Thompson – Supreme Court of Canada indicates that lawyers cannot provide their client-related accounting records to CRA

In a companion case to Chambre des notaires, the Supreme Court held that CRA was precluded from requiring an Alberta lawyer to provide detailed accounts receivables listings for his clients (with the focus being on the fact that this would reveal their names) – even though the apparent purpose of this was only for the purpose of garnishing those receivables rather than finding out about the clients’ tax affairs. In the course of their joint judgment, Wagner and Gascon JJ stated:

[S]olicitor-client privilege is a right that belongs to, and can only be waived by, a client of a legal professional… .

In order to properly afford clients the opportunity to raise their right to solicitor-client privilege, they must… be afforded the opportunity to decide whether they wish to contest the disclosure of the information requested by the state, and if they do wish to do so, they must be permitted to make submissions in that regard on their own behalf.

Thus, for example, it would be professional misconduct for a law firm, on a GST audit, to provide client-specific particulars of their billing respecting zero-rating, government-exempt disbursements or the provincial place-of-supply rules.

Neal Armstrong. Summary of Canada (National Revenue) v. Thompson, 2016 SCC 21 under s. 232(1) – solicitor-client privilege.