Shopify – Federal Court finds that s. 231.2(3)(b) currently did not authorize unnamed person requirements pursuant to treaty information-exchange Articles

Shopify was a Canadian corporation providing a software platform for online e-commerce transactions. After receiving a request from the Australian Tax Office (ATO) for such information pursuant to Article 21 of the Canada-Australia Treaty (the “Convention”) a year previously, the Minister issued a requirement to Shopify pursuant to s. 231.2 of the ITA (and s. 289(3) of the ETA) for information identifying listed particulars for all merchant customers of Shopify who had revenues from sales to customers located in Australia. The Ministers sought judicial authorization of such requests pursuant to the “unnamed persons” provisions of s. 231.2(3) (and s. 289(3) of the ETA).

Régimbald J noted that, although s. 231.2(1) granted the Minister the authority to obtain information or documents regarding named persons for purposes relating to the administration or enforcement of the Act or a “listed international agreement” such as the Convention, in the case of a requirement regarding unnamed persons, s. 231.2(3)(b) instead only referred to the verification of compliance by a person or persons in a group with any obligation under the Act, i.e., there was no mention of any listed international agreement.

This was telling. For instance, it seemed “highly unlikely that Parliament would refer to ‘this Act’ twice within section 231.2 and assign a different meaning to each reference”. Furthermore, a refusal to exchange information on the basis of s. 231.23(b) was consistent with Article 21 of the Convention, which did not impose on the Minister an obligation to carry out measures at variance with Canadian law.

Although it was not necessary for him to do so, Régimbald J went on to consider whether the requirement satisfied the stipulation in s. 231.2(3)(a) that the referenced group be “ascertainable.” In this regard, he stated:

As long as the identities of those within the target group can be readily made exact or determined with sufficient precision by the Court and the third party, the Minister will have met the legislative precondition in paragraph 231.2(3)(a) and identified a sufficiently clear “ascertainable” group. On the evidence adduced, that is the case here.

He further indicated that it would not be appropriate for the Court to exercise its residual discretion in favour of not compelling the disclosure (if disclosure had not already been precluded on the s. 231.2(3)(b) grounds). It did not matter that Shopify Ireland and Shopify Singapore might be in possession and control of some of the requested information, as such information could be accessed in Canada by Shopify itself. Furthermore, if Shopify could not provide a response within the 45 days stipulated in the requirement, the Court retained jurisdiction to extend the time to respond on motion from Shopify.

Thus, the requirement would have been authorized if the amendment to add “listed international agreements” to s. 231.2(3)(b) had been already implemented.

Neal Armstrong. Summary of Canada (National Revenue) v. Shopify Inc., 2025 FC 968 under s. 231.2(3).