Justice Woods recognized that her decision was harsh, but she felt there was nothing she could do. The law was clear, she thought. (See para. 8.) But was the law so clear?
EIA s. 144 defines “income” of a person for the purposes of the Benefit Repayment rules to mean "the amount that would be their income for the period determined under the Income Tax Act", (subject to limited exceptions that don't apply to Mr. Henson's workers' compensation benefits).
The Income Tax Act distinguishes "taxable income" from "income". There are special adjustments you may make to your "income" for purposes of calculating your "taxable income". Under s. 110(1)(f) of the Income Tax Act, in calculating your "taxable income", you may deduct your workers' compensation benefits. So, Justice Woods was on good ground for saying that Mr. Henson's "income" for tax purposes included his WC benefit, even if his "taxable income" did not.
Did she have to take this view? She might have said that "income" for purposes of this EIA rule should be read more broadly, to mean "taxable income". The EIA never refers to "taxable income"; so "income" might be read broadly without suggesting a contradiction elsewhere. But given the distinction in the ITA and the specific exclusions in the EIA definition, which only refer to rules that might apply to defining "income" not "taxable income", her narrower reading was probably right. Still, it would have been good to hear her view on that alternative argument.
See Henson v. The Queen, (2014 TCC Woods)