Access to Information: CRA Need Not Disclose

Although section 241 generally protects the privacy of taxpayer information, paragraph 241(3)(b) allows the CRA to disclose information in respect of legal proceedings relating to tax administration and enforcement. Nonetheless, in Bradwick Property Management Services Inc. v. Canada (National Revenue) (2019 FC 289), the FC held that such disclosure is not a requirement; the CRA still has discretion over whether to release the information. Questions remain as to whether this decision is consistent with the SCC decision in Slattery (Trustee of) v. Slattery ([1993] 3 SCR 430).

In Bradwick Property, the taxpayer filed notices of objection to reassessments issued by the CRA disallowing certain deductions for accounting services. It also filed 11 requests under the Access to Information Act seeking information provided to the CRA by the taxpayer's accountant in respect of the reassessments. The documents disclosed by the CRA contained redactions, so the taxpayer brought an application for judicial review of the CRA's redactions.

The FC held that paragraph 241(3)(b) applied to the taxpayer's requests, since the requests were in respect of notices of objection that were related to the administration or enforcement. This is in contrast to Scott Slipp Nissan Ltd. v. Canada (Attorney General) (2005 FC 1477), where the FC found that a notice of objection was not the type of "proceeding" contemplated by subsection 295(4) of the Excise Tax Act (a provision nearly identical to subsection 241(3) of the ITA). Bradwick Property's broader application of the exception in paragraph 241(3)(b) allows taxpayers to access information at an earlier stage in the dispute resolution process, and may allow them to avoid a trial as a result.

Despite finding that paragraph 241(3)(b) applied, and therefore that the CRA was authorized to disclose the information, the FC went on to say that the CRA still maintained limited discretion to release (or withhold) confidential information. This was based on paragraphs 241(4)(a) and (b), which state that the CRA "may" disclose to any person any taxpayer information in the specific circumstances set out there. The FC held that the redacted information was not necessary to the administration or enforcement of the ITA, or for determining taxes owed by the taxpayer. Thus, it did not order the CRA to disclose the information.

The FC's finding that the CRA had discretion in deciding whether to release (or withhold) taxpayer information, after it had already decided that paragraph 241(3)(b) authorized its disclosure, is hard to reconcile not only with section 241 when read as a whole, but also with the SCC's decision in Slattery. It seems logical that if Parliament wanted the CRA to have such discretion in the circumstances enumerated under paragraphs 241(3)(a) and (b), it would have included those circumstances under subsection 241(4).

Paige Donnelly
Dentons Canada LLP, Toronto

Canadian Tax Focus
Volume 9, Number 2, May 2019
©2019, Canadian Tax Foundation