In Minister of National Revenue v Cameco Corporation,
the Federal Court of Appeal (FCA) dismissed the Minister of
National Revenue's appeal and held that the Canada Revenue
Agency's (CRA's) audit powers under the Income Tax
Act (ITA) do not extend to compelling taxpayers to be
subjected to oral questioning. We expect this judgment to have a
significant impact on the conduct of audits.
The CRA's Audit Powers
As was confirmed by the Supreme Court of Canada almost 30 years
ago in McKinlay Transport Ltd., the CRA's audit powers
are, generally speaking, quite broad. Taxpayers are required to
keep books and records at their places of business or residence,
and auditors may at any time "inspect, audit or examine"
them, under paragraph 231.1(1)(a). To that end, auditors may, at
all reasonable times, and for any purpose related to the
administration and enforcement of the ITA, enter businesses where
such books and records are kept and require taxpayers or their
agents to
