Tax & Trade Blog

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PRIVILEGE AT RISK IN CRA RFI PROCEEDINGS?

FEDERAL COURT DECLINES PRIVILEGE REVIEW & ORDERS PRODUCTION TO CRA

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As discussed in our review of Federal Court’s (“FC”) 2025 pair of decisions in Shopify here and here, the Canada Revenue Agency (“CRA”) has judicial means to compel information from taxpayers through Requests for Information (“RFI”). These powers are usually subject to important limits, including solicitor-client privilege.

However, a recent decision from the FC shows that asserting privilege may not be enough to protect documents from disclosure. In Canada v. KPMG Canada LLP, 2026 FC 793, the FC considered a compliance application under section 231.7 of the Income Tax Act (“ITA”) – for which a parallel mechanism exists under section 289.1 of the Excise Tax Act (“ETA”) – and granted an order compelling production of more than 900 documents over which privilege was asserted.

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CRA GST & INCOME TAX AUDITS

UNDERSTANDING A CRA AUDITOR'S POWERS & METHODS

As most people understand, “Audits” are the Canada Revenue Agency’s (CRA) primary tool for verifying voluntary compliance with Canada’s taxing legislation, including the Excise Tax Act (ETA) for GST purposes, and the Income Tax Act (ITA) for income tax obligations.

Less well known is the scope of the CRA’s powers when it comes to demanding answers to its questions and reviewing business records.  In this Tax Audits Series Report, we examine these broad powers, and what taxpayers can expect when audited.