On reconsideration by the LAT in Foster v Aviva, Vice Chair Jesse A. Boyce overturned a previous decision by the Tribunal to find that the Canada Emergency Response Benefit (CERB) is not akin to Employment Insurance (EI) and therefore not deductible from Income Replacement Benefits (IRBs). The applicant sought reconsideration solely based on the Adjudicator’s findings at paragraphs 48-55 of the previous decision, in which the Adjudicator had deducted the applicant’s CERB from his IRB entitlement under the Statutory Accident Benefits Schedule (the “Schedule”).
In the previous decision dated September 15th 2021, Adjudicator Nathan Ferguson had found CERB to be “essentially akin” to EI benefits in the context of the Schedule, and tantamount to other remuneration from employment. The Adjudicator interpreted the Schedule to find that CERB should be treated in the same manner as EI or “other remuneration of employment” pursuant to the definition of “gross employment income” in subsection 4(1) of the Schedule. “Gross employment income” is defined in 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;
Subsection 7(3)(a) of the Schedule allows insurers to deduct “gross employment income,” including EI benefits, from an IRB. As a result of finding that CERB was akin to EI and “other remuneration from employment,” in the context of the Schedule, Adjudicator Ferguson concluded that CERB could similarly be deducted from IRBs.
Reconsideration decision, dated November 17, 2021
Vice Chair Boyce found that the Tribunal made an error of law, and granted the applicant’s request for reconsideration under Rule 18.2(b) of the Tribunal’s Common Rules of Practice and Procedure. He commented on the particularly rare position to be in during this reconsideration, as even the insurer had agreed with the Applicant that the Tribunal made an error of law in determining that CERB is deductible from IRBs under the Schedule.
The Vice Chair found that Adjudicator Ferguson in the previous decision incorrectly focused on the definition of “gross employment income” to conclude that CERB is deductible from IRBs as “other remuneration from employment” pursuant to subsection 7(3)(a). While the calculation of IRBs under the Schedule is directly connected to an insured’s pre-accident earnings, CERB in contrast is not calculated with reference to employment income pre-pandemic. Everyone who was eligible for CERB received the same amount without reference to their income. As CERB eligibility is not tied to employment status, it cannot be considered “gross employment income” pursuant to subsection 4(1), and is therefore not deductible pursuant to subsection 7(3)(a).
An IRB report provided by the applicant further assisted Vice Chair Boyce in distinguishing why CERB is not considered salary, wages, or “remuneration from other employment” pursuant to the definition in subsection 4(1). Mainly, that a claimant did not need to be employed prior to receiving CERB, and that CERB payments were made as part of an ad hoc government relief program and paid by the Canada Revenue Agency, not by an employer. In direct contrast to Adjudicator Ferguson’s finding that CERB is “essentially akin” to EI, Vice Chair Boyce applied tenets of statutory interpretation to find the opposite. CERB benefits are paid under the Canada Emergency Response Benefit Act. EI benefits, are paid under the Employment Insurance Act. Being employed is not a prerequisite to receiving CERB and the applicant did not receive CERB as a result of being employed after the accident. It was found to be an error of law to categorize CERB as being akin to EI, where the drafters of the legislation did not provide any flexibility in expanding the definition of gross employment income. As such, CERB could not be deducted from IRB under subsection 7(3) of the Schedule.
As LAT decisions have no precedential value, it is unclear what future LAT decisions will hold when it comes to the treatment of CERB as “gross employment income.” However, this reconsideration decision provides one opinion that CERB is not akin to EI, and cannot be deducted from IRB entitlements. We will have to wait and see if this is addressed again by the LAT or eventually, the Divisional Court.
Laila Khalil is the author of this blog and articling student at the firm. If you have a question about this decision, or a similar issue on a file, please contact Laila at 416-777-2811 x 5298.