Confidentiality Principles and CRA Requirements

In Canada (National Revenue) v. KPMG LLP (2016 FC 1322) Chief Justice Crampton of the Federal Court refused a motion by the accounting firm KPMG to vary an order from Federal Court Justice Noël (which had been  granted on an ex parte basis, meaning that KPMG was not notified and were not present) requiring them to disclose information relating to unnamed clients.

KPMG sought a variance of that order because (1) Rule 208 of their Code of Professional Conduct (of the Chartered Professional Accountants of Ontario) prohibited them from the disclosure and (2) the subsection authorizing these requirements was amended shortly after the order was imposed.

Crampton CJ dealt with (1) by noting that the statute was clear and that Rule 208 permitted disclosure under a valid court order and dealt with (2) by simply pointing out the law was validly enacted by Parliament.

Issues of whether the material to be disclosed was subject to solicitor-client privilege would be dealt with, as the statute provides, at the time of compliance.

This was not a difficult decision but is another helpful reminder that the robust use of solicitor-client privilege is the way to prevent your tax planning from being disclosed willy-nilly in a CRA fishing expedition.

Written by Craig Burley

Craig is a tax lawyer in private practice in Hamilton, Ontario. Call Craig at (905) 296-3378 to discuss issues that you think may need independent tax advice. In addition to tax, Craig writes and works publicly on a number of other issues related to law, justice, and public affairs.