The Supreme Court of Canada strikes down “accounting records” exception to solicitor-client privilege
On Friday, the SCC released its decisions in Canada (Attorney General) v Chambre des notaires du Québec, 2016 SCC 20 (“Notaires”) and Canada (National Revenue) v Thompson, 2016 SCC 21 (“Thompson”).
In Notaires, the CRA had issued demands for documents and information pursuant to subsection 231.2(1) of the Income Tax Act (Canada) (the “Act”) to a number of notaries in Québec. The demands were written so as to fall within the “accounting records” exception to solicitor-client privilege under the Act. The issue was whether that statutory exception infringed upon certain constitutional rights under the Canadian Charter of Rights and Freedoms.
The Supreme Court of Canada held that the “accounting records” exception, as it applied to lawyers and notaries, was unconstitutional. The SCC applied Notaires to the companion case of Thompson which involved demands made to an Alberta lawyer.
Notaires is the first major federal income tax decision released by the SCC in 2016 and represents an important confirmation of the constitutional limits to the administrative powers of the CRA under the Act.
A more fulsome discussion of the Notaires decision will be published to our blog in due course.