Chambre des notaires – Supreme Court of Canada finds that lawyers are immune from s. 231.2 demands for information

CRA issued s. 231.2(1) demands to Quebec notaries to provide information about their clients for tax collection or audit purposes. The Supreme Court held that:

[T]he requirement scheme in the ITA infringes s. 8 of the Charter and must be declared to be unconstitutional insofar as it applies to notaries and lawyers in Quebec…[and] the exception for a lawyer’s accounting records set out in the definition of “solicitor‑client privilege” in s. 232(1) of the ITA is unconstitutional and invalid. The manner in which it limits the scope of professional secrecy is not absolutely necessary to achieve the purposes of the ITA, which means that the exception is contrary to s. 8 of the Charter.

They noted that potentially confidential information in accounting records includes not only description of services, but also the client names (and presumably any specific address that would permit the identification of a client) and the amount of the fees charged.

Thus, Canadian lawyers do not have to respond to s. 231.2 demands, at least until it (and the exclusion in the s. 232(1) definition of solicitor-client privilege for accounting records) is amended. The Court gave a sort of hint as to what might be acceptable when it noted that that it was helpful to their analysis that the ARQ and the Chambre des notaires had reached a settlement in which it was agreed that, before issuing a formal demand to a notary, the ARQ would try to obtain the information from various public records or by requesting the information from the taxpayer or another third party to the contract, that the permission of the taxpayer would be sought if the ARQ determined that only a lawyer or notary had the information, that if the ARQ determined that professional secrecy did not apply, a court order would be sought, that any formal demand would specify the information or documents covered, and that a notary who invoked professional secrecy in good faith would not be prosecuted.

Neal Armstrong. Summary of Canada (Attorney General) v. Chambre des notaires du Québec, 2016 SCC 20 under Charter, s. 8 and 232(1) – solicitor-client privilege.