The Superior Court of Justice recently weighed in on whether payments for the Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB) should be deducted from an income loss awarded in a personal injury court action. CERB/CRB payments were provided to Canadians whose capacity to earn income was affected by the COVID-19 pandemic.

Ferreira Case

In the Ferreira case, the plaintiff Jason Ferreira was injured in a motor vehicle accident on October 24, 2017. The jury awarded Ferreira $129,000, including $100,000 for past loss of income. After the accident and before the trial, Ferreira received CERB and CRB payments for a total of $38,600 during the years 2020 and 2021.  

The Insurance Act stipulates that certain benefits can be deducted from tort awards to avoid over-compensation. Section 267.8(1) of the Insurance Act outlines the deductions applicable to awards for income loss and earning capacity. The question before the court was whether CERB/CRB payments provided to Ferreira should be deducted from his damages for past income loss.

CERB/CRB Payments

The CERB and CRB were intended to replace income lost due to the pandemic, not due to a specific injury. The plaintiff argued that these benefits were not “in respect of an incident” as required by the Insurance Act and therefore should not be deducted. However, the defendant contended that these payments were “for income loss or loss of earning capacity” and should be deducted.

Decision

The court determined that CERB and CRB payments were deductible under the Insurance Act. 

To qualify for these benefits, the court concluded that Ferreira had to demonstrate that his income loss was due to COVID-19, not his injuries from the accident. However, Ferreira testified during the trial that his absence from work was solely due to the accident, a position he maintained to secure the $100,000 past income loss award. Since CERB and CRB are benefits related to income loss, the court concluded that they should be deducted from the damages awarded by the jury for the income loss. 

Conclusion

This case highlights the complexities of balancing public benefits like CERB and CRB with traditional tort law principles. It underscores the challenge of ensuring plaintiffs are compensated fairly.

There appears to be two issues with the decision.

First, public benefits, such as Employment Insurance benefits, must typically be repaid if the plaintiff receives a past loss of income award. The Ferreira decision does not address the plaintiff’s potential obligation to repay the CERB/CRB benefits. If the CERB/CRB payments are deducted and then must be repaid, the plaintiff will obviously be penalized.

Second, if the plaintiff would not have worked during the period where CERB/CRB benefits were received regardless of whether he was injured, the adjustment should be made in the income loss calculation, and not after the trial. 

If you have been injured in a motor vehicle accident, contact one of our lawyers today by text at 613-777-0992, by telephone at 613-233-6898 or by email at info@burntucker.com. In most cases, we offer a contingency fee agreement so that you will not have to pay anything unless and until your case either settles or you win at trial. 

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