Section 241

See Also

Fio Corporation v. The Queen, 2014 TCC 58

s. 241 does not override implied undertaking rule

The taxpayer was reassessed for its 2007 and 2008 taxation years, appealed to the Tax Court and then was further reassessed based on documents which it had provided on discovery.

In finding that the further reassessments had breached the rule in Juman v. Soucette, 2008 SCC 8, that "information obtained on discovery ... is subject to the implied undertaking [that] it is not to be used by the other parties, except for the purpose of that litigation," D'Arcy J rejected the proposition that s. 241 is a "complete code" on what the Minister may or may not do with taxpayer information, stating (at para. 58):

[S]ubsection 241(4) allows for the use of such information in numerous situations relating to the effective application of the ITA. This subsection only provides exceptions to the statutory prohibition contained in subsection 241(1); it does not override common law rules, such as the implied undertaking rules.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) implied undertaking of confidentiality during discovery 196
Tax Topics - Income Tax Act - Section 171 - Subsection 171(1) inherent jurisdiction to void reassessments which breach undertaking 149
Tax Topics - Other Legislation/Constitution - Federal - Tax Court of Canada Act - Section 17.2 time of commencement of appeal 150

Subsection 241(1) - Provision of information


Summers v. Canada (National Revenue), 2014 DTC 5112 [at 7267], 2014 FC 880

taxpayer not entitled to request information about tax-shelter corporation

The taxpayer participated in an alleged tax avoidance scheme involving the subscription of units in a corporation that generated dubious business losses. In the course of largely allowing the taxpayer's application under the Access to Information Act for the Minister's records on the taxpayer, O'Keefe J disallowed the taxpayer's request for the tax information of the corporation, as this would be "the same as allowing a home buyer to access a realtor's tax records" (para. 66). The taxpayer was unable to demonstrate that the corporate information was necessary to prosecute her own appeal.

Other locations for this summary
Tax Topics - Other Legislation/Constitution - Federal - Access to Information Act - Section 24 - Subsection 24(1) taxpayer not entitled to request information about tax-shelter corporation

The Queen v. Diversified Holdings Ltd., 91 DTC 5029 (FCA)

In an action by the mortgagee of a building against Revenue Canada for damages sustained by the building in the course of a seizure, the Crown refused to supply documents containing docket notations made by four collections officers. Décary J.A. noted that the purpose of ss.241(1)(a) and (b) was to protect from disclosure information obtained by the Minister from other persons, and not internally generated documents which are not based on outside information but which instead were generated as "part of a process, the collection proceedings, which is in itself in the public domain and which involves by its very nature the publication of information that would otherwise have remained confidential" (p. 5031). In addition, "section 241 was not enacted for the purpose of helping the Minister out of a negligence claim" (p. 5031), and the Court was not prepared to interfere with the finding of Collier J., who had examined the documents, that their disclosure would entail no breach of confidentiality.

Tucar v. Tucar, 81 DTC 5166 (Ont. U.F.C.)

It was held that although the Unified Family Court did not have the power to order Revenue Canada to produce records of the respondent that it had seized, the Court in an action by the applicant for the variation of a maintenance order could order the respondent to authorize Revenue Canada to produce those records to counsel for the applicant.

See Also

Crestbrook Forest Industries Ltd. v. The Queen, 92 DTC 6187, [1992] 1 CTC 100 (FCA)

Revenue Canada commissioned T.M. Thomson & Associates Ltd. to make a survey of pulp and newsprint pricing discounts and commissions, who obtained the relevant information from members of the industry on the assurance that such information would be protected by the strictest confidentiality. Revenue Canada, in reliance on the resulting report of T.M. Thomson, then assessed the taxpayer on the ground that discounts allowed by it to its customers were in excess of reasonable pulp sales discounts in the industry.

In finding that Revenue Canada could not be required to produce the survey, Hugessen J.A. stated (p. 6188):

"In our view, where the Crown has obtained information in confidence from taxpayers on a voluntary basis and for a specific and defined purpose, it may not subsequently make use of that information for a different purpose, namely the reassessment of other taxpayers, in circumstances where such use will almost inevitably result in a breach of the Crown's undertaking of confidence".

In re MNR v. Huron Steel Fabricators (London) Ltd., 73 DTC 5347, [1973] CTC 422 (FCA)

The Minister based his assessments of the taxpayers on information contained in the tax returns of an inactive company ("Pelon"). The taxpayers successfully applied for an order for the production of the returns. Thurlow J. stated: "there is no basis for a conclusion that the disclosures which the Income Tax Act requires the taxpayer to make are confidential and there is no immunity for them from production in legal proceedings except to the extent that Parliament has expressly spelled out such immunity in the statute."

Administrative Policy

RC4651 “Guidance on Country-By-Country Reporting in Canada” 23 November 2018

CbCR exchanges only with jurisdictions respecting confidentiality

Confidentiality of CbCR reporting information

…Canada will automatically exchange CbCR information with only jurisdictions that are committed to using the information appropriately and preserving its confidentiality.

23 December 2013 Internal T.I. 2013-0498811I7 - Confidentiality of Non-resident Account Number

authorization required even where taxpayer provided underlying information

The Non-resident Account Number of a taxpayer is taxpayer information and, as such, cannot be disclosed by the Minister except in certain circumstances where the Act provides for specific exceptions.

Paragraph 241(5)(b)...provides that an official or other representative of a government entity may provide taxpayer information relating to a taxpayer to other persons, if the taxpayer consents to the disclosure. Therefore the Minister is not permitted to share the new Non-resident Account number with the Representative until authorization is received, despite the fact that the Representative may have provided the taxpayer information necessary to open the new account on the taxpayer's behalf.

88 C.R. - "Confidentiality of Taxpayer Information" - "Communication of Information with Foreign States"

Exchanges of information with treaty partners do not violate s. 241(1) because of the inconsistent law provisions in the legislation enacting the treaties.

87 C.R. - Q41

The stance of RC in Amp was consistent with s. 241 and IC 87-2, para. 48.


Kroft, "Disclosure to and by Revenue Canada", 1991 British Columbia Tax Conference, Volume 1

Subsection 241(2) - Evidence relating to taxpayer information


Diversified Holdings Ltd. v. The Queen, 89 DTC 5294, [1989] 2 CTC 10 (FCTD)

Docket notations made by four Collection Investigations Officers of Revenue Canada came into existence as a result of collection proceedings started against the mortgagor of the plaintiff, and were not made or gathered by the Minister for the purposes of the Act (i.e., respecting general income tax information, procedures and investigations).

Subsection 241(3) - Communication where proceedings have been commenced


Hanif's International Foods Ltd. v. The Queen, 2008 DTC 6630 (Alta. Prov. Ct.)

The provision of the Appellants' tax return to the Crown prosecutor in connection with a review as to whether the Appellants were suffering from financial hardship which should affect their sentencing for an offence committed by them under the Meat Inspection Act (Canada) was not authorized under s. 241(3)(a) as that statute dealt with regulatory offences rather than criminal offences.

The Queen v. Harris, 2001 DTC 5247 (FCA)

The respondent had commenced an action alleging that the Minister, in giving a ruling, had bestowed an undue preference and special benefit on the taxpayer who received it. Sharlow J.A. described an argument of the Crown that s. 241(3)(b) precluded the Minister from disclosing the name of the person to whom the ruling had been granted as an argument that "in essence ... a legal proceeding that seeks to uncover improper administration of the Income Tax Act cannot be said to be related to its administration", and characterized such an argument as illogical and unacceptable. However, this finding did not prevent the Crown from resisting disclosure on the basis of seeking a judicial determination that there was a specified public interest against disclosure of such name.

Attorney - General of Canada and Bassermann (1994), 114 DLR (4th) 104 (FCA)

Before going on to confirm the decision of the Tax Court Judge to allow the appeal of the respondent from an assessment for UIC premiums in relation to temporarial secretary help obtained by him because of a failure of Revenue Canada to produce the income tax returns of the secretary's, Mohoney J.A. noted that amendments to s. 241 would not have prevented what had happened here (pp. 107 - 108):

"The prohibition of s-s.(2) against disclosure of an income tax return 'in connection with any legal proceedings' is subject to the exception of s-s.(3)(b) as to proceedings relating to the administration or enforcement of, among others, the Unemployment Insurance Act ... The order made here can still be made without a taxpayer knowing that his or her return is required to be disclosed in its entirety to a business connection."

Slattery (Trustee of) v. Slattery, 93 DTC 5443, [1993] 3 S.C.R. 430, [1993] 2 CTC 243

proceedings by trustee in bankruptcy that would help CRA recover a preferred claim "related to" ITA enforcement

A trustee in bankruptcy of a taxpayer was permitted to introduce testimony of two Revenue Canada officials in proceedings instituted in the New Brunswick Court of Queen's Bench for a declaration that certain assets registered in the name of the taxpayer's wife were held in trust for the taxpayer's estate. After noting (at p. 5447) that the phrase "relating to" in s. 241(3) had the same wide scope as "in respect of," Iacobucci, J. found that the proceedings related to the enforcement of the Act because their ultimate purpose was the payment of taxes owed to Revenue Canada, which was a preferred beneficiary of the estate. In addition, a contrary conclusion would result in the absurdity that confidential information obtained by Revenue Canada could not be disclosed in proceedings initiated by the trustee in bankruptcy, whereas if the trustee in bankruptcy refused to act and Revenue Canada then took the same proceedings under s. 38(1) of the Bankruptcy Act, such information could arguably be disclosed. Finally, as a policy matter, there was no valid reason why the Minister should be inhibited from recourse to the bankruptcy process, as opposed to being restricted to the administrative remedies set out in Part XV of the Act, such as that contained in s. 160.

Words and Phrases
relating to in respect of

Tyler v. MNR, 89 DTC 5044, [1989] 1 CTC 153 (FCTD), rev'd 91 DTC 5022 (FCA)

Communication of information by Revenue Canada officers to public officers engaged in the prosecution of criminal offences where that information may be of relevance to the offences being prosecuted is within the permitted scope of the subsection.

Wiens v. The Queen, 88 DTC 6243, [1988] 2 CTC 6 (FCTD)

The taxpayer, in a V-Day value dispute, was permitted to call evidence of another taxpayer's assessment with the consent of that taxpayer.

A.G. Canada v. Thibault, 87 DTC 5085, [1987] 1 CTC 156 (Que. C.A.)

A seizure by police officers conducting a criminal investigation of documents in the possession of Revenue Canada pursuant to a search warrant was effected "in respect of criminal proceedings."

Paragraph 241(3)(b)


Canada (Attorney General) v. Fink, 2017 FCA 87

Attorney General is ordered to answer questions respecting remission relief to other taxpayers re set-off of capital losses against s. 7 benefits

After CRA assessed the taxpayer for a taxable employee benefit under s. 7 in respect of a stock option plan, the taxpayer applied for a remission order that would have reduced the taxable benefit based on a capital loss subsequently realized by him when he disposed of the shares acquired under the plan. The taxpayer considered that relief should be granted since his circumstances were similar to those of “SDL” employees who had been granted similar relief based on their participation in an employee stock purchase plan. When the CRA Assistant Deputy Commissioner decided not to recommend remission, the taxpayer applied for judicial review. The Attorney General of Canada objected to a number of questions posed by the taxpayer’s counsel relating to the SDL employees’ remission orders. The Federal Court Judge found that the questions met the tests both of formal and legal relevance, and that the documents fell within the exception of s. 241(3)(b), which authorizes CRA to disclose tax related information in respect of “proceedings relating to the administration or enforcement” of the ITA.

In dismissing the Attorney General’s appeal of this order, De Montigny JA found (at paras 8 and 11):

… While I accept that, generally speaking, the CRA’s treatment of other taxpayers is irrelevant when assessing whether to grant discretionary relief to a given individual, the Judge could reasonably infer … that the CRA’s decision not to recommend remission was premised, at least in part, on the respondent not being in similar circumstances as the SDL employees. Such being the case, the Judge’s finding that the disputed questions were formally and legally relevant and went to the very reasonableness of the CRA’s decision, was open to him.

… This case stands for the proposition that a broad view must be adopted in determining whether a proposed disclosure is in respect of proceedings relating to the administration or enforcement of the ITA. As the outcome of a remission request ultimately affects an individual’s tax liability, it follows that such a proceeding is “connected” or “in relation to” the administration or enforcement of the ITA. Accordingly, the Judge made no reviewable error and correctly interpreted [paragraph 241(3)(b)]… .

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Financial Administration Act - Section 23 - Subsection 23(2) relief provided to other taxpayers in somewhat similar circumstances was relevant to this case 204

Subsection 241(3.5)

Administrative Policy

Frequently asked questions - Canada emergency wage subsidy (CEWS) CRA Webpage 24 September 2021

[Q.35] CEWS Registry

A registry of wage subsidy recipients is now available. The registry provides lists that display the legal name and operating/trade name of corporations who have received or will soon receive the wage subsidy. The registry is updated daily as applications are received, cancelled, or withdrawn.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(9) - Paragraph 125.7(9)(a) 150
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Qualifying Entity - Paragraph (c) - Subparagraph (c)(ii) 236
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(4) - Paragraph 125.7(4)(d) 725
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(4) - Paragraph 125.7(4)(a) 401
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(4) - Paragraph 125.7(4)(b) 367
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Eligible Employee 637
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Eligible Remuneration 474
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(2) - Element B 245
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Qualifying Revenue 1009
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Eligible Entity - Paragraph (f) 79
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Eligible Entity - Paragraph (a) 236
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Qualifying Entity - Paragraph (d) - Subparagraph (d)(ii) 170
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(9) - Paragraph 125.7(9)(b) 379
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(g.5) 198
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(4.1) 194
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Top-Up Percentage 333
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Base Percentage 175
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Service - Paragraph (c) 78
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Baseline Remuneration 267
Tax Topics - Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(a) 141
Tax Topics - General Concepts - Agency 92
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Executive Compensation Repayment Amount 102

Subsection 241(4) - Where taxpayer information may be disclosed

Paragraph 241(4)(a)


In re Glover, 80 DTC 6262, [1980] CTC 531, aff'd 82 DTC 6035, [1982] CTC 29, [1981] 2 S.C.R. 561

Mrs. Glover did not become a "person otherwise legally entitled" to information as to the address of her husband (which would have been disclosed on his tax returns) by virtue of an order made during her divorce trial directing Revenue Canada to provide the Supreme Court of Ontario with her husband's address. To hold otherwise would be to subvert the limitations imposed by s. 241 on the giving of evidence by officials in any non-Income Tax Act civil legal proceedings.

See Also

Ingenious Media Holdings plc & Anor, R (on the application of) v Commissioners for HMRC, [2016] UKSC 54

statutory exceptions to taxpayer confidentiality should be construed narrowly in light of the common law of confidentiality

The Permanent Secretary for Tax in HMRC (Mr Hartnett), gave an interview to two financial journalists from The Times to discuss tax avoidance. The meeting was recorded and was agreed to be “off the record”. On 21 June 2012 The Times published two articles on the subject of film schemes and tax avoidance which identified Mr McKenna and Ingenious Media with tax avoidance film investments in direct quotes from the interview. Mr McKenna and Ingenious Media brought a claim for breach of a duty of confidentiality, in the form of an application for judicial review. Although s. 18(1) of the Commissioners for Revenue and Customs Act 2005 provided:

Revenue and Customs officials may not disclose information which is held by the Revenue and Customs in connection with a function of the Revenue and Customs

s. 18(2)(a)(i) provided that s. 18(1) did not apply to a “disclosure … made for the purposes of a function” of HMRC.

Lord Toulson started by indicating (at para. 17) that under “the common law of confidentiality”:

where information of a personal or confidential nature is obtained or received in the exercise of a legal power or in furtherance of a public duty, the recipient will in general owe a duty to the person from whom it was received or to whom it relates not to use it for other purposes.

Although this “principle may be overridden by explicit statutory provisions” (para. 18), under the “principle of legality:”

“Fundamental rights cannot be overridden by general or ambiguous words.”

Accordingly, s. 18(2)(a)(i) was to be construed narrowly, so that Parliament should not

be taken to have intended by subsection (2)(a)(i) to confer on officials a wide ranging discretion to disclose confidential information about the affairs of individual taxpayers. (para. 25)

In rejecting HMRC’s arguments that the disclosure was justified, he stated (at paras. 34-35):

… [A] general desire to foster good relations with the media or to publicise HMRC’s views about elaborate tax avoidance schemes cannot possibly justify a senior or any other official of HMRC discussing the affairs of individual tax payers with journalists. [T]hat the conversation might have led to the journalists telling Mr Hartnett about other tax avoidance schemes …is far too tenuous to justify giving confidential information to them.

… The fact that Mr Hartnett did not anticipate his comments being reported is in itself no justification for making them.

Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Principle of Legality common law of confidentiality not overridden by general words 335

Administrative Policy

May 2015 Alberta CPA Roundtable, Q.1 (Plenary Session)

s. 241(4)(a) may permit disclsoure to taxpayer of 3rd party information that is relevant to an adjustment ot the taxpayer's return

CRA appeared to interpret s. 241(4)(a) as permitting it to disclose information regarding a third party to the extent it was relevant to an adjustment made by it to the taxpayer’s return, stating:

Paragraph 241(4)(a) permits the provision of taxpayer information to any person that can reasonably be regarded as necessary for the purposes of the administration and enforcement of the Act. Where information obtained from a third party is to form a part of the basis of an adjustment, auditors are instructed to ensure that only information relevant to the adjustment is provided.

Paragraph 241(4)(b)

Administrative Policy

August 1992 Memorandum (Tax Window, No. 23, p. 8, ¶2152)

Discussion of whether there can be disclosure in the situation where a purchaser has assumed certain contingent liabilities of a vendor as part of the purchase price of a property, the vendor excludes those liabilities in calculating his proceeds of disposition and the purchaser includes such costs in determining his cost of the property.

88 C.R. - "Confidentiality of Taxpayer Information" - "Section 241 of the Income Tax Act"

The amendment would deal with the situation where information provided by a company in connection with a flow-through share issue reveals that a number of expenses allocated to investors do not meet statutory requirements.

Paragraph 241(4)(e)

Administrative Policy

19 August 1992 Memorandum 921931 (April 1993 Access Letter, p. 152, ¶C220-031)

S.241(4)(e) did not authorize RC to communicate to a purchaser that the inclusion by the purchaser in the cost to it of property of the amount of certain contingent liabilities was inconsistent with the treatment followed by the vendor.

Paragraph 241(4)(k)

Administrative Policy

14 March 2013 Internal T.I. 2012-0451131I7 - Trustee's Rights & Obligations under the Act

The Minister may disclose information respecting the bankrupt to the trustee in bankruptcy without a T103 given that the trustee is deemed to be the bankrupt's agent by s. 128, and the trusteee is entitled to taxpayer information under s. 164(1) of the Bankruptcy and Insolvency Act.

Subsection 241(9.5)

Administrative Policy

26 February 2015 CBA Roundtable, Q. 1

release of information to police must first be approved by the CPB Assistant Commissioner

If a voluntary disclosure that includes information about having engaged in serious criminal activity that falls within ETA s. 295(5.04) or ITA s. 241(9.5), when will CRA disclose this information to the police or other law enforcement agencies? CRA responded:

The CRA will not collect any additional information nor undertake any additional steps to uncover evidence of an offence. The provision is strictly limited to information that CRA officials gather in the course of their regular duties. The legislation does not create an expectation that CRA officials should proactively look for possible evidence of listed serious offences.

… [N]o information will be released to the police or other law enforcement agencies without the approval of the Assistant Commissioner of the Compliance Programs Branch.

… Since enactment in June 2014, the CRA has not exercised its authority under the new legislation.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 295 - Subsection 295(5.01) strict limits on provision of evidence to police 53

Subsection 241(10)

Taxpayer Information


783783 Alberta Ltd. (Vue Weekly) v. The Queen, 2010 DTC 5125 [at 7064], 2010 ABCA 226

The taxpayer produced an ad-supported newspaper. The taxpayer brought an action against CRA alleging that CRA should have denied the deduction by its chief competitor of advertising expenses on the basis that the competitor had ceased to qualify as a "Canadian newspaper." The Minister brought a motion to strike the plaintiff's statement of claim on the basis that it disclosed no cause of action.

The court found that s. 241 was not determinative of the plaintiff's action. Slatter J. wrote at para. 35: "In this case the only evidence that plaintiff would need to prove its damages would be the gross total of advertising expenses relating to [the competing magazine] that the defendant Canada improperly (allegedly) allowed to be deducted. The defendant Canada could compile that information without disclosing the identities of individual taxpayers." The evidence in question was therefore not "taxpayer information" as defined in s. 241(10). However, the taxpayer's action was dismissed on the basis that "the relationship between each taxpayer and the assessor is personal and private" and "imposing a duty on the assessor to account to one taxpayer for the way it assessed another taxpayer impedes on the relationship in an unacceptable way." (Para. 46.)