Section 289.1

Subsection 289.1(1)

Cases

Canada (National Revenue) v. 2276230 Ontario Inc., 2021 FC 242

CRA requirement for information need not be demonstrated by it to be proportional to the matter at issue

CRA requested that the three Respondents provide certain business information (characterized by the Minister as information that should have been kept in ordinary business records that were required to be kept) pursuant to s. 288(1), and when many of the requests were either not answered at all or only partially by the last of the extended deadlines, the Minister initiated a summary application pursuant to s. 289.1, seeking an order for the missing information. At the time of this application, the Respondents had objected to assessments of prior taxation years.

Before granting the compliance order, Pentney J stated (at paras 18, 19, 29):

… I reject the Respondents’ argument that section 289.1 can only be invoked where a taxpayer has “refused” to provide the requested information… . [T]he provision states that a compliance order may be granted if the Court “is satisfied that (a) the person was required under section 288 or 289 to provide the… information or document and did not do so…” (emphasis added). …

… As noted in ... Cameco ... prior cooperation in an audit is not itself a valid defence to a compliance order (para 39), nor is ongoing litigation relating to other matters (para 41). In addition, the fact that the requests may involve substantial documentation which the taxpayer may view as not proportional to the matter is not a relevant consideration (para 42) …

In this case, there is no evidence to suggest that the CRA audit has been launched for any purpose other than to ensure compliance with the ETA, or that the request for information was so wide, extraordinary, or unusual as to give rise to questions about its legitimacy in the context of the audit (assuming that such a claim could be brought, in the face of the wide authority granted to the Minister to set the timing, scope, and nature of the audit … .

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.7 - Subsection 231.7(1) Cameco principles applied in granting compliance order 194

Subsection 289.1(3)

Cases

Canada (National Revenue) v. Edward Enterprise International Group Inc., 2020 FC 1044

refused addition to a disclosure compliance order of a condition that CRA give notice before disclosing the information to another authority

The Minister sought a compliance order under s. 289.1(1) to compel the respondent (“EEIGI”) to provide certain access, assistance, information and documentation sought by the Minister in connection with an audit (the “Required Information”). EEIGI took the position that the requested compliance order should include a condition that EEIGI be given notice before any of the Required Information was shared outside the CRA. It expressed a concern that “circumstances may arise in the future in which it may wish to assert arguments, based on statutory interpretation or Charter rights, to oppose sharing of the Required Information by CRA with other entities including other foreign entities“ (para. 29), and noted that it was involved in foreign legal proceedings.

In rejecting the addition of this condition, Southcott J stated (at paras. 34, 37):

… EEIGI is seeking this relief without having articulated with any precision a basis in either fact or law for its concern that it may in the future face dissemination of the Required Information in a manner that offends the Charter.

… [R]equiring CRA to disclose, in the course of an investigation, the fact that the investigation is taking place could compromise the investigation. EEIGI has identified no precedent or statutory authority for the imposition of such a requirement, other than the general discretion that s 289.1(3) of the ETA affords to the Court to impose, in an order issued under s 289.1(1), any conditions that the Court considers appropriate.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.7 - Subsection 231.7(3) no basis established for adding notice requirement to compliance order 186