CRA publishes new policy document regarding information gathering powers

The Canada Revenue Agency (the “CRA”) is granted significant powers to gather information from persons under the Income Tax Act (Canada) (the “ITA”) and the Excise Tax Act (Canada) the (“ETA”), including the right to acquire and inspect documentation, enter premises, and question persons. The decision as to whether, and how, to exercise these powers is generally guided by CRA policy. The CRA’s policy in respect of information gathering in the process of an audit has recently been updated.

On July 25, 2025, the CRA published an internal communiqué (AD-25-04) providing updated guidance on the use of its information gathering powers during compliance activities (the “New Policy Document”). The New Policy Document replaces the previous CRA communiqué on the subject, last modified in 2019 (the “Previous Policy Document”).

The New Policy Document reflects amendments to the ITA and ETA enacted since publication of the Previous Policy Document. However, it does not appear to reflect proposals regarding the information gathering provisions in the ITA and the ETA contained in the 2024 Federal Budget (which have not yet been enacted). It also does not contemplate the recent decision of the Federal Court in Canada (National Revenue) v. Shopify Inc., 2025 FC 969 regarding an “unnamed person requirement” pursuant to subsection 241.2(3) of the ITA and subsection 289(3) of the ETA, which was the subject of our previous blog post.

The New Policy Document is broader than the Previous Policy Document, which was largely concerned with the ability of the CRA to obtain certain “tax accrual working papers” (TAWPs). The remainder of this blog post outlines insights from a review of the New Policy Document.

Requests for information – response “in any form specified”

A CRA employee may request information pursuant to section 231.1 of the ITA or section 288 of the ETA (a “request for information”). Each section has been amended since the publication of the Previous Policy Document. Among other revisions, the amendments enhance the power of a CRA employee to compel a person to attend an interview for questioning, and provide a requirement to answer questions in writing “in any form specified”.

The New Policy Document provides examples of the form of response that may be specified by a CRA employee issuing a request for information. The non-exhaustive list includes electronic spreadsheets or tables, organizational charts and similar forms of presentations. To the extent such a request would involve the creation of a document, it is certainly debatable whether the wording of the legislation could support the making of the request.

Requirements for information – enumerated scenarios

The New Policy Document frames requests for information as a CRA official’s “primary powers” for acquiring information. This is likely because a request for information is accompanied by fewer procedural safeguards than those accompanying the information gathering powers provided in section 231.2 of the ITA and section 289 of the ETA (a “requirement for information”). The New Policy Document departs from the Previous Policy Document in that the issuance of a requirement for information is now generally limited by policy to the three following scenarios:

1. where desired information is held by a financial institution;
2. where desired information has been requested on behalf of a foreign jurisdiction; and
3. where desired information relates to “unnamed persons”.

CRA employees may issue requirements for information in other circumstances, but the employee is directed to consult CRA headquarters first.

Solicitor-client privilege not necessarily respected

It is stated that “CRA officials should not routinely seek information that is known to be subject to solicitor-client privilege or litigation privilege, but at the same time should be aware that claims of privilege are sometimes made in relation to information that is not actually privileged.  Where CRA officials suspect that a privilege claim may not be appropriate, DOJ should be consulted.”

Anecdotally, it is common for CRA officials to seek memorandums prepared by lawyers for which solicitor-client privilege may be asserted. If a taxpayer claims solicitor-client privilege applies, our experience suggests that CRA officials may initiate an arduous process investigating and scrutinizing the claim.

No extensions of time for responses

In respect of a request for information and a requirement for information, the New Policy Document states that CRA employees should not offer extensions of time to provide the information sought. Instead, the New Policy Document indicates a delay in commencing enforcement action may be considered in certain circumstances.

Proportionality

The New Policy Document provides that “CRA officials should exercise judgement when carrying out their audit and compliance activities and should generally seek the appropriate amount of information necessary to validate or establish the obligations or entitlements of a taxpayer or any other person under the ITA or the ETA.” In circumstances where a CRA employee seeks information that is not proportional to an ongoing audit, it may be helpful to refer the CRA official to this policy language.

Conclusion

The CRA wields considerable powers to collect information. However, these powers are not limitless. The extent of the powers is circumscribed by the provisions of the ITA and ETA. While the New Policy Document is helpful in anticipating how CRA officials might interpret and wield their powers, it is itself merely an interpretation of law, rather than a source of law. In situations where the meaning of the legislation is unclear, it is crucial to bear in mind that, it is the courts – not the CRA – who are ultimately responsible for resolving any disputes.