Le Dain, J:—This is an appeal from a judgment of the Trial Division which dismissed applications for certiorari and an action for a declaration challenging the validity of requirements for information under subsection 231(3) of the Income Tax Act, SC 1970-71-72, which is as follows:
(3) The Minister may, for any purposes related to the administration or enforcement of this Act, by registered letter or by 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.
The appeal involves two requirements addressed to the appellant broker for records or information concerning the trading transactions of all its customers in the commodities futures market, one on May 8, 1980 and the other on October 8, 1980. The requirement of May 8 is the subject of one application for certiorari (Court File No T-2478-80), and the requirement of October 8 is the subject of another (Court File No T-5461-80). The validity of both requirements is also challenged by an action for a declaration (Court File No T-5580-80). For greater procedural or jurisdictional certainty the appellant also attacked the requirements directly in this Court by section 28 applications (Court Files A-317-80 and A-731-80). With what appears to have been consent, or at least without objection, the applications for certiorari and the action for a declaration were “consolidated” by order of the Trial Division on December 10, 1980. Clearly the intention of the parties and the Court was that the challenge to validity should be dealt with on its merits, whether the proper means of attack was certiorari or an action for a declaration. While at the hearing in this Court a question was raised by the Court as to whether these proceedings could properly be consolidated, and there was some discussion as to the proper characterization of the requirements for purposes of judicial review, it was clear that the respondent, who had not objected to the consolidation, was content to have the issue determined upon the basis that if the requirements were found to be invalid the appel- lant was entitled either to certiorari or to declaratory relief. The respondent’s jurisdictional objection was directed to the section 28 applications. I propose that we should consider the issues on that basis.
The evidence consists of the affidavits, with exhibits, of Mr M R Kotchan, Assistant Treasurer of the appellant, in support of the applications for certiorari, and the affidavits, with exhibits, of Mr H T Yaeger, an auditor of the Department of National Revenue, in response, as well as the cross- examination of Mr Yaeger on his affidavits. According to the affidavit of Mr Yaeger the Minister of National Revenue decided around October, 1975 that it was necessary to check on compliance with the Income Tax Act by traders in the commodities futures market. It is further stated that specific and independent information as to the dealings of such traders is available only from commodities futures market brokers, and that the appellant is among the largest of such brokers in Canada.
Between January 1976 and January 1979 there was correspondence between the Department and the appellant concerning the possibility of an “income Tax Compliance Project” involving computer access to the 1976 “clients’ commodity monthly statements” of the appellant. In January 1976 the appellant agreed to maintain these statements in a “machine sensitive form” commencing January 1, 1976. In a letter dated February 17, 1977, concerning this project, the Department acknowledged that the appellant questioned the legal authority to require this information, but proposed that the feasibility of the project be determined before attempting to resolve the legal issue. It was suggested that the appellant provide the Department with one month’s commodity statement file for test purposes on condition that the Department guarantee the confidentiality of the information and that no direct or indirect use be made of it during the “test period”. The file would be returned after the test period regardless of further action, if any, planned by the Department, and if the Department decided to pursue the project a formal requirement for information and production of documents would be issued. By letter dated March 3, 1977 the appellant agreed to this proposal, adding that it was on the understanding that the information would be used “only for testing purposes”, and that “other investment dealers have been requested to provide similar information”. In December 1977 the Department returned the magnetic tape file which the appellant had provided, indicating that it was unable to use the informtion at that time because of limited resources. Pending a final decision on feasibility, it requested the appellant to retain its 1976 clients’ commodity monthly statement file until June 30, 1978. In September 1978 it requested the appellant to retain the 1976 file until December 31, 1978.
In December 1978 the appellant confirmed that it had retained, at the Minister’s request, its monthly commodity files for 1976, 1977 and 1978, except for the statements of January 1977 and January 1978 which it did not have in its possession. By letter dated January 25, 1979, the Department confirmed that it was now “prepared to proceed with the processing” of the appellant’s clients’ commodity monthly statements file “on a test basis for the 1977 calendar year, in what has been previously referred to as an Income Tax Compliance Project”, and sought to determine when it could begin the project. In reply on February 13, 1979 the appellant stated that “due to the time involvement of both personnel and computer it is not practical to proceed on the basis outlined in your letter”. It added that “the information is available in other forms” and that it would appreciate receiving confirmation that it was no longer necessary to retain the magnetic tape files for the 1977 commodity monthly statements.
On June 28, 1979 Mr Yaeger wrote on behalf of the Department to the appellant as follows:
This is to confirm out meeting of June 27th in which we requested the production of a copy of the monthly magnetic tape file, known as the Clients’ Commodity Monthly Statements, for each of the months in the 1977 calendar year. We understand that a search of your tape library indicated that the January 1977 file was not retained.
Since our last correspondence on this matter in February 1979, we have obtained the technical expertise with which we feel confident to be able to process the information on these files. We now propose the following procedure in processing the information on a test basis:
— we will supply magnetic tapes to be used by the corporation in copying the files for the 1977 calendar year. The corporation will provide us with record layouts and other technical information regarding the copied tapes.
— the Department will guarantee the confidentiality of the data including assurances that no direct or indirect use will be made of any information obtained from the files during the test period.
— on completion of the test period:
(1) the Department will advise the corporation of any intent to use the information in an Income Tax compliance project and at that time, as discussed, we will serve a requirement for the information contained on these files.
(2) the Department agrees to treat the other Canadian Commodity brokers in a similar manner by also requesting their files and using the information as required in the project.
Please contact the writer when and to whom our tapes are to be delivered to facilitate the copying procedure. Your co-operation in this matter is appreciated.
Certain tapes were provided by the appellant to the Department in response to this letter but they did not contain all the information sought by the Department, and Mr Yaeger wrote to the appellant on December 21, 1979 as follows:
This letter confirms our telephone conversation of December 19th in which we explained the current status in our “Commodity Project”.
To date we have successfully translated your 1977 monthly magnetic tape files for the project, and to facilitate the next step in our test of this information, we require the following:
(1) A complete listing of office locations, identifying each by the office number. (2) A complete listing of customer name and address, identifying each by the account number.
As stated in our letter of June 28, 1979, we will advise you if we intend to use the information for reassessment purposes.
On February 25, 1980, the appellant’s solicitors wrote to Mr Yaeger as follows, indicating why the appellant refused to provide the information requested:
It is our understanding that this information is required for a test project and is not related to a genuine and serious enquiry into the tax liability of any specific persons or persons.
It appears that this exploratory project is being based on information from Richardsons alone and not from any other security house.
As solicitors for Richardsons, we have a real concern about the authority of the Department to demand this information and the right of Richardsons to provide it, except under clear statutory authority and a binding demand order or notice.
Richardsons have an obligation to keep confidential the business of their customers, and any voluntary breach of this obligation by Richardsons would be improper and would harm Richardsons’ name and competitive position if it became known.
In our opinion, neither Section 231(3) or any other section of the Income Tax Act authorizes the Department to request the information concerned unless it is related to “a genuine and serious enquiry into the tax liability of a specific person or persons”.
The preceding words in quote are taken from the case of the Canadian Imperial Bank of Commerce v Attorney General of Canada, Supreme Court of Canada June 25, 1952, 62 DTC 1236 at page 1238.
On May 8, 1980 a “Requirement for Production of Records” with respect to the 1977 calendar year was issued by the Director-Taxation in the Winnipeg District Office and served on the appellant. It reads as follows:
For purposes related to the administration or enforcement of the Income Tax Act, pursuant to the provisions of subsection 231 (3)(b) thereof, I hereby require from you production of:
(1) A complete listing of customer, name and address, identifying each by the account number for the calendar year 1977,
(2) A complete listing of branch office locations, identifying each by the office number, for the calendar year 1977,
as used in the preparation of clients’ commodity monthly statements for the Securities Division.
To comply with this requirement you must produce without delay any and all of the above referred records to the officer or officers of the Department of National Revenue who serve this requirement on you. If this requirement is not complied with, you may be liable to prosecution without further notice under subsection 238(2) of the Income Tax Act.
The appellant’s solicitors acknowledged the requirement by letter dated May 14, 1980, indicating that they had advised their client it was not legally obliged to comply with the requirement, and that they had been instructed to seek clarification of the issue of legal authority by proceedings in the Federal Court.
On October 8, 1980, a “Requirement for Information under paragraph 231(3)(a) of the Income Tax Act” with respect to the calendar years 1978 and 1979 was issued by the Director-Taxation and served on the appellant. It reads as follows:
As a result of a series of meetings and exchanges of letters between your representative and members of this Department, extending over some five years, you are aware that the Minister of National Revenue wishes to obtain from you a listing of your clients for whom it is part of your business to engage in commodity transactions. On May 8, 1980 a requirement for production of records was issued to you in respect of the calendar year 1977 and the issue of the Minister’s entitlement to production of the requested records is presently before the Court of Queen’s Bench, the Trial Division of the Federal Court and the Federal Court of Appeal.
For purposes of this requirement, which relates to the calendar years 1978 and 1979, I wish to make it perfectly clear that the Minister has no reason to believe that any specific client of your company for whom you engaged in commodity trading in those years has either avoided or evaded due payment of income tax. The Minister takes the position that proper and fair administration of the Income Tax Act in a consistent and equitable manner requires him to have available the information in your records showing the trading in which they engaged, identifying all persons who engaged in commodity trading through your company in 1978 and 1979 so that he can relate this information to the income tax information certified by those persons liable to taxation, to be a true and correct statement of their income for the relevant periods. Without the means even to carry out a random or sample check against such information, it is obviously impossible for the Minister to specify which, if any, cases may require further investigation or information or even to determine whether any of such persons who may not have filed at all are in fact and in law liable to pay income tax in Canada.
In the Minister’s view, a project of this sort, involving a broad survey of persons trading in commodity futures, to test and determine the degree of compliance by such persons with the legislation, is necessary and is a purpose related to the administration of the Income Tax Act.
You are therefore required for that purpose pursuant to paragraph 231(3)(a) of the Income Tax Act to provide to the Minister by December 8, 1980, the following information for the period January 1, 1978 to December 31, 1979:
the names and addresses of all persons on whose behalf you carried out trading in commodities, identifying each by account number;
the office of your company through which such trading was carried out;
and the details of all monthly transactions resulting in a net gain or loss position for each calendar year for each such person as used in the preparation of your clients’ commodity statements for the Securities Division.
To comply with this requirement you should forward the information hereby required, on magnetic computer tape, to the Director of Taxation, 391 York Avenue, Winnipeg, Manitoba, by registered mail by December 8, 1980. If you so request, in your acknowledgment of this letter, arrangements will be made for an officer of the Department of National Revenue to attend at your office to receive the information required. Provision of the information to that officer at the time of his attendance at your office will be considered as compliance with this requirement, if your acknowledgment is received on or before December 8, 1980.
Your attention is directed to the penalty provided in subsection 238(2) of the Income Tax Act for default in complying with this requirement.
In paragraph 21 of Mr Yaeger’s affidavit it is stated:
21. THAT without receipt of the information contained in the said requirements, it is virtually impossible for all practical purposes for the Minister to enforce the provisions of the Act in a serious and genuine attempt to ensure compliance by traders in the commodities futures market, where there is no other independent means of ascertaining the existence of these transactions.
The appellant attacks the validity of the requirements of May 8 and October 8, 1980, on four grounds which may be summarized as follows:
1. The requirements were not issued for a purpose related to the administration or enforcement of the Act within the meaning of subsection 231(3).
2. If subsection 231(3) purports to confer authority for requirements for information of the scope and purpose in the present case it is ultra vires the Parliament of Canada.
3. The requirements are invalid because they were issued on behalf of “Revenue Canada Taxation”, a non-existent entity.
4. The requirement of May 8, 1980 is invalid because it did not stipulate a reasonable time for compliance as required by subsection 231(3).
All of these contentions were rejected by the Trial Division.
The first contention is based primarily on the judgment of the Supreme Court of Canada in The Canadian Bank of Commerce v The Attorney General of Canada, [1962] S.C.R. 729; 62 DTC 1236. That case involved a requirement for information under subsection 126(2) of the Income Tax Act, RSC 1952, c 148, which is in exactly the same terms as the present subsection 231(3). The bank was served with a requirement for information concerning all its business dealings with the Union Bank of Switzerland. In the special case on which the question of validity was determined it was stated that the information required included “a great deal of private information in respect of the business and affairs of the Union Bank of Switzerland and of many other corporations and individuals, some resident in Canada and some not resident in Canada”. It was admitted in the Ontario High Court that the requirement related to a genuine and serious inquiry into the tax liability of some specific person or persons, although it was not admitted that the tax liability of the Union Bank of Switzerland was under investigation. The tax liability of the Canadian Bank of Commerce was not under investigation. The Supreme Court of Canada held, affirming the majority judgment of the Ontario Court of Appeal, that the requirement was valid since it was for a purpose related to the administration or enforcement of the Act within the meaning of subsection 126(2). The Court based its conclusion on the as- sumption of fact, which had been admitted, that the requirement related to a genuine and serious inquiry into the tax liability of some specific person or persons. Kerwin, CJ, with whom three other members of the Court concurred, was of the view that the specific person whose tax liability was under investigation was the Union Bank of Switzerland, which was the only person named in the requirement. He concluded at p 734: “Therefore, so far as the Union Bank of Switzerland is concerned, if it carried on business in Canada it is liable to tax and it is part of the administration or enforcement of the Act to discover if the Union Bank was subject to taxation”. Cartwright, J (as he then was), with whom four other members of the Court concurred, did not base his conclusion on the assumption that the tax liability of the Union Bank of Switzerland was under investigation, which he said might or might not be the case, but on the assumption that the requirement related to a genuine and serious inquiry into the tax liability of some specific person or persons, whether or not it might be the Union Bank of Switzerland. He said at p 739: “The purpose of the requirement, then, is to obtain information relevant to the tax liability of some specific person or persons whose liability to tax is under investigation; this is a purpose related to the administration or enforcement fo the Act”. All the members of the Court agreed that it was not necessary that the person to whom a requirement for information is adressed be one whose tax liability is under investigation, and further that a requirement for information is not rendered invalid by the fact that the information sought will disclose private transactions involving a number of persons who are not under investigation and may not be liable to tax.
The appellant argues from the judgment in the Canadian Bank of Commerce case that a requirement for information under subsection 231(3) is not for a purpose related to the administration or enforcement of the Act unless the purpose is to obtain information that is relevant to the tax liability of some specific person or persons whose tax liability is under investigation. It is contended that the requirements in the present case do not meet this test. It is said that a requirement for information concerning all the customers of the appellant engaged in commodity trading is not a requirement related to some specific person or persons within the meaning of the dicta in the Canadian Bank of Commerce decision. It is further argued that on the Department’s admission none of these customers is a person whose tax liability is under investigation, as that was understod in the Canadian Bank of Commerce case. On the first branch of the argument the appellant emphasizes the word “some” as well as “specific” and contends that they mean paticular persons, identified by name, and cannot be applied to all persons of a certain class. The appellant also relies on the following exchange in the cross-examination of Mr Yaeger:
Q I take it you, and when I say “you” I mean your Department, were not attempting to obtain information or records with respect to the tax liability of a specific person or persons?
A Not specific prsons, no.
Q Not a specific person or persons?
A No.
On the second branch of the argument the appellant relies particularly on the following statement in the requirement of October 8, 1980:
For purposes of this requirement, which relates to the calendar years 1978 and 1979, I wish to make it perfectly clear that the Minister has no reason to believe that any specific client of your company for whom you engaged in commodity trading in those years has either avoided or evaded due payment of income tax.
Finally, the appellant emphasizes the references in the Department’s letters to a tax compliance “project” and a “test period” as indicating, in its submis sion, that the requirements did not relate to a genuine and serious inquiry into the tax liability of some specific person or persons, as in the Canadian Bank of Commerce case.
In my respectful opinion there is nothing in the judgment of the Supreme Court of Canada in the Canadian Bank of Commerce case that prevents us from concluding that the purpose for which the requirements for records or information were issued in the present case was a valid one. That purpose, as disclosed by the affidavit of Mr Yaeger and the requirement of October 8, 1980, was to verify whether there had been compliance with the Income Tax Act by the commodity trading customers of the appellant. That is clearly in my opinion a purpose related to the administration or enforcement of the Act within the meaning of subsection 231(3). The judgment in Canadian Bank of Commerce was based on the agreed fact that the requirement in that case related to a genuine and serious inquiry into the tax liability of some specific person or persons, but I do not read the judgment as purporting to treat that as the only valid purpose under what is now subsection 231(3). In any event I am far from certain that the present case is essentially distinguishable from that on which the majority of the Supreme Court based their conclusion. In the majority opinion of Cartwright J the words “some specific person or persons” are obviously understood as referring not to named persons but merely to existing, identifiable persons. A reference to all of the commodity trading customers of the appellant comes within this meaning of the words. As to the nature of the inquiry or investigation, the essential assumption of fact in the Canadian Bank of Commerce case was that it was a genuine and serious inquiry into the tax liability of some specific person or persons. There are references in the opinions to the tax liability specific persons being “under investigation”. It is not clear in my opinion whether these words were understood to mean that the Department had reason to believe that specific persons had attempted to evade payment of tax, or merely, as in the present case, that the Department sought to determine whether specific persons had complied with the Act. There may be a genuine and serious inquiry into tax liability without the Department necessarily having reason to believe that specific persons have attempted to evade payment of tax. As for the references in the Department’s letters to a tax compliance “project” and to a “test period”, there was undoubtedly a period in which the Department was attempting to determine the feasibility of the project, but with the requirements of May 8 and October 8 it had clearly decided to carry out the investigation it had originally decided to attempt in October 1975. There is no doubt that the requirements represented a genuine and serious inquiry to determine from the best source of information available whether there had been compliance with the Act.
In addition to its reliance on the Canadian Bank of Commerce case the appellant contended, in support of its interpretation of subsection 231(3), that information of the kind sought in the present case with respect to a whole class of persons could only be properly obtained by an information return provided for by regulation made by the Governor in Council pursuant to paragraph 221 (1 )(d), which reads:
221. (1) The Governor in Council may make regulations
(d) requiring any class of persons to make information returns respecting any class of information required in connection with assessments under this Act,
The provisions of Part Il of the Regulations (sections 200 and following) show that what is generally contemplated by an information return is a report of a payment or receipt that is taxable. It is required of certain persons who make payments of various kinds to taxpayers. The information that is sought by the requirements in the present case is not a report of payments by the appellant to its customers, but a record of the trading transactions of its customers from which the income of the customers, as reported in their tax returns, may be verified. Even if paragraph 221(1)(d) confers authority to require by regulation that such information be provided by an information return, that would not in my opinion, at least until the authority under that section were exercised, preclude the exercise of the authority conferred by subsection 231(3).
The second contention of the appellant is that if subsection 231(3) authorizes a requirement for information of the scope and purpose sought in this case it is ultra vires the Parliament of Canada. This contention is in my opinion without any merit at all and is, indeed, in conflict with the suggestion that the Governor in Council could require that such information be provided by an information return. If the purpose for which the information is required in the present case is a purpose related to the administration or enforcement of the Act then subsection 231(3), as so construed and applied, obviously falls within the legislative authority of the Parliament of Canada under subsection 91(3) of the BNA Act — “The raising of Money by any Mode or System of Taxation”. The raising of money by taxation necessarily involves what is related to the administration and enforcement of the taxation legislation.
The appellant’s third contention is that the requirements of May 8 and October 8, 1980, are invalid because they were made on behalf of “Revenue Canada Taxation’, a non-existent entity. The words “Revenue Canada Taxation” appear in the upper left hand corner of the requirements, but there is a clear indication in the body of the requirements that they issue from the Department of National Revenue, and they are signed by the Director- Taxation, who is described in the requirement of May 8, 1980 as “Director- Taxation Department of National Revenue, Taxation” and in the requirement of October 8, 1980, as “Director-Taxation Winnipeg District Office”. There cannot be any doubt on the face of these requirements that they are signed by an official of the Department of National Revenue, Taxation. By subsection 900(2) of the Income Tax Regulations an official holding a position of Director-Taxation in a District Office of the Department of National Revenue, Taxation, may exercise the authority of the Minister under subsection 231 (3) of the Act. For these reasons the third contention is in my opinion without merit.
The appellant’s fourth contention is that the requirement of May 8, 1980 is invalid because it did not stipulate a reasonable time for compliance as required by subsection 231(3), but instead required that the information be provided “without delay”. The stipulation of compliance “without delay” must be seen in the light of the fact that the appellant was on notice that the Department was seeking this information in December 1979. On this issue I am in agreement with the view taken by the learned trial judge. The use of the words “without delay” in the requirement of May 8, 1980 cannot invalidate the requirement. Whether a reasonable time for compliance was allowed before the appellant was treated as being in default is a question of fact that affects the issue whether there has been compliance or non- compliance, but not the validity of the requirement.
For all of these reasons I would dismiss the appeal with costs.
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