No ambiguity in legislative wording of Statutory Accident Benefits Schedule, court says
In a recent case, the Ontario Divisional Court ruled that employment insurance (EI) sickness benefits received by a woman after a motor vehicle accident are deductible as gross employment income from the total income replacement benefit (IRB) she additionally received from her insurer.
In Aviva Insurance Company of Canada v. Spence, 2022 ONSC 4988, the respondent got involved in a motor vehicle accident in March 2019. At the time of the accident, she was employed full-time as a registered nurse. As a result of injuries sustained, she applied for accident benefits from the appellant insurer under the Statutory Accident Benefits Schedule (SABS). Based on her gross annual income, she was entitled to receive IRB of $400 per week from June 2019 to October 2019.
During the entitlement period, the respondent also received sickness benefits of $562 per week under the Employment Insurance Act.
The appellant argued that the respondent’s EI sickness benefits fell under the definition of “gross employment income” and, therefore, should be deducted from her IRB at 70 percent under s. 7(3)(a) of the SABS. As a result, it reduced her IRB to $6.60 per week.
However, the respondent claimed that her EI sickness benefits were specifically excluded under ss. 4(1) and 47(3) of the SABS and, thus, not deductible from her IRB. She then applied to the Licence Appeal Tribunal to resolve the dispute.
The adjudicator found an “ambiguity” in the SABS due to the inconsistent treatment of EI benefits under ss. 4(1), 7(3)(a), and 47(3). Based on this conflict, he was required to look beyond the plain meaning of the words in ss. 4(1) and 7(3)(a).
Ultimately, he resolved the perceived ambiguity in favour of the respondent because SABS is a consumer-protection law. He held that the appellant had improperly deducted the respondent’s EI sickness benefits from her IRB. The appellant appealed the adjudicator’s decision to the Divisional Court.
The Divisional Court found that EI sickness benefits received after an accident must be included in gross employment income and therefore deducted from IRB otherwise payable at the rate of 70 percent under the SABS.
“The first error was in finding ambiguity in the [SABS] as it relates to the treatment of EI benefits. As [the appellant] correctly submits, there is no such ambiguity,” Justice M. Gregory Ellies wrote.
The court noted that along with the references in ss. 4(1), 7(1), and 47(3), EI benefits are also referred to in s. 5(1). Under s. 5(1), any insured person unemployed at the time of the accident − but was receiving EI benefits at the time − is entitled to receive IRB if they sustain an impairment due to the accident.
“Taken together, these four sections operate to treat all EI benefits as income, regardless of whether they were being received before the accident, and to treat all EI benefits similarly, regardless of the reason for which the benefits are being paid,” Justice Ellies wrote.
The court also found no conflict between how EI benefits are deducted as gross employment income from IRB under s. 7(3)(a) and how EI benefits are excluded from the definitions of “other income replacement assistance” under s. 4(1) and “temporary disability benefits” under s. 47(3).
“Excluding EI benefits from these definitions ensures that EI benefits which might otherwise meet the definitions are not deducted twice: once as gross employment income and again as either other income replacement assistance or as a temporary disability benefit. This ensures consistency of treatment, not the opposite,” Justice Ellies wrote.
According to the court, there are other signs of the legislature’s intention to treat all EI benefits as gross employment income in the SABS. One of them is the express use of the word “any” in the definition of gross employment income as including “any benefits received under the Employment Insurance Act.”
Another is the implicit use of that word in s. 5(1), which entitles an insured to an IRB even while unemployed, provided the insured “was receiving [any] benefits under the Employment Insurance Act (Canada) at the time of the accident,” the court added.