
38As no benefits are owing, there is no entitlement to interest.
ORDER
39For the reasons above I find that:
i. The quantum of the applicant’s income replacement benefit is $0.00;
ii. The applicant is not entitled to interest; and
iii. This application is dismissed.
Released: April 7, 2025
Julian DiBattista
Vice-Chair