Wilson,
J.:
—This
appeal
raises
the
question
of
the
constitutional
validity
of
subsection
231(3)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148,
in
light
of
section
8
of
the
Canadian
Charter
of
Rights
and
Freedoms.
1.
The
Facts
The
appellants,
McKinlay
Transport
Limited
and
C.T.
Transport
Inc.,
are
both
incorporated
under
the
laws
of
the
Province
of
Ontario
and
carry
on
the
business
of
freight
transport
of
general
commodities.
Central
Cartage
Company
is
a
parent
company
of
McKinlay
and
a
sister
company
of
C.T.
Transport.
All
these
corporations
are
subsidiaries
of
Centra
Inc.
Although
both
appellants
have
nominal
head
offices
in
Ontario,
the
de
facto
head
office
of
each
corporation
is
in
Sterling
Heights,
Michigan.
All
books
and
records
of
the
appellants
are
kept
there.
In
1982
Revenue
Canada
commenced
an
income
tax
audit
of
both
appellants
in
respect
of
their
1979-80
tax
year.
In
October,
1983
Revenue
Canada,
pursuant
to
subsection
231(3)
of
the
Act,
served
the
appellants
with
letters
demanding
the
production
of
a
wide
array
of
information
and
documents.
The
appellants
did
not
comply
with
these
demands
and
an
information
was
issued
on
August
9,
1984
alleging
that
the
appellants
had
breached
subsection
238(2)
of
the
Income
Tax
Act
because
of
their
failure
to
comply
with
the
demands
made
pursuant
to
subsection
231(3).
The
appellants
brought
an
application
before
Langdon,
Prov.
C.J.
asking
that
the
information
be
quashed
because
subsection
231(3)
coupled
with
subsection
238(2)
were
in
violation
of
the
Charter.
Langdon,
Prov.
C.J.
found
that
subsection
231(3)
violated
section
8
of
the
Charter
and
quashed
the
information:
(1986)
1
C.T.C.
29;
85
D.T.C.
5537.
An
appeal
was
taken
by
the
respondent
to
the
Ontario
Supreme
Court
where
Mr.
Justice
Trainor
found
that
the
section
did
not
violate
section
8
of
the
Charter.
He
allowed
the
appeal:
[1988]
1
C.T.C.
421;
87
D.T.C.
5051;
58
O.R.
(2d)
310.
A
further
appeal
by
the
appellants
to
the
Ontario
Court
of
Appeal
was
dismissed:
[1988]
1
C.T.C.
426;
88
D.T.C.
6314;
62
O.R.
(2d)
757.
Leave
to
appeal
to
this
Court
was
granted
on
June
2,
1988,
[1989]
1
S.C.R.
xi;
90
D.T.C.
6243
and
the
following
constitutional
questions
were
set
at
a
later
date:
1.
Is
subsection
231(3)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148,
inconsistent
with
the
provisions
of
section
8
of
the
Canadian
Charter
of
Rights
and
Freedoms?
2.
If
there
is
such
an
inconsistency,
does
section
1
of
the
Canadian
Charter
of
Rights
and
Freedoms
save
subsection
231(3)
from
being
declared
of
no
force
and
effect?
2.
The
Courts
Below
(a)
Ontario
Provincial
Court
Langdon,
Prov.
C.J.,
in
considering
whether
the
compelled
disclosure
of
information
and
documents
pursuant
to
subsection
231(3)
violated
section
8
of
the
Charter,
concluded
that
there
did
not
have
to
be
a
physical
intrusion
by
state
authorities
for
there
to
be
a
search
or
seizure.
He
stated
at
page
38
(D.T.C.
5544):
If
that
analysis
is
correct
(that
there
must
be
a
physical
intrusion
for
there
to
be
a
search
or
seizure),
then
if
the
State
were
unable
to
obtain
a
search
warrant
under
section
443
of
the
Criminal
Code,
would
it
be
lawful
for
Parliament
in
the
exercise
of
its
criminal
law
jurisdiction
to
authorize
the
Attorney
General
of
Canada,
for
any
purposes
related
to
the
administration
or
enforcement
of
the
Criminal
Code,
by
registered
letter
or
by
a
demand
served
personally,
to
require
from
any
person
that
he
produce
any
document
or
thing.
Parliament
could
couple
the
failure
or
refusal
of
the
subject
with
a
penalty
of
ten
years'
imprisonment.
If
the
approach
to
the
Charter
of
Rights
is
a
purposive
one,
it
seems
to
me
that
the
guarantee
against
unreasonable
search
and
seizure
would
then
be
made
meaningless
by
such
a
provision.
The
effect
of
the
hypothetical
provision
would
perhaps
be
more
draconian
than
a
power
of
unlimited
search.
In
any
event,
it
would
seem
that
any
subject
having
a
defence
to
a
charge
of
failing
to
answer
a
requirement
would
virtually
have
to
permit
the
search
to
exculpate
himself
if
charged
with
failing
to
answer
the
requirement.
Therefore,
followed
to
its
logical
conclusion,
the
unrestricted
right
to
demand
coupled
with
a
penalty
for
failure
to
comply
is
very
akin
to
seizure.
In
appropriate
circumstances,
the
distinction
between
them
would
indeed
be
a
distinction
without
a
difference.
Langdon,
Prov.
C.J.,
relying
on
this
Court's
decision
in
Hunter
v.
Southam
Inc.,
[1984]
2
S.C.R.
145;
84
D.T.C.
6467,
and
R.
v.
Therens,
[1985]
1
S.C.R.
613;
18
D.L.R.
(4th)
655,
also
rejected
the
argument
that
it
was
open
to
the
individual
who
received
the
demand
to
refuse
to
comply
and
determine
his
liabilities
at
a
later
time.
He
stated
at
page
43
(D.T.C.
5547):
I
agree
with
Le
Dain,
J.
that
it
is
unrealistic
to
speak
of
the
recipient
of
a
letter
of
requirement
as
being
free
to
refuse
to
comply.
If
he
is
not
free
to
refuse
to
comply
he
is
subject
to
compulsion.
Thus
the
service
of
the
requirement
is
tantamount
to
a
seizure.
Having
found
that
subsection
231(3)
authorized
a
seizure
within
the
meaning
of
section
8
of
the
Charter,
Langdon,
Prov.
C.J.
had
no
difficulty
in
conclud-
ing
that
the
form
of
seizure
authorized
was
unreasonable.
He
found
that
it
met
none
of
the
criteria
espoused
by
Dickson,
J.
in
Hunter.
In
particular:
(1)
The
legislation
did
not
provide
for
a
method
of
prior
authorization;
(2)
The
Minister
when
acting
under
subsection
231(3)
could
not
be
a
neutral
or
impartial
arbiter
acting
judicially;
(3)
The
legislation
provided
for
no
form
of
review
of
the
Minister’s
discretion;
and
(4)
The
legislation
did
not
require
the
establishment
of
reasonable
and
probable
grounds
under
oath
that
an
offence
had
been
committed
or
that
there
was
evidence
to
be
found
at
the
place
of
the
search.
For
these
reasons
Langdon,
Prov.
C.J.
quashed
the
information.
(b)
Ontario
High
Court
Mr.
Justice
Trainor
had
the
advantage
of
the
Ontario
Court
of
Appeal's
decision
in
Thomson
Newspapers
Ltd.
v.
Director
of
Investigation
and
Research
(1986),
17
O.A.C.
330;
57
O.R.
(2d)
257
in
preparing
his
reasons
and
he
relied
upon
it
heavily.
Of
importance
to
the
Court
of
Appeal
in
Thomson
was
the
fact
that
an
individual
compelled
to
produce
documents
pursuant
to
subsection
17(1)
of
the
Combines
Investigation
Act
could,
in
the
Court's
opinion,
effectively
challenge
the
order
of
the
Restrictive
Trade
Practices
Commission
prior
to
producing
the
documents.
The
Court
of
Appeal
for
this
reason
felt
that
subsection
17(1)
did
not
authorize
a
seizure
within
the
meaning
of
section
8
of
the
Charter.
Trainor,
J.
applied
similar
reasoning
to
the
appeal
before
him.
Relying
on
this
Court's
decision
in
James
Richardson
&
Sons,
Ltd.
v.
M.N.R.,
[1984]
1
S.C.R.
614;
[1984]
C.T.C.
345;
84
D.T.C.
6325,
he
found
that
subsection
231(3)
had
been
given
a
restrictive
interpretation
by
the
Court
and
this
allowed
a
person
served
with
an
order
for
production
an
opportunity
to
challenge
its
validity
before
producing
the
material.
He
stated
at
page
426
(D.T.C.
5055;
O.R.
317):
The
recipient
of
a
demand
under
subsection
231(3)
can
successfully
attack
such
demand
before
prosecution
for
failure
to
comply
on
a
number
of
grounds
including
the
following:
(1)
That
a
reasonable
time
for
production
has
not
been
afforded.
Re
Joseph
et
al.
and
Minister
of
National
Revenue,
[1985]
C.T.C.
164;
85
D.T.C.
5391;
51
O.R.
(2d)
658.
(2)
That
the
Minister
is
engaged
in
a
fishing
expedition
and
not
a
genuine
and
serious
inquiry
as
to
some
taxpayer's
liability.
(3)
That
the
documents
demanded
are
not
germane
or
relevant
to
the
issues
between
the
parties.
(4)
That
the
documents
are
privileged.
There
are
no
doubt
many
other
grounds
of
attack
available,
dependent
on
the
circumstances.
For
example,
I
would
think
that
where
a
demand
is
made
and
where
the
issues
between
the
parties
are
not
clearly
identified,
unlike
a
case
where
charges
have
been
laid,
it
would
be
incumbent
on
the
Minister
to
set
out
the
grounds
for
the
demand
in
order
that
relevance
could
readily
be
ascertained,
in
the
first
instance
by
the
recipient
of
the
demand
and
later,
if
necessary,
by
the
court.
These
avenues
of
attack
cannot
be
said
to
be
illusory.
They
create
substantial
defences
and
are
an
answer
to
many
of
the
concerns
raised
during
argument
about
ministerial
excesses
and
oppressive
conduct.
Accordingly,
Trainor,
J.
found
that
subsection
231(3)
did
not
authorize
a
seizure.
He
therefore
allowed
the
appeal.
He
noted
in
obiter,
however,
that
had
he
found
that
a
seizure
was
authorized
by
the
section,
it
would
not
have
been
a
reasonable
one
since
the
criteria
enumerated
in
Hunter
were
not
satisfied.
(c)
The
Ontario
Court
of
Appeal
Mr.
Justice
Grange
delivered
the
opinion
of
the
court
on
behalf
of
himself,
Lacourcière
and
Goodman,
JJ.A.
Like
Trainor,
J.,
Grange,
J.A.
saw
this
case
as
very
similar
to
the
Thomson
case.
In
Grange,
J.A.'s
opinion,
the
fact
that
the
individual
could
challenge
the
requirement
to
produce
was
sufficient
to
dispel
the
notion
that
it
was
a
seizure.
He
stated
at
page
428
(D.T.C.
6315;
O.R.
760):
As
Trainor
J.
pointed
out,
the
subsection
of
the
Income
Tax
Act
is
not
unqualified
or
unlimited.
It
is
subject
to
certiorari
proceedings
wherein
the
requirement
will
be
tested
objectively
to
determine
whether
it
is
authorized
by
the
section
and
whether
it
is
relevant
to
the
tax
liability
of
a
specific
person.
No
“fishing
expedition"
will
be
permitted.
See
Canadian
Bank
of
Commerce
v.
Attorney
General
of
Canada,
[1962]
S.C.R.
729,
[1962]
C.T.C.
35;
62
D.T.C.
1236,
and
James
Richardson
&
Sons,
Ltd.
v.
M.N.R.,
[1984]
1
S.C.R.
614
at
623
et
seq.,;
[1984]
C.T.C.
345;
84
D.T.C.
1264.
In
a
system
where
the
tax
authorities
depend
largely
on
the
good
faith
and
integrity
of
the
taxpayer
to
disclose
information
relevant
to
tax
liability,
it
is
necessary
to
give
wide
investigative
powers
to
those
authorities
without
compelling
them
to
give
statements
under
oath
of
reasonable
and
probable
grounds
for
the
requirement
to
produce,
particularly
where
the
requirement
does
not
constitute
enforced
production.
The
essential
consideration
in
my
view
is
that
the
requirement
to
produce
is
not
so
intrusive
as
a
search
or
seizure,
that
it
in
no
sense
resembles
a
search
and
cannot
be
tantamount
to
a
seizure
because
the
person
subject
to
it
has
a
right
to
take
action
to
circumvent
the
required
production.
Grange,
J.A.
thought
that
in
this
case
it
was
even
clearer
than
in
Thomson
that
the
provision
did
not
constitute
a
seizure
since,
while
the
Combines
Investigation
Act
provided
a
mechanism
to
compel
compliance
with
the
order
to
produce,
the
Income
Tax
Act
provided
only
a
penalty
for
disobedience.
Accordingly,
the
Ontario
Court
of
Appeal
dismissed
the
appeal.
3.
The
Issues
The
issues
arising
in
this
appeal
are
as
follows:
1.
Does
subsection
231(3)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148,
violate
section
8
of
the
Canadian
Charter
of
Rights
and
Freedoms?
2.
If
the
answer
to
question
1
is
affirmative,
can
subsection
231(3)
of
the
Income
Tax
Act
be
sustained
as
a
reasonable
limit
demonstrably
justified
in
a
free
and
democratic
society
under
section
1
of
the
Canadian
Charter
of
Rights
and
Freedoms
or
is
the
provision
of
no
force
and
effect
by
virtue
of
section
52
of
the
Constitution
Act,
1982?
4.
Analysis
A
chief
source
of
revenue
for
the
federal
government
is
the
collection
of
income
tax.
The
legislative
scheme
which
has
been
put
in
place
to
regulate
the
collection
of
tax
is
the
Income
Tax
Act.
The
Act
requires
taxpayers
to
file
annual
returns
and
estimate
their
tax
payable
as
a
result
of
calculations
made
in
these
returns.
Moreover,
the
Act
requires
various
third
parties
such
as
employers,
corporations
and
banks
to
file
information
on
wages,
dividends,
interest
payments
and
the
like:
see
paragraph
221(1)(d)
and
Part
Il
of
the
Income
Tax
Regulations,
C.R.C.
1978,
c.
945.
In
essence,
the
system
is
a
selfreporting
and
self-assessing
one
which
depends
upon
the
honesty
and
integrity
of
the
taxpayers
for
its
success:
see
Search
and
Seizure
Under
the
Income
Tax
Act
(1985),
a
study
paper
prepared
for
the
Law
Reform
Commission
of
Canada
by
Neil
Brooks
and
Judy
Fudge.
Nonetheless,
it
would
be
naïve
to
think
that
no
one
attempts
to
take
advantage
of
the
self-reporting
system
in
order
to
avoid
paying
his
or
her
full
share
of
the
tax
burden
by
violating
the
rules
set
forth
in
the
Act.
Because
of
this
reality
Parliament
enacted
several
provisions,
among
them
subsection
231(3),
giving
the
Minister
of
National
Revenue
power
to
investigate
and
audit
taxpayers.
Section
231
reads
in
part
as
follows:
231.(1)
Any
person
thereunto
authorized
by
the
Minister,
for
any
purpose
related
to
the
administration
or
enforcement
of
this
Act,
may,
at
all
reasonable
times,
enter
into
any
premises
or
place
where
any
business
is
carried
on
or
any
property
is
kept
or
anything
is
done
in
connection
with
any
business
or
any
books
or
records
are
or
should
be
kept,
and
(a)
audit
or
examine
the
books
and
records
and
any
account,
voucher,
letter,
telegram
or
other
document
which
relates
or
may
relate
to
the
information
that
is
or
should
be
in
the
books
or
records
or
the
amount
of
tax
payable
under
this
Act,
(b)
examine
property
described
by
an
inventory
or
any
property,
process
or
matter
an
examination
of
which
may,
in
his
opinion,
assist
him
in
determining
the
accuracy
of
an
inventory
or
in
ascertaining
the
information
that
is
or
should
be
in
the
books
or
records
or
the
amount
of
any
tax
payable
under
this
Act,
(c)
require
the
owner
or
manager
of
the
property
or
business
and
any
other
person
on
the
premises
or
place
to
give
him
all
reasonable
assistance
with
his
audit
or
examination
and
to
answer
all
proper
questions
relating
to
the
audit
or
examination
either
orally
or,
if
he
so
requires,
in
writing,
on
oath
or
by
statutory
declaration
and,
for
that
purpose,
require
the
owner
or
manager
to
attend
at
the
premises
or
place
with
him,
and
(d)
if,
during
the
course
of
an
audit
or
examination,
it
appears
to
him
that
there
has
been
a
violation
of
this
Act
or
a
regulation,
seize
and
take
away
any
of
the
documents,
books,
records,
papers
or
things
that
may
be
required
as
evidence
as
to
the
violation
of
any
provision
of
this
Act
or
a
regulation.
(2)
The
Minister
shall,
(a)
within
120
days
from
the
date
of
seizure
of
any
documents,
books,
records,
papers
or
things
pursuant
to
paragraph
(1)(d),
or
(b)
if
within
that
time
an
application
is
made
under
this
subsection
that
is
after
the
expiration
of
that
time,
rejected,
then
forthwith
upon
the
disposition
of
the
application,
return
the
documents,
books,
records,
papers
or
things
to
the
person
from
whom
they
were
seized
unless
a
judge
of
a
superior
court
or
county
court,
on
application
made
by
or
on
behalf
of
the
Minister,
supported
by
evidence
on
oath
establishing
that
the
Minister
has
reasonable
and
probable
grounds
to
believe
that
there
has
been
a
violation
of
this
Act
or
a
regulation
and
that
the
seized
documents,
books,
records,
papers
or
things
are
or
may
be
required
as
evidence
in
relation
thereto,
orders
that
they
be
retained
by
the
Minister
until
they
are
produced
in
any
court
proceedings,
which
order
the
judge
is
hereby
empowered
to
give
on
ex
parte
application.
(3)
The
Minister
may,
for
any
purposes
related
to
the
administration
or
enforcement
of
this
Act,
by
registered
letter
or
by
a
demand
served
personally,
require
from
any
person
(a)
any
information
or
additional
information,
including
a
return
of
income
or
a
supplementary
return,
or
(b)
production,
or
production
on
oath,
of
any
books,
letters,
accounts,
invoices,
statements
(financial
or
otherwise)
or
other
documents,
within
such
reasonable
time
as
may
be
stipulated
therein.
(4)
Where
the
Minister
has
reasonable
and
probable
grounds
to
believe
that
a
violation
of
this
Act
or
a
regulation
has
been
committed
or
is
likely
to
be
committed,
he
may,
with
the
approval
of
a
judge
of
a
superior
or
county
court,
which
approval
the
judge
is
hereby
empowered
to
give
on
ex
parte
application,
authorize
in
writing
any
officer
of
the
Department
of
National
Revenue,
together
with
such
member
of
the
Royal
Mounted
Police
or
other
peace
officers
as
he
calls
on
to
assist
him
and
such
other
persons
as
may
be
named
therein,
to
enter
and
search,
if
necessary
by
force,
any
building,
receptacle
or
place
for
documents,
books,
records,
papers
or
things
that
may
afford
evidence
as
to
the
violation
of
any
provision
of
this
Act
or
a
regulation
and
to
seize
and
take
away
any
such
documents,
books,
records,
papers
or
things
and
retain
them
until
they
are
produced
in
any
court
proceedings.
(5)
An
application
to
a
judge
under
subsection
(4)
shall
be
supported
by
evidence
on
oath
establishing
the
facts
upon
which
the
application
is
based.
238.(2)
Every
person
who
has
failed
to
comply
with
or
contravened
subsection
116(3),
127(3.1)
or
(3.2),
153(1),
227(5),
230.1(1)
or
230.1(2),
or
section
230
or
231
is
guilty
of
an
offence
and,
in
addition
to
any
penalty
otherwise
provided,
is
liable
on
summary
conviction
to
(a)
a
fine
of
not
less
than
$200
and
not
exceeding
$10,000,
or
(b)
both
the
fine
described
in
paragraph
(a)
and
imprisonment
for
a
term
not
exceeding
6
months.
This
Court
had
occasion
to
consider
subsection
231(3)
of
the
Act
in
James
Richardson
&
Sons,
Ltd.
v.
M.N.R.,
supra.
It
noted
that
the
wording
of
the
subsection
was,
on
its
face,
extremely
broad.
The
Court
found,
however,
after
reviewing
its
earlier
decision
in
Canadian
Bank
of
Commerce
v.
Attorney
General
of
Canada,
[1962]
S.C.R.
729;
62
D.T.C.
1236
that
once
the
appropriate
rules
of
statutory
interpretation
had
been
applied
to
the
subsection,
it
was
not
to
be
construed
so
broadly.
The
Court
found
at
page
350
(D.T.C.
6329;
S.C.R.
623)
that:
(a)
the
test
of
whether
the
Minister
is
acting
for
a
purpose
specified
in
the
Act
is
an
objective
one
and
has
to
be
decided
on
the
proper
interpretation
of
the
subsection
and
its
application
to
the
circumstances
disclosed;
(b)
the
obtaining
of
information
relevant
to
the
tax
liability
of
some
specific
person
or
persons
whose
liability
to
tax
is
under
investigation
is
a
purpose
related
to
the
administration
or
enforcement
of
the
Act;
(c)
it
is
not
necessary
that
the
person
from
whom
the
information
is
sought
be
one
whose
liability
to
tax
is
under
investigation;
(d)
the
fact
that
the
giving
of
the
information
may
disclose
private
transactions
involving
persons
who
are
not
under
investigation
and
may
not
be
liable
to
tax
does
not
invalidatethe
Requirement.
Notwithstanding
that
subsection
231(3)
has
been
narrowed
in
scope
as
a
result
of
the
common
law
rules
relating
to
statutory
interpretation,
the
appellants
submit
that
the
provision
cannot
withstand
Charter
scrutiny.
They
submit
that
the
demand
for
information
or
documents
under
subsection
231(3),
coupled
with
its
enforcement
mechanism
in
subsection
238(2),
violates
section
8
of
the
Charter
and
cannot
be
saved
under
section
1.
Sections
8
and
1
of
the
Charter
provide:
8.
Everyone
has
the
right
to
be
secure
against
unreasonable
search
or
seizure.
1.
The
Canadian
Charter
of
Rights
and
Freedoms
guarantees
the
rights
and
freedoms
set
out
in
it
subject
only
to
such
reasonable
limits
prescribed
by
law
as
can
be
demonstrably
justified
in
a
free
and
democratic
society.
The
seminal
case
on
the
interpretation
to
be
given
to
section
8
of
the
Charter
is
this
Court's
decision
in
Hunter
v.
Southam
Inc.,
supra.
In
Hunter
the
Court
found
that
section
10
of
the
Combines
Investigation
Act
violated
section
8.
In
coming
to
that
conclusion
the
Court
determined
that
one
of
the
purposes
underlying
the
section
8
right
was
the
protection
of
an
individual's
reasonable
expectation
of
privacy.
In
Hunter
it
was
clear
that
a
search
was
contemplated
by
the
legislation
and
the
Court
therefore
focused
its
attention
on
the
question
whether
the
search
was
reasonable.
In
the
present
appeal
we
must
answer
the
threshold
question
whether
subsection
231(3)
authorizes
a
"seizure"
within
the
meaning
of
section
8
of
the
Charter.
Subsection
231(3)
has
the
effect
of
requiring
the
individual
named
in
the
demand
to
provide
information
pursuant
to
paragraph
(a)
or
documents
pursuant
to
paragraph
(b).
In
Thomson
Newspapers
Ltd.
v.
Canada
(Director
of
Investigation
and
Research,
Restrictive
Trade
Practices
Commission)
(1990),
67
D.L.R.
(4th)
161;
72
O.R.
(2d)
415n
(reasons
delivered
concurrently
herewith),
I
concluded
that
a
seizure
was
"the
taking
hold
by
a
public
authority
of
a
thing
belonging
to
a
person
against
that
person's
will”.
Thomson,
however,
involved
a
seizure
in
a
criminal
or
quasi-criminal
law
context
and
I
confined
my
remarks
to
that
situation.
Subsection
231(3)
is
not
criminal
or
quasi-criminal
legislation.
The
Income
Tax
Act
is
essentially
a
regulatory
statute
since
it
controls
the
manner
in
which
income
tax
is
calculated
and
collected.
This
Court
pointed
out
in
R.
v.
Grimwood,
[1987]
2
S.C.R.
755;
[1988]
1
C.T.C.
44;
88
D.T.C.
6001
at
page
44
(D.T.C.
6001;
S.C.R.
756),
that
"the
purpose
of
ss.
231(3)
and
238(2),
when
read
together,
is
not
to
penalize
criminal
conduct
but
to
enforce
compliance
with
the
Act”.
Since
subsection
231(3)
is
not
legislation
in
relation
to
a
criminal
or
quasi-
criminal
proceeding,
the
question
arises
whether
a
“seizure”
within
the
meaning
of
section
8
takes
place
when
the
state
compels
the
production
of
documents
in
a
regulatory
context.
To
answer
this
question
one
must,
I
think,
return
to
the
general
discussion
of
Dickson,
J.
in
Hunter
on
the
purposes
underlying
the
section
8
right.
One
of
those
purposes,
he
found,
is
the
protection
of
the
individual's
reasonable
expectation
of
privacy.
He
stated
at
pages
159-60
(D.T.C.
6473-74):
The
guarantee
of
security
from
unreasonable
search
and
seizure
only
protects
a
reasonable
expectation.
This
limitation
on
the
right
guaranteed
by
section
8,
whether
it
is
expressed
negatively
as
freedom
from
“unreasonable”
search
and
seizure,
or
positively
as
an
entitlement
to
a
“reasonable”
expectation
of
privacy,
indicates
that
an
assessment
must
be
made
as
to
whether
in
a
particular
situation
the
public's
interest
in
being
left
alone
by
government
must
give
way
to
the
government's
interest
in
intruding
on
the
individual’s
privacy
in
order
to
advance
its
goals,
notably
those
of
law
enforcement.
[Emphasis
in
original.]
It
is
apparent
from
the
above
that
Dickson,
J.
considered
that
the
underlying
value
to
be
protected
by
section
8
of
the
Charter
was
the
individual's
interest
in
privacy.
However,
it
was
his
view
that
the
section
8
protection
was
confined
to
"a
reasonable
expectation"
because
of
the
fact
that
the
words
"search
or
seizure”
were
qualified
by
the
word
“unreasonable”:
see
also
R.
v.
Simmons,
[1988]
2
S.C.R.
495;
55
D.L.R.
(4th)
673.
Undoubtedly
there
will
be
instances
in
which
an
individual
will
have
no
privacy
interest
or
expectation
in
a
particular
document
or
article
required
by
the
state
to
be
disclosed.
Under
such
circumstances,
the
state
authorized
inspection
or
the
state
demand
for
production
of
documents
will
not
amount
to
a
search
or
seizure
within
section
8:
see
R.
v.
Hufsky,
[1988]
1
S.C.R.
621
at
page
638;
4
M.V.R.
(2d)
170.
However,
I
do
not
think
that
is
so
here.
I
reach
that
conclusion
for
two
reasons.
First,
subsection
231(3),
even
construed
narrowly
in
accordance
with
prior
authority,
envisages
the
compelled
production
of
a
wide
array
of
documents
and
not
simply
those
which
the
state
requires
the
taxpayer
to
prepare
and
maintain
under
the
legislation.
Second,
the
legislation
contemplates
that
parties
who
are
not
the
subject
of
an
investigation
or
audit
can
be
compelled
to
produce
documents
relating
to
another
taxpayer
who
is
the
subject
of
such
investigation
or
audit.
Thus,
compelled
production
reaches
beyond
the
strict
filing
and
maintenance
requirements
of
the
Act
and
may
well
extend
to
information
and
documents
in
which
the
taxpayer
has
a
privacy
interest
in
need
of
protection
under
section
8
of
the
Charter
although
it
may
not
be
as
vital
an
interest
as
that
obtaining
in
a
criminal
or
quasi-criminal
context.
I
would
therefore
conclude
that
the
applica-
tion
of
subsection
231(3)
of
the
Income
Tax
Act
to
the
appellants
constitutes
a
"seizure"
since
it
infringes
on
their
expectations
of
privacy.
It
remains
to
be
determined,
however,
whether
the
state's
intrusion
on
that
privacy
interest
is
unreasonable
or,
to
put
it
another
way,
whether
it
violates
the
taxpayers'
reasonable
expectation
of
privacy.
In
Hunter,
Dickson,
J.
set
forth
several
criteria
which
had
to
be
met
in
order
that
a
search
be
reasonable.
I
summarized
these
criteria
in
Thomson
(D.L.R.
177):
(a)
a
system
of
prior
authorization,
by
an
entirely
neutral
and
impartial
arbiter
who
is
capable
of
acting
judicially
in
balancing
the
interests
of
the
State
against
those
of
the
individual;
(b)
a
requirement
that
the
impartial
arbiter
must
satisfy
himself
that
the
person
seeking
the
authorization
has
reasonable
grounds,
established
under
oath,
to
believe
that
an
offence
has
been
committed;
(c)
a
requirement
that
the
impartial
arbiter
must
satisfy
himself
that
the
person
seeking
the
authorization
has
reasonable
grounds
to
believe
that
something
which
will
afford
evidence
of
the
particular
offence
under
investigation
will
be
recovered;
and
(d)
a
requirement
that
the
only
documents
which
are
authorized
to
be
seized
are
those
which
are
strictly
relevant
to
the
offence
under
investigation.
It
is
important
to
note
that
these
criteria
were
enunciated
in
the
context
of
an
appeal
concerning
the
validity
of
a
section
which
was,
in
essence,
criminal
or
quasi-criminal
in
nature.
As
I
stated
in
Thomson
at
pages
211-12:
Not
all
seizures
violate
s.
8
of
the
Charter;
only
unreasonable
ones.
Put
another
way,
an
individual
is
accorded
only
a
reasonable
expectation
of
privacy.
At
some
point
the
individual's
interest
in
privacy
must
give
way
to
the
broader
state
interest
in
having
the
information
or
document
disclosed.
However,
the
state
interest
only
becomes
paramount
when
care
is
taken
to
infringe
the
privacy
interest
of
the
individual
as
little
as
possible.
It
is
because
of
this
need
for
delicate
balancing
that
Dickson
J.
in
Hunter
identified
several
criteria
which
must
be
met
if
a
search
in
a
criminal
investigation
is
to
meet
the
test
of
reasonableness.
I
think
that
these
criteria
were
accurately
summarized
by
J.
Holland
J.
at
trial
as
set
out
earlier
in
these
reasons.
I
would
agree,
however,
that
these
criteria
are
not
hard
and
fast
rules
which
must
be
adhered
to
in
all
cases
under
all
forms
of
legislation.
What
may
be
reasonable
in
the
regulatory
or
civil
context
may
not
be
reasonable
in
a
criminal
or
quasi-criminal
context.
What
is
important
is
not
so
much
that
the
strict
criteria
be
mechanically
applied
in
every
case
but
that
the
legislation
respond
in
a
meaningful
way
to
the
concerns
identified
by
Dickson
J.
in
Hunter.
This
having
been
said,
however,
it
would
be
my
view
that
the
more
akin
to
traditional
criminal
law
the
legislation
is,
the
less
likely
it
is
that
departures
from
the
Hunter
criteria
will
be
countenanced.
This
seems
to
have
been
what
Dickson
C.J.C.
had
in
mind
when
he
said
in
R.
v.
Simmons
(1988),
55
D.L.R.
(4th)
673
at
p.
696,
45
C.C.C.
(3d)
at
p.
319,
[1988]
2
S.C.R.
495,
that
departures
from
the
Hunter
criteria
will
be
exceedingly
rare.
In
Simmons,
supra,
this
Court
departed
from
the
rigidity
of
the
Hunter
criteria.
In
that
case
the
Court
found
that
it
was
not
necessary
for
the
Hunter
criteria
to
be
met
in
the
context
of
customs
searches
since
a
person's
reasonable
expectation
of
privacy
was
quite
low
at
border
crossings.
Chief
Justice
Dickson
stated
at
page
528
(D.L.R.
697):
I
accept
the
proposition
advanced
by
the
Crown
that
the
degree
of
personal
privacy
reasonably
expected
at
customs
is
lower
than
in
most
other
situations.
People
do
not
expect
to
be
able
to
cross
international
borders
free
from
scrutiny.
It
is
commonly
accepted
that
sovereign
states
have
the
right
to
control
both
who
and
what
enters
their
boundaries.
For
the
general
welfare
of
the
nation
the
state
is
expected
to
perform
this
role.
Without
the
ability
to
establish
that
all
persons
who
seek
to
cross
its
borders
and
their
goods
are
legally
entitled
to
enter
the
country,
the
state
would
be
precluded
from
performing
this
crucially
important
function.
Consequently,
travellers
seeking
to
cross
national
boundaries
fully
expect
to
be
subject
to
a
screening
process.
In
my
opinion,
flexibility
is
key
to
interpreting
any
constitutional
document
including
the
Charter.
It
would
be
wrong,
I
think,
for
the
courts
to
apply
a
rigid
approach
to
a
particular
section
of
the
Charter
since
that
provision
must
be
capable
of
application
in
a
vast
variety
of
legislative
schemes.
As
Dickson,
J.
stated
in
Hunter
at
page
155
(D.T.C.
6471-72):
It
is
clear
that
the
meaning
of
"unreasonable"
cannot
be
determined
by
recourse
to
a
dictionary,
nor
for
that
matter,
by
reference
to
the
rules
of
statutory
construction.
The
task
of
expounding
a
constitution
is
crucially
different
from
that
of
construing
a
statute.
A
statute
defines
present
rights
and
obligations.
It
is
easily
enacted
and
as
easily
repealed.
A
constitution,
by
contrast,
is
drafted
with
an
eye
to
the
future.
Its
function
is
to
provide
a
continuing
framework
for
the
legitimate
exercise
of
governmental
power
and,
when
joined
by
a
Bill
or
A
Charter
of
Rights,
for
the
unremitting
protection
of
individual
rights
and
liberties.
Since
individuals
have
different
expectations
of
privacy
in
different
contexts
and
with
regard
to
different
kinds
of
information
and
documents,
it
follows
that
the
standard
of
review
of
what
is
"reasonable"
in
a
given
context
must
be
flexible
if
it
is
to
be
realistic
and
meaningful.
I
think
the
point
is
aptly
made
by
Alan
D.
Reid
and
Alison
Harvison
Young
in
“Administrative
Search
and
Seizure
under
the
Charter"
(1985),
10
Queen's
L.J.
392,at
pages
398-400:
A
person's
expectations
of
privacy
with
respect
to
administrative
search
and
seizure
have
been
less
well
defined
(than
criminal
search
and
seizure).
There
are
facets
of
state
authority,
generically
associated
with
search
or
seizure,
that
are
so
intertwined
with
the
regulated
activity
as
to
raise
virtually
no
expectation
of
privacy
whatsoever.
Inspections
may
be
blended
into
product
grading
functions,
and
in
fact,
they
may
be
so
integrated
into
the
production
process
that
a
refusal
to
inspect
can
by
law
be
invoked
as
a
sanction
to
enforce
the
maintenance
of
prescribed
sanitary
conditions
within
the
plant.
Other
activities
are
regulated
so
routinely
that
there
is
virtually
no
expectation
of
privacy
from
state
intrusion.
Annual
filing
requirements
for
banks,
corporations,
trust
companies,
loan
companies,
and
the
like
are
inextricably
associated
with
carrying
on
business
under
state
licence.
There
are
other
situations
in
which
government
intrusion
cannot
be
as
confidently
predicted,
yet
the
range
of
discretion
extended
to
state
officials
is
so
wide
as
to
create
in
the
regulatee
an
expectation
that
he
may
be
inspected
or
requested
to
provide
information
at
some
point
in
the
future.
This
may
arise
in
the
form
of
an
inspection
carried
out
either
on
a
"spot
check"
basis,
or
on
the
strength
of
suspected
non-compliance.
The
search
may
be
in
the
form
of
a
request
for
information
that
is
not
prescribed
as
an
annual
filing
requirement,
but
is
required
to
be
produced
on
a
demand
basis.
For
the
most
part,
there
is
no
requirement
that
these
powers
be
exercised
on
belief
or
suspicion
of
non-compliance.
Rather,
they
are
based
on
the
common
sense
assumption
that
the
threat
of
unannounced
inspection
may
be
the
most
effective
way
to
induce
compliance.
They
are
based
on
view
that
inspection
may
be
the
only
means
of
detecting
non-compliance,
and
that
its
detection
serves
an
important
public
purpose.
Inspections
to
determine
workplace
safety,
building
safety,
aviation
safety,
fire
safety,
environmental
quality,
food
quality,
health
standards
and
the
like
have
been
routinely
authorized
by
statute
without
specifying
grounds
for
intruding
upon
someone's
privacy.
There
is,
therefore,
a
large
circle
of
social
and
business
activity
in
which
there
is
a
very
low
expectation
of
privacy.
The
issue
is
not
whether,
but
rather
when,
how
much,
and
under
what
conditions
information
must
be
disclosed
to
satisfy
the
state's
legitimate
requirements.
Every
person
who
files
an
annual
tax
return
may
be
said
to
enjoy
a
low
expectation
of
privacy
with
respect
to
information
about
his
income.
But
that
is
surely
tempered
by
an
expectation
that
demands
for
information
have
limits,
and
will
be
administered
under
terms
that
are
fair
and
reasonable.
That
is
what
section
8
of
the
Charter
is
all
about.
[Emphasis
added.]
The
lower
courts,
generally
speaking,
have
shown
no
hesitation
in
applying
section
8
flexibly
in
relation
to
a
wide
variety
of
regulatory
schemes.
A
few
examples
make
the
point.
In
Re
Alberta
Human
Rights
Commission
and
Alberta
Blue
Cross
Plan,
1
D.L.R.
(4th)
301;
[1983]
6
W.W.R.
758
(Alta.
C.A.),
the
Court
held
that
the
provisions
of
the
Individual's
Rights
Protection
Act
which
allowed
for
the
compulsory
production
of
an
individual’s
documents
by
the
Human
Rights
Commission
were
not
unreasonable.
In
that
case
the
Court
did
not
apply
the
standard
of
reasonableness
applicable
to
criminal
cases.
Rather,
the
Court
applied
the
rough
model
of
reasonableness
employed
in
production
of
documents
in
civil
cases.
The
rationale
for
this
was
that
what
is
reasonable
"depends
upon
consideration
of
what
is
sought,
from
whom,
for
what
purpose,
by
whom,
and
in
what
circumstances":
see
(D.L.R.)
page
307.
This
approach
was
followed
in
Re
Reich
and
College
of
Physicians
and
Surgeons
of
Alberta
(No.
2)
(1984),
8
D.L.R.
(4th)
696;
9
C.R.R.
90
(Alta.
Q.B.)
wherein
McDonald,
J.
held
that
the
provisions
of
the
Medical
Profession
Act
which
compelled
the
production
of
a
doctor's
documents
and
records
were
reasonable.
In
Re
Belgoma
Transportation
Ltd.
and
Director
of
Employment
Standards
(1985),
51
O.R.
(2d)
509;
20
D.L.R.
(4th)
156
(C.A.)
the
Court
upheld
the
validity
of
the
provisions
of
the
Employment
Standards
Act
which
allowed
an
employment
standards
officer
to
enter
upon
business
premises
and
require
the
production
of
certain
documents
and
remove
them
for
copying.
MacKinnon,
A.C.J.O.
stated
at
page
512
(D.L.R.
159):
The
standards
to
be
applied
to
the
reasonableness
of
a
search
or
seizure
and
the
necessity
for
a
warrant
with
respect
to
criminal
investigations
cannot
be
the
same
as
those
to
be
applied
to
search
or
seizure
within
an
administrative
and
regulatory
context.
.
.
The
"search
or
seizure”
in
the
instant
case,
if
such
it
is,
is
not
aimed
at
detecting
criminal
activity,
but
rather,
as
indicated,
in
ensuring
and
securing
compliance
with
the
regulatory
provisions
of
the
Act
enacted
for
the
purpose
of
protecting
the
public
interest.
In
R.
v.
Bichel,
33
D.L.R.
(4th)
254;
[1986]
5
W.W.R.
261
(B.C.C.A.),
the
Court
considered
the
validity
of
a
by-law
which
authorized
the
entry
of
a
building
inspector
on
property
or
premises
to
ascertain
whether
there
had
been
compliance
with
the
by-law.
The
Court
applied
the
reasoning
in
Belgoma
and
ruled
that
an
individual's
privacy
interests
in
connection
with
this
type
of
inspection
were
much
less
than
those
in
Hunter.
I
refer
to
these
cases
not
to
approve
or
disapprove
the
results
achieved
but
rather
as
evidence
of
the
need
to
take
a
flexible
and
purposive
approach
to
section
8
of
the
Charter.
It
is
consistent
with
this
approach,
I
believe,
to
draw
a
distinction
between
seizures
in
the
criminal
or
quasi-criminal
context
to
which
the
full
rigours
of
the
Hunter
criteria
will
apply,
and
seizures
in
the
administrative
or
regulatory
context
to
which
a
lesser
standard
may
apply
depending
upon
the
legislative
scheme
under
review.
I
do
not
believe
that
when
the
Chief
Justice
said
in
Simmons
at
page
527
(D.L.R.
696)
that
departures
from
the
Hunter
criteria
would
be
rare
he
was
applying
his
mind
to
searches
or
seizures
in
the
context
of
regulatory
legislation.
I
think
he
was
addressing
as
in
the
cases
of
Hunter
and
Simmons
themselves
searches
or
seizures
in
a
criminal
or
quasi-
criminal
context.
It
is
with
these
considerations
in
mind
that
I
examine
the
reasonableness
of
subsection
231(3)
of
the
Income
Tax
Act.
At
the
beginning
of
my
analysis
I
noted
that
the
Income
Tax
Act
was
based
on
the
principle
of
self-reporting
and
self-assessment.
The
Act
could
have
provided
that
each
taxpayer
submit
all
his
or
her
records
to
the
Minister
and
his
officials
so
that
they
might
make
the
calculations
necessary
for
determining
each
person's
taxable
income.
The
legislation
does
not
so
provide,
no
doubt
because
it
would
be
extremely
expensive
and
cumbersome
to
operate
such
a
system.
However,
a
self-reporting
system
has
its
drawbacks.
Chief
among
these
is
that
it
depends
for
its
success
upon
the
taxpayers'
honesty
and
integrity
in
preparing
their
returns.
While
most
taxpayers
undoubtedly
respect
and
comply
with
the
system,
the
facts
of
life
are
that
certain
persons
will
attempt
to
take
advantage
of
the
system
and
avoid
their
full
tax
liability.
Accordingly,
the
Minister
of
National
Revenue
must
be
given
broad
powers
in
supervising
this
regulatory
scheme
to
audit
taxpayers'
returns
and
inspect
all
records
which
may
be
relevant
to
the
preparation
of
these
returns.
The
Minister
must
be
capable
of
exercising
these
powers
whether
or
not
he
has
reasonable
grounds
for
believing
that
a
particular
taxpayer
has
breached
the
Act.
Often
it
will
be
impossible
to
determine
from
the
face
of
the
return
whether
any
impropriety
has
occurred
in
its
preparation.
A
spot
check
or
a
system
of
random
monitoring
may
be
the
only
way
in
which
the
integrity
of
the
tax
system
can
be
maintained.
If
this
is
the
case,
and
I
believe
that
it
is,
then
it
is
evident
that
the
Hunter
criteria
are
ill-suited
to
determine
whether
a
seizure
under
subsection
231(3)
of
the
Income
Tax
Act
is
reasonable.
The
regulatory
nature
of
the
legislation
and
the
scheme
enacted
require
otherwise.
The
need
for
random
monitoring
is
incompatible
with
the
requirement
in
Hunter
that
the
person
seeking
authorization
for
a
search
or
seizure
have
reasonable
and
probable
grounds,
established
under
oath,
to
believe
that
an
offence
has
been
committed.
If
this
Hunter
criterion
is
inapplicable,
then
so
too
must
the
remaining
Hunter
criteria
since
they
all
depend
for
their
vitality
upon
the
need
to
establish
reasonable
and
probable
grounds.
For
example,
there
is
no
need
for
an
impartial
arbiter
capable
of
acting
judicially
since
his
central
role
under
Hunter
is
to
ensure
that
the
person
seeking
the
authorization
has
reasonable
and
probable
grounds
to
believe
that
a
particular
offence
has
been
committed,
that
there
are
reasonable
and
probable
grounds
to
believe
that
the
authorization
will
turn
up
something
relating
to
that
particular
offence,
and
that
the
authorization
only
goes
so
far
as
to
allow
the
seizure
of
documents
relevant
to
that
particular
offence.
This
is
not
to
say
that
any
and
all
forms
of
search
and
seizure
under
the
Income
Tax
Act
are
valid.
The
state
interest
in
monitoring
compliance
with
the
legislation
must
be
weighed
against
an
individual's
privacy
interest.
The
greater
the
intrusion
into
the
privacy
interests
of
an
individual,
the
more
likely
it
will
be
that
safeguards
akin
to
those
in
Hunter
will
be
required.
Thus,
when
the
tax
officials
seek
entry
onto
the
private
property
of
an
individual
to
conduct
a
search
or
seizure,
the
intrusion
is
much
greater
than
a
mere
demand
for
production
of
documents.
The
reason
for
this
is
that,
while
a
taxpayer
may
have
little
expectation
of
privacy
in
relation
to
his
business
records
relevant
to
the
determination
of
his
tax
liability,
he
has
a
significant
privacy
interest
in
the
inviolability
of
his
home.
In
my
opinion,
subsection
231(3)
provides
the
least
intrusive
means
by
which
effective
monitoring
of
compliance
with
the
Income
Tax
Act
can
be
effected.
It
involves
no
invasion
of
a
taxpayer's
home
or
business
premises.
It
simply
calls
for
the
production
of
records
which
may
be
relevant
to
the
filing
of
an
income
tax
return.
A
taxpayer's
privacy
interest
with
regard
to
these
documents
vis-a-vis
the
Minister
is
relatively
low.
The
Minister
has
no
way
of
knowing
whether
certain
records
are
relevant
until
he
has
had
an
opportunity
to
examine
them.
At
the
same
time,
the
taxpayer's
privacy
interest
is
protected
as
much
as
possible
since
section
241
of
the
Act
protects
the
taxpayer
from
disclosure
of
his
records
or
the
information
contained
therein
to
other
persons
or
agencies.
5.
Disposition
For
these
reasons
I
conclude
that
the
seizure
contemplated
by
subsection
231(3)
of
the
Income
Tax
Act
is
reasonable
and
does
not
violate
section
8
of
the
Charter.
That
being
so,
it
is
unnecessary
for
me
to
consider
whether
the
section
is
justified
under
section
1
of
the
Charter.
I
would
dismiss
the
appeal
and
make
no
order
as
to
costs.
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