CERB and CRB: Are they Deductible from an Income Loss Award?

October 03, 2024

Overview:

In Ferreira v. Hopper,[1] the Ontario Superior Court considered for the first time whether the Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB) can be deducted from an income loss award in the context of a motor vehicle accident.

Background Facts:

The plaintiff was injured in a motor vehicle accident on October 24, 2017, resulting in soft tissue injuries. A jury concluded that the plaintiff was entitled to $100,000 for past income loss.

The parties brought a motion for direction on whether the plaintiff’s CERB and CRB are deductible from the past loss of income award.

Both CERB and CRB provided financial support to employed and self-employed people who were directly affected by COVID-19. CRB replaced CERB and had stricter guidelines to qualify.

Legislation on Deductions for Income Loss Awards in Motor Vehicle Accidents:

Pursuant to section 267.8(1) of the Insurance Act,

Collateral benefits
Income loss and loss of earning capacity
267.8(1) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the damages to which a plaintiff is entitled for income loss and loss of earning capacity shall be reduced by the following amounts:
[…]
2. All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for income loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan.[2]

In order to establish that CERB and CRB are deductible, it must be shown that the payments are (1) “in respect of the incident” and (2) “for income loss or loss of earning capacity.”

Application of Law:

The parties conceded that CERB and CRB are “for income loss or loss of earning capacity” but disagree as to whether the payments are “in respect of the incident.”

In Ontario, there have not been any other cases on point. The Court considered a case related to a constructive dismissal,[3] and found it to be not helpful to this matter. The Court also considered a case at the License Appeal Tribunal under the Statutory Accident Benefits Schedule: Foster v. Aviva Gen Ins. Co.[4], but found that it was not applicable because it interpreted provisions of the Schedule, rather than the Insurance Act.

In Grajqevic v. Rustaie,[5] the Court concluded that payments through Ontario Works (OW) and the Ontario Disability Support Program (ODSP) are not deductible under section 267.8(1)2 of the Insurance Act because they were not made “in respect of the incident.” This case is distinguishable because the plaintiff in that case received those benefits for a disease unrelated to the motor vehicle accident.

In order to qualify for CERB or CRB, a person must have lost income due to COVID-19, not any other reason, such as a disability. During the trial, the plaintiff maintained that the only reason he was unable to work was the subject motor vehicle accident, not COVID-19. As such, Justice ten Cate concluded that the CERB and CRB received are deductible from the $100,000 income award.

Takeaways:

This is the first Ontario case to determine whether CERB and CRB are deductible from an income loss claim in the context of a motor vehicle accident. The Court makes it clear that if the plaintiff’s income loss was due to the subject motor vehicle accident and unrelated to COVID-19 (i.e. they should not have qualified for these benefits), CERB and CRB are deductible. However, the door is left open as to whether CERB and CRB would be deductible if the plaintiff’s income loss is partially related to COVID-19.

[1] Ferreira v. Hopper, 2024 ONSC 5385.

[2] Insurance Act, R.S.O. 1990, c. I.8, s. 267.8(1).

[3] Fogelman v. IFG, 2021 ONSC 4042.

[4] Foster v. Aviva Gen Ins. Co., 2021 ONLAT 19-014657.

[5] Grajqevci v. Rustaie, 2017 ONSC 2535.