Charbonneau v. Canada (Attorney General)

Charbonneau v. Canada (Attorney General) Court (s) Database Federal Court of Appeal Decisions Date 2004-02-10 Neutral citation 2004 FCA 61 File numbers A-699-02 Notes Digest Decision Content Date: 20040210 Docket: A-699-02 Citation: 2004 FCA 61 CORAM: DÉCARY J.A. NOËLJ.A. NADON J.A. BETWEEN: YVES CHARBONNEAU Applicant and THE ATTORNEY GENERAL OF CANADA Respondent Hearing held at Montréal, Quebec, on February 5, 2004. Judgment delivered at Ottawa, Ontario, on February 10, 2004. REASONS FOR JUDGMENT: DÉCARY J.A. CONCURRED IN BY: NOËL J.A. NADON J.A. Date: 20040210 Docket: A-699-02 Citation: 2004 FCA 61 CORAM: DÉCARY J.A. NOËL J.A. NADON J.A. BETWEEN: YVES CHARBONNEAU, Applicant and THE ATTORNEY GENERAL OF CANADA, Respondent REASONS FOR JUDGMENT DÉCARYJ.A. [1] This is an application for judicial review of a decision by the Umpire (CUB 53297A) to set aside the decision of a Board of Referees and to restore the decision of the Employment Insurance Commission that the applicant was not unemployed during the period at issue and had knowingly made false statements. Unemployment status [2] A claimant who operates a business is not considered to be unemployed if he operates his business "to such a minor extent that a person would not normally rely on that . . . engagement as a principal means of livelihood" (subsection 30(2) of the Employment Insurance Regulations SOR/96-332). [3] This "minor extent" ("mesure si limitée", in the French text) is determined in light of the circumstances described in subsection 30(3) of the Regulations: Self-employed Person Working a Full Working Week 30. (3) The circumstances to be considered in determining whether the claimant's employment or engagement in the operation of a business is of the minor extent described in subsection (2) are (a) the time spent; (b) the nature and amount of the capital and resources invested; (c) the financial success or failure of the employment or business; (d) the continuity of the employment or business; (e) the nature of the employment or business; and (f) the claimant's intention and willingness to seek and immediately accept alternate employment. Semaine entière de travail -- travailleur indépendant 30. (3) Les circonstances qui permettent de déterminer si le prestataire exerce un emploi ou exploite une entreprise dans la mesure décrite au paragraphe (2) sont les suivantes : a) le temps qu'il y consacre; b) la nature et le montant du capital et des autres ressources investis; c) la réussite ou l'échec financiers de l'emploi ou de l'entreprise; d) le maintien de l'emploi ou de l'entreprise; e) la nature de l'emploi ou de l'entreprise; f) l'intention et la volonté du prestataire de chercher et d'accepter sans tarder un autre emploi. [4] As section 43 of the former Unemployment Insurance Regulations did not define the circumstances to be taken into consideration, the courts, over the years, drew up their own list of criteria (see Re Schwenk (CUB 5454) and A.G. Canada v. Jouan (1995), 179 N.R. 127 (F.C.A.)). It was this list that was used to codify, in 1996, subsection 30(3) of the Employment Insurance Regulations. [5] This Court's decision in Jouan was a crucial turning point, in that Marceau J.A. established the factor of "the time spent"as the "most important" factor: It has generally been assumed in the case law of the umpires, since the decision in Re: Schwenk (CUB 5454), that the proper test to verify, in a particular case, if the "employment is so minor in extent that a person would not normally follow it as a principal means of livelihood" implied the consideration of various factors, namely: the time spent, the capital and resources invested, the financial success or failure of the enterprise, the continuity of the business, the nature of the employment, the willingness of the claimant to accept other employment. And this Court, in two recent decisions,Magee v. Canada (1993), 162 N.R. 236, and Veillet v. C.E.I.C. (1994), A-58-94, has expressed some approval of it. It is true that the words used by Parliament to determine the scope of the exemption are not altogether clear. Not only is the expression "so minor in extent" ambiguous, but the notion of a person's "normal means of livelihood" can hardly be one of clear and simple application. It is true also that behind the exception must have been an effort to avoid condoning pure idleness and penalizing the unemployed person who simply seeks to occupy usefully some of his spare time. A proper application of the provision may indeed require the analysis of various factors. It is my conviction, however, that the most important, most relevant and only basic factor to be taken into account has to be, in all cases, the time spent. First, this is what the French version says unequivocally, the ambiguous English phrase "so minor in extent" having to be read within the confines of the unambiguous French words "il y consacre si peu de temps" (see on this point Côté, P.A., The Interpretation of Legislation in Canada, 1991 at p. 273). Second, this is what common sense requires. Whatever be the status of the other factors (be it the capital invested, or the success of the enterprise or the continuity of the business), they can never be relevant on their own, the conclusion in a particular case depends directly and necessarily on the "time spent", since, is it necessary to repeat it, we are dealing here strictly with the notion of "full working week". In the case of a claimant who spends, on a regular basis, 50 hours per week to the affairs of his own business, there is no way that he can invoke the exception of subsection 43(2). This claimant must necessarily be considered as falling under the general presumption of subsection 43(1) and be regarded as working a full working week. The respondent's efforts to create new employment for himself by starting his own business are, of course, highly commendable. Unfortunately, however, they have taken him outside the purview of the unemployment insurance scheme. The Act is designed to provide temporary benefits to those who are unemployed and actively seeking other work. It cannot be used to subsidize entrepreneurs who are starting their own businesses. The policy behind this scheme may be questionable, nevertheless it remains the law and it must be enforced according to how it is written. [6] Since part of Marceau J.A's reasoning was based on the fact that the French text of subsection 43(2) of the Unemployment Insurance Regulations, "il y consacre si peu de temps", was clear and helped remove the ambiguity arising from the English text "so minor in extent", and since the text of subsection 30(2) of the Employment Insurance Regulations had substituted for the French words "il y consacre si peu de temps", the words "dans une mesure si limitée", some people perceived the new wording as a disavowal of the decision in Jouan. [7] With respect, it is my opinion that this is not the case. The English text, with the meaning that Marceau J.A. gave to it by drawing on the French text, had lost its ambiguity, and it is this very text that is used in the 1996 version. I do not think that the ambiguity is revived simply because the new French text uses "mesure" rather than "temps". It would have been incongruous, in a new text in which the "time/temps" factor was now mentioned in subsection 30(3) as a factor used to determine whether the exception in subsection 30(2) applied, to retain the word "temps" in the formulation of the exception. It is hard to see how time could be used to determine time. The new text, read in light of Jouan, which was the leading case when the text was adopted, harmonizes the French and English versions very elegantly and logically. [8] Whatever the case may be and more fundamentally, it appears to me that the foremost reason which led Marceau J.A. adopt "time" as the paramount factor is that this factor was "most relevant", the "only basic factor to be taken into account" in all cases. The only thing that interests us, he says, is the notion of working a full week and "the conclusion . . . depends directly and necessarily on the 'time spent'". This primary reason still exists. Nothing has changed in that respect. [9] Allow me to add, however, that not very far behind the "time" factor, in terms of importance, is the factor of "the claimant's intention and willingness to seek and immediately accept alternate employment". As Marceau J.A. pointed out in Jouan, "The Act is designed to provide temporary benefits to those who are unemployed and actively seeking other work" (emphasis added). A claimant will not be considered unemployed if, all the while he is receiving payments, he merely says he is available to work and does not undertake serious, real steps to find work for himself. [10] In conclusion, if it is true to say that all the factors listed in subsection 30(3) of the Employment Insurance Regulations must be taken into consideration, the fact is that the "time" factor" (paragraph (a)) and the "intention and willingness" factor (paragraph (f)) are of utmost importance. A claimant who does not have the time to work or who is not actively seeking work should not benefit from the Employment Insurance system. [11] In this case, the Board of Referees made palpable and overriding errors, in particular, in concluding that devoting some forty hours per week to his business for nine months and not seeking any employment during this period was not sufficient to disentitle the claimant. Accordingly, the Umpire was justified to intervene and to form his own opinion regarding the entire period at issue, and he was entitled, in light of the record, to determine that, even after this initial nine-month period, the claimant was still not entitled to benefits. The penalties and the notice of violation [12] The Board of Referees rescinded the penalties and the notice of violation on the grounds, if I understand correctly, that the claimant had made his false statements based on an explanation that had been given to him by an employee of the Commission. [13] The Umpire, setting aside the Board of Referee's decision on this point, merely stated that the claimant had failed to meet his burden of proof. It is apparent from the reasons of the Umpire that he seems to believe that once a statement is false, it was made knowingly. That was, certainly, a significant error. He ought to have determined whether the Board of Referees had erred in relying on the explanation obtained from the official when it determined that the false statement was not made knowingly. [14] The respondent recognizes the truthfulness of the claimant's allegation but does not think that, under the circumstances, it can justify the fact that the answer "no" was given to the question "did you work?". [15] Although the solution is not self-evident, I think that the Umpire did not justify his intervention and that there was enough evidence in the file to enable the Board of Referees to find that the false statements had not been made knowingly. [16] As for the other conclusions sought by the applicant, the Court simply cannot address them with the record as it stands. [17] I would allow the application for judicial review, in part, with costs, set aside that part of the Umpire's decision restoring the validity of the penalties and of the notice of violation and refer the matter to the Chief Umpire or to an Umpire designated by him for redetermination on the basis that the claimant was not eligible, but that the penalties and the notice of violation were unfounded. "Robert Décary" Judge "I concur. Marc Noël, J.A." "I concur. Marc Nadon, J.A." Certified true translation Kelley A. Harvey, BA, BCL, LLB FEDERAL COURT OF APPEAL SOLICITORS OF RECORD DOCKET: A-699-02 STYLE OF CAUSE: YVES CHARBONNEAU v. AGC PLACE OF HEARING: Montréal, Quebec DATE OF HEARING: February 5, 2004 REASONS FOR JUDGMENT: Décary J.A. CONCURRED IN BY: Noël J.A. Nadon J.A. DATE OF REASONS: February 10, 2004 APPEARANCES: JEAN-GUY OUELLET FOR THE APPLICANT PAULINE LEROUX FOR THE RESPONDENT SOLICITORS OF RECORD: JEAN-GUY OUELLET FOR THE APPLICANT PAULINE LEROUX FOR THE RESPONDENT PASCALE-CATHERINE GUAY