Mr. Speaker, with respect to the above noted question, what follows is the response from the Canada Revenue Agency, CRA, as of October 16, 2023, the date of the question.
It is important to note that while the CRA strives to provide as fulsome a response as possible, the confidentiality provisions of the acts it administers prevent the CRA from commenting or disclosing taxpayer information.
The CRA has a range of tools to ensure compliance with tax laws and to maintain the integrity of Canada's self-assessment tax system. One of the tools the CRA sometimes uses to address non-compliance and verify reported income is the unnamed persons requirement, UPR. This type of requirement is authorized by the courts and enables the CRA to obtain information from an individual or a company about third parties, whether unnamed person or persons. Additional information on the UPR is provided in the responses below.
With regard to part (a), the CRA did not receive any directive from the Minister of National Revenue to seek information about Canadian businesses from independent online service providers.
Part (b) is not applicable. Please see part (c).
With regard to part (c), as noted in the preamble to this response, the CRA uses various tools to ensure compliance with tax laws and maintain the integrity of Canada's self-assessment tax system.
The CRA only seeks information from third parties in order to verify tax compliance when there is a need for that information in support of the CRA’s mandate. The UPR is one of the tools used to gather information in support of the CRA’s efforts to verify income reported by taxpayers and to ensure they have satisfied their filing obligations under the acts administered by the CRA.
With regard to part (d), the CRA collects information where it is lawful and directly related to compliance activities. Information collected through the UPR process is managed and protected according to the CRA’s standard practices to protect the privacy of personal information.
With regard to part (e), in its tracking system of privacy breaches, the CRA has no records that pertain to the CRA seeking sensitive information about Canadian businesses from independent online service providers without particular suspicion of non-compliance or confirmed tax obligations.
With regard to part (f), the Minister of National Revenue has not issued any directive to obtain over six years of personal information about Canadian businesses from independent online service providers.
With regard to parts (g) and (h), a UPR is a legal document issued by the CRA under subsection 231.2(3) of the Income Tax Act, ITA, requiring a person to provide information regarding a third party person or third party persons who is or are not identified in the authorization. In order to issue a UPR, the CRA must seek judicial authorization from the Federal Court of Canada, FC. The FC will only authorize a UPR if that person or group is ascertainable and the UPR is being issued to verify compliance by the person or persons in the group who have tax obligations under the acts administered by the CRA.
Legislation, such as the Privacy Act and section 241 of the Income Tax Act, governs how information collected through the UPR process is managed. CRA policies and standard practices also protect the privacy of personal information. The CRA collects information when it is lawful and directly related to compliance activities.
In particular, when the CRA collects information through a UPR, the CRA will use the information in accordance with the FC order that authorizes the issuance of the UPR, and in accordance with the relevant provisions of the ITA. The CRA generally uses the information obtained through the UPRs to identify taxpayers who may have failed to comply with their obligations under the ITA and other acts administered by the CRA.