Ghermezian – Federal Court discusses the boundaries between ss. 231.2 and 231.6

In relation to five requirements for information (“RFIs”) issued pursuant to s. 231.2(1) to four resident individuals and a corporation, Southcott J found:

• Although the RFIs themselves did not name all the particular parties that the Minister was investigating, this was acceptable since the requirement to first seek judicial authorization under s. 231.2(3) before issuing the RFIs to “unnamed persons” meant only that such persons were “unknown to the Minister” rather than being “unnamed in the RFI.”
• Furthermore, “the unnamed persons provisions are not engaged where a requirement seeks information related to an unnamed person that is not the subject of the Minister’s investigation.”
• Although he was not convinced “that the statutory scheme of the ITA permits the Minister to require production of foreign-based information through s 231.2(1),” it was acceptable to issue requirements under both ss. 231.2 and 231.6 with it to be sorted out later which of the requested information was foreign-based information that was subject to the limitations in s. 231.6 rather than being subject to a potential compliance order under s. 231.7 (for non-foreign based information).
• It was acceptable for some of the RFIs to seek material dating back 21 years.
• “[T]he ITA does not require that the party from whom the information is sought be given any details as to the purpose of the requirement.”
• An RFI request for “any additional information or explanations that are relevant in determining whether or not the rules of former section 94 of the Act (for taxation years before 2007) applies to the Royce and Regent Trusts in respect of the transaction described in the background of this query” was too vague to permit a proper response and needed to be redone.

Neal Armstrong. Summary of Ghermezian v. Canada (Attorney General), 2020 FC 1137 under s. 231.2(1).