Uber Canada – Quebec Superior Court indicates that Uber drivers, as "taxi" operators, should have QST-registered – and ARQ officials on a search could seize computers and smart phones for complete copying

The ARQ obtained a search warrant for searching an Uber Canada office in Montreal. In order to be granted the search warrant, the ARQ employee laying the information was required to have reasonable grounds to believe that Uber Canada was committing an offence. The search warrant was granted inter alia on the suspected grounds (found to be reasonable) that Uber Canada was aiding the drivers in committing the offence of wilfully evading the collection of QST. This was alleged to be occurring inter alia by virtue of its system - for collecting the customer fares (through the customers’ credit cards) - not treating those fares as being subject to QST (or GST).

Cournoyer JCS, in his capacity of judge reviewing the validity of the search warrant after it had been granted and executed, rejected an argument that many of the Uber drivers could be considered to be small suppliers who, thus, were not required to register. Under the Quebec equivalent of ETA s. 240(1.1), a small supplier who carried on a taxi business was required to register, and the Quebec Act respecting transportation services by taxi required the registration of the Uber drivers’ cars as taxis.

On the search, 74 smart phones and 14 computers, which included personal information, were seized. Cournoyer JCS quoted approvingly an American view that given “the massive storage capacity of computers, combined with the ease of hiding evidence inside them,” government officials should be permitted to “seize the entire haystack for subsequent searching off-site.” (He was not über-impressed by the remote rebooting (from San Francisco) of the Montreal office computers when the search commenced, terming this an "obstruction of justice" evidencing an intent to hide illegal conduct.)

It was unnecessary for him to address an alternative alleged offence, namely, that Uber Canada was committing tax evasion by not charging QST on the 20% commissions that it charged its drivers. The judgment (at para. 154) discloses that CRA also has assessed Uber Canada for uncollected HST on its Ontario commissions.

Neal Armstrong. Summaries of Uber Canada Inc. v. ARQ, 2016 QCCS 2158 under ETA s. 240(1.1), ITA s. 231.3(1), General Concepts – Illegality.