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CRA INFORMATION REQUESTS - SHOPIFY 1

FEDERAL COURT DISMISSES CRA UNNAMED PERSON REQUIREMENT IN SHOPIFY 1

Among the most important decisions for GST/HST practitioners in 2025 were two Federal Court rulings dismissing applications by the Canada Revenue Agency (“CRA”) for unnamed persons requirements (“UPRs”) – a type of information demand in respect of an ascertainable group of unnamed persons that requires Court authorization – directed to Shopify Inc. (“Shopify”).

Below, we review the first of these two Federal Court decisions (Canada v. Shopify Inc., 2025 FC 968 – “Shopify 1”), in which the CRA’s UPR was found not to have the required purpose of verifying compliance with a duty or obligation under Canadian tax law.

For our review of the second Shopify decision, click here.

Background

On the facts in Shopify 1, the Minister of National Revenue sought a UPR requiring Shopify to provide information about merchants who had customers with Australian billing addresses. The request was made on behalf of the Australian Taxation Office (“ATO”) which believed that some Canadian Shopify vendors had made sufficient sales to Australian consumers to fall within Australia’s GST regime.

The request was based on the Convention on Mutual Administrative Assistance in Tax Matters (the “Convention”), an international agreement to which Canada and Australia were parties that allowed their tax authorities to share information for compliance purposes.

Under subsection 231.2(3) of the ITA (and parallel subsection 289(3) of the ETA), UPRs must be approved by the Federal Court, and will only be granted where two conditions are met:

1. Ascertainable Target Group: The target group of the request is “ascertainable”; and
2. Compliance with the ITA (or ETA): The purpose of the UPR is to verify compliance with any duty or obligation under the Act.

The key issue before the Court was whether the UPR was made to verify compliance with a duty or obligation under the ITA.

Federal Court Decision

The Federal Court determined that while the ITA allowed for requests for information in respect of named persons under subsection 231.2(1) (i.e., so-called Named Person Requirements – “NPRs”) to be made for the administration of listed international agreements (e.g., the Convention), the wording of subsection 231.2(3) was narrower. The Court held that on its plain meaning, subsection 231.2(3) did not implement agreements like the Convention and that accordingly, a UPR made primarily to assist the ATO in enforcing Australian GST laws had to be dismissed.

The Court noted, however, that had the UPR been directed at verifying compliance with a duty or obligation under the ITA, the request would have been authorized as the target group of merchants in this case was “ascertainable”.

Takeaways

The two Federal Court Shopify decisions mark a departure from earlier cases where Courts have generally treated the statutory requirements for UPRs (under the ITA and ETA) as easily met.

That said, with both decisions currently under appeal, it remains to be seen whether the Court’s restrictive interpretation of the CRA’s UPR powers will stand – and whether Parliament may move to expand those powers through legislation.

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