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ARTICLE · 01 JULY 2016

Solicitor-Client Privilege: Accounting Records Exception In Income Tax Act Unconstitutional

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Two recent decisions by the Supreme Court of Canada considered demands for information made to lawyers and notaries issued by the Canada Revenue Agency (CRA).

CanadaTax
James G. Morand
James G. Morand
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Two recent decisions by the Supreme Court of Canada1 considered demands for information made to lawyers and notaries issued by the Canada Revenue Agency (CRA). Information that is subject to "solicitor-client privilege" is excluded from such demand. However, specifically excluded under the Income Tax Act (Canada) (the Tax Act) from the scope of solicitor-client privilege is an "accounting record of a lawyer."  The exclusion would thereby authorize the CRA to demand accounting records of a lawyer.

These recent decisions confirmed that the Tax Act exclusion of accounting records from the scope of information protected by solicitor-client privilege is contrary to the unreasonable search and seizure provisions of section 8 of the Charter and consequently lawyers and notaries do not have to comply with such requests from the CRA.

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