In connection with an application by the taxpayer (the Respondent) to have requirements issued to it by the Minister pursuant to ss. 231.1 and 231.6 set aside on the basis that they were invalid or overly broad, he requested, pursuant to Rules 317 and 318 of the Federal Courts Rules, all material relied on to issue the Requirements. The Minister served a redacted certified record, and the Attorney General applied under s. 37 of the Canada Evidence Act for an order prohibiting disclosure of the redacted information on the grounds that this would be injurious to the public interest, supported by a certificate issued by the Director General of the International and Large Business Directorate baldly asserting that such disclosure could be used to circumvent ongoing audit operations.
After noting (at paras. 13-14) that, consistently with s. 2(b) of the Charter, “open and transparent judicial proceedings are fundamental principles of the Canadian legal system,” Noël J found that the Certificate was not adequate support for the s. 37 applications, stating (at paras 16, 20, and 22):
…[T]he Certificate … does not give me a sufficient evidentiary basis to conclude that the public interest claim is justified. …[A] section 38 notice is not sufficient in an application to make a determination on the validity of the claim.
Considering that at this stage in the proceeding, no one except for the Minister or the Applicant has viewed the substance of the information being protected, it would be “inconceivable” to render a decision of such importance without seeing the undisclosed information. …
Considering that the Certificate contains only generalized assertions, to be able to adequately assert its privilege, the Applicant should file with the Court on a confidential basis an un-redacted copy of the redacted documents that would relate to the public interest being claimed and any other documents or affidavits that may be appropriate to adequately support the validity of the alleged privilege. The Court will be obliged in this instance to conduct the hearing in an in-camera fashion in order to be able to deal with ex parte evidence and submissions.
However, Noël J also denied a motion to produce the Director General for cross-examination, finding (at paras. 26 and 33):
An application under section 37 is a discrete proceeding, separate from and only ancillary to the applications for judicial review of the Requirement. Thus, the Respondent does not have standing or a right to attend the section 37 hearing… .
…[A] certificate is not an affidavit, which usually in the optics of fairness, affords the adverse party the opportunity to cross-examine a witness on their submitted evidence. …
|Locations of other summaries||Wordcount|
|Tax Topics - Income Tax Act - Section 231.6 - Subsection 231.6(2)||Minister required to provide material in support of requirement||207|
|Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Paragraph 2(b)||sun light priciple applied to require review of CRA redactions||303|
Vanguard Coatings and Chemicals Ltd. v. MNR, 86 DTC 6342,  2 CTC 139 (FCTD)
The taxpayer's application for an order that the Minister be required to produce documents containing information contained from the taxpayer's competitors was dismissed. "There is no overriding issue of public interest in the present case justifying disclosure of information provided to the Minister in confidence."