The mandatory-disclosure rules do not comply with the constitutional requirement to place a disclosure obligation on lawyers only when “absolutely necessary”

Chambre des notaires found that a limitation imposed on solicitor-client privilege (SCP) that was “not absolutely necessary to achieve the purposes of the ITA” thereby infringing on s. 8 of the Charter, and further found that there it was “not absolutely necessary … to rely on notaries or lawyers rather than on alternative sources in order to obtain the information or documents being sought.”

Considering the number of parties simultaneously subject to the MDR disclosure obligations, and considering that subjecting lawyers to an MDR disclosure obligation creates a high-risk situation for the clients to whom the SCP belongs, it does not seem “absolutely necessary” to rely on lawyers “rather than on alternative sources in order to obtain the information or documents being sought.”

Other jurisdictions instead place the primary disclosure obligation on the promoter.

Relying (as contemplated under ss. 237.3(17) and 237.4(18)) on lawyers to raise SCP would place an “inappropriate burden” on them (see Chambre des notaires, at para. 44) and, in particular, they would be caught between their duty to assert SCP and the potentially severe sanctions for failing to report all relevant information, thereby putting them in a position of direct conflict with their clients’ interests.

Neal Armstrong. Summary of Élisabeth Robichaud and Marie-Emmanuelle Vaillancourt, “An Avoidable Threat to the Protection of Solicitor-Client Privilege,” Perspectives on Tax Law & Policy, Vol. 4, No. 3, September 2023, p. 11 under s. 237.4(18).