3412229 Canada Inc. v. Canada (Revenue Agency)

3412229 Canada Inc. v. Canada (Revenue Agency)
Court (s) Database
Federal Court Decisions
Date
2020-12-16
Neutral citation
2020 FC 1156
File numbers
T-902-13
Decision Content
Date: 20201216
Docket: T-902-13
Citation: 2020 FC 1156
Ottawa, Ontario, December 16, 2020
PRESENT: The Honourable Mr. Justice Bell
Docket: T-902-13
BETWEEN:
3412229 CANADA INC.
3421848 CANADA INC.
3488055 CANADA INC.
3488063 CANADA INC.
2534-2825 QUEBEC INC.
4077211 CANADA INC.
Applicants
and
CANADA REVENUE AGENCY
Respondent
and
THE INFORMATION COMMISSIONER OF CANADA
Third Party
JUDGMENT AND REASONS
I. Nature of the Matter
[1] Between 2006 and 2012 the Canada Revenue Agency [CRA] conducted an audit, pursuant to the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) [ITA], of the Applicants’ investments in St. Lawrence Trading Inc. [SLT], an offshore investment company. The Applicants are all numbered companies belonging to Mr. Irving Ludmer or his family members. Mr. Ludmer is the controlling shareholder of each of the Applicants.
[2] During and following the tax audit, the Applicants requested information pursuant to s. 6 of the Access to Information Act, R.S.C. 1985, c. A-1 [ATIA]. The CRA disclosed a large number of the requested documents to the Applicants; however, it claimed exemptions over others. The Applicants made numerous complaints pursuant to the ATIA to the Office of the Information Commissioner [OIC]. The Applicants, pursuant to s. 41 of the ATIA, seek judicial review of CRA’s decision to exempt certain documents from disclosure. All applications have been consolidated under this court file number (T-902-13).
[3] To put matters in perspective I would point out the following regarding the efforts undertaken by the Applicants to gain access to records via access to information requests [ATIP Requests] and, by the Respondent to provide access. By April 30, 2014, the Respondent had located 19,212 pages and disclosed 10,815 of them to the Applicants. Additional disclosures made in the summer of 2014 resulted in the disclosure of more than 3000 additional documents. As at the present time the Respondent has identified 38,090 pages of documents responsive to the various access requests and has identified 8,041 pages that remain partially or fully exempt from disclosure.
[4] The Applicants seek orders from this Court granting the applications for judicial review, directing the CRA to conduct further investigation of its records in an effort to obtain additional documentation and awarding costs, payable to them, on a solicitor-client basis.
[5] For the reasons set out herein, I dismiss the applications for judicial review, decline the invitation to direct the CRA to conduct further investigation of its records and, consequentially, refuse to award costs to the Applicants.
II. Facts and Decisions Under Review
A. The Governmental Players
[6] For the next 79 paragraphs, I outline the facts almost entirely as set out in the affidavit of Mr. Mark Fidanza, dated August 9, 2019. I rely extensively upon Mr. Fidanza’s affidavit, without apology, since both parties acknowledged the accuracy of his summary of the facts. I also find his affidavit methodically and chronologically sets out the procedural steps undertaken by the Applicants and the CRA.
[7] Employees from the CRA, the Department of Finance and the Department of Justice were involved in the audit. The audit was carried out by the Audit Division of the Montreal Tax Services Office, whose employees included the following:
Montreal Tax Services Office — Audit Division
Joseph Armanious
Bernard Benedetti
Patrice Chouinard
Daniel Gariepy
Hubert Dubois
Marie-Josée Laporte
Pierre Leduc
Joe Oliverio
Ginette Phisel
[8] The role of the Income Tax Rulings Directorate [Rulings], a division within the Legislative Policy and Regulatory Affairs Branch, is to establish CRA’s interpretation of the ITA and the Income Tax Regulations, C.R.C., c. 945. During the audit, employees of Rulings provided income tax rulings and technical interpretations on various tax provisions and engaged in frequent discussions with the auditors. Those employees are listed below:
Income Tax Rulings Directorate
Wayne Adams
Roberta Albert
Annemarie Humenuk (later Department of Finance)
Phil Jolie
Olli Laurikainen
Mark Symes
Claude Tremblay
Sherry Thomson
[9] The Aggressive Tax Planning Division, a division within the Compliance Programs Branch of CRA, which specializes in complex tax avoidance issues, provided technical assistance to the auditors and was involved in several aspects of the audit. Those employees were:
Aggressive Tax Planning Division
Stéphane Charette
Nicole Cliche
Lynda Gibson
Patrice Mallet
François Ranger
Minh-Thi Truong
[10] By operation of various tax conventions and agreements, employees of the Competent Authority Services Division [CASD], a division within the Compliance Programs Branch of CRA, communicated with foreign tax authorities during the audit. Those employees were:
Competent Authority Services Division
Joanne Gagné-Pratt
Manon Helie
Anne Leroy
Luc Rochefort
Joanne O'Neill
Sue Murray
[11] Members of the Access to Information and Privacy Directorate [ATIP Directorate], both at the Montreal Tax Services Office and at CRA Headquarters, were involved in the ATIP Requests and the investigations of the Applicants’ complaints before the OIC. They were:
ATIP Directorate
Kimberly Ayres
Mark Fidanza
Marie-Claude Juneau
Alain Lacoste
Marie-Hélène Lebel
Danielle Paquette
Gilles Vallée
[12] CRA’s Appeals Branch was in charge of the Applicants’ objections to their tax assessments and appeals to the Tax Court of Canada following the issuance of the reassessments. Employees within that branch who figured in the various ATIP Requests were:
Appeals Branch
Suzanne Albert
Chantal Faubert
[13] The CRA consulted with employees within the Department of Finance during the audit concerning the application of various tax provisions and questions of tax policy. Those employees were:
Finance
Annemarie Humenuk (formerly of Rulings)
Grant Nash
Ed Short
Tobias Witteveen
[14] The CRA sought legal advice or legal representation from the Department of Justice on various occasions during the period covered by the ATIP Requests, or referred to legal opinions delivered to CRA, prior to those requests. The names of Department of Justice counsel who appear in the records are set out below:
CRA Legal Services
Litigation counsel
Office of the
Assistant Deputy
Attorney General
John Bentley
Maria Bittichesu
Deborah Horowitz
Jake Blair
Ian Demers
Anick Pelletier
Caroline Coderre
Philippe Dupuis
Sandra Phillips
Patrick Dornier
Richard Gobeil
En blanc
Jeanette Ettel
Henry Gluch
En blanc
Amy Garson
Yanück Houle
En blanc
Benoît Gravel
Guy Laperrière
En blanc
Heather Hemphill
Sophie-Lyne Lefebvre
En blanc
Alan Jane
Marie-Andrée Legault
En blanc
Deen Olsen
Marie Marmet
En blanc
Shauna Pittman
Valerie Messore
En blanc
En blanc
Margaret Nott
En blanc
En blanc
Simon Petit
En blanc
En blanc
Susan Shaughnessy
En blanc
En blanc
Tamara Thermitus
En blanc
[15] Some of the above-mentioned employees of CRA, the Department of Finance, and the Department of Justice participated in the GAAR Committee, which considers and approves reassessments invoking the General Anti-Avoidance Rule (s. 254 of the ITA).
B. Chronology of ATIP Requests, Responses and Court Applications
[16] The Applicants filed their first access to information requests [Initial Requests] on August 19, 2009. Gilles Vallée, a senior consultant in the ATIP Directorate, was in charge of these requests until his departure from the CRA in 2011.
[17] In their Initial Requests, the Applicants sought information concerning the ongoing audit by the CRA of their investments in SLT. They formulated the requests as follows:
All records, documents, correspondence, memoranda, forms, directives, reports, notes, opinions, working papers, and any other documentary
material, including drafts, etc., regardless of physical form and characteristics, relating to the taxation years ending on […], including, without restricting the generality of the foregoing, all Reports T20, Reports T2020, auditor’s working papers, internal correspondence, notes of meetings and conversations between and with Canada Revenue Agency personnel, memoranda copies of cases, interpretation bulletins, internal directives, communiqués, branch letters, and parts of operations manuals relating to and/or relied upon or considered by the Canada Revenue
Agency in the course of its deliberations in respect of 2005, 2006 and 2007 taxation years.
In addition, and without restricting the generality of the foregoing, all record, documents, correspondence, memoranda, forms, directives, reports, notes, opinions, working papers, and any other documentary material, including drafts, etc. regardless of physical form and characteristics, relating to or including any reference to any of the following:
Irving Ludmer and St. Lawrence Trading Inc.
ii. The application of section 94.1 of the Income Tax Act to an investment in St. Lawrence Trading Inc.
iii. The application of proposed section 94.1, commonly referred to as the "foreign investment entity" rules or "FIE" rules, to an investment in St. Lawrence Trading Inc.
iv. The application of subsection 12(3) and subsection 12(9) of the ITA or section 7000 of the Income Tax Regulations to an investment in St. Lawrence Trading Inc.
[18] The ATIP Directorate determined the Office of Primary Interest for the Initial Requests to be the Audit Division of the Montreal Tax Services Office. The Office of Primary Interest is the branch or department of the CRA where it believes records, responsive to an access to information request, are located. CRA considered Ginette Phisel, Pierre Leduc and Joseph Armanious, of the Montreal Tax Service Office, being the team of auditors leading the audit, to be the subject matter experts. As a result, the ATIP Directorate sent a request to the Audit Division in Montreal to obtain all records in response to the Initial Requests.
[19] The CRA made its initial disclosure, in response to the Initial Requests, on January 28, 2010. On February 18, 2010, the Applicants filed a complaint with the OIC in relation to this disclosure of records. The OIC began its investigation of this complaint in March 2010.
[20] Beginning in March 2011, the CRA assigned Mr. Fidanza as the person in charge of processing the Applicants' subsequent ATIP Requests. Following Gilles Vallée’s departure from CRA in July 2011, the CRA assigned Mr. Fidanza to assist the ATIP Directorate during the OIC’s investigation of the complaint regarding the Initial Requests.
[21] On February 18, 2011, the Applicants filed new access to information requests [First Updated Requests], which sought to obtain the same information mentioned in paragraph 17 “to the extent that such material have been gathered, received, produced, or added to” the Applicants’ file since August 19, 2009.
[22] As with the Initial Requests, the ATIP Directorate of the CRA identified the Audit Division of the Montreal Tax Services Office as the Office of Primary Interest for the First Updated Requests. The ATIP Directorate forwarded a request to the Montreal Audit Division for all records responsive to the First Updated Requests. The ATIP Directorate tasked no other branches or individuals within CRA with that responsibility at that time. When asked whether other branches should be so tasked, the auditors advised the ATIP Directorate that that was not necessary, since all relevant records would be in the possession of the Montreal Audit Division.
[23] On June 23, 2011, the Applicants filed new requests for access to information [Second Updated Requests], which sought to obtain similar information but designed to cover records created subsequent to the previous requests.
[24] The ATIP Directorate again identified the Audit Division of the Montreal Tax Services Office as the Office of Primary Interest for the Second Updated Requests, and requested that office provide all records responsive to the requests. At that time, the ATIP Directorate did not task any other departments or individuals within the CRA with that responsibility.
[25] The initial disclosure in response to the First Updated Requests, was communicated to the Applicants on September 26, 2011, and the initial disclosure in response to the Second Updated Requests was communicated to the Applicants on October 7, 2011. On November 16, 2011, the Applicants filed complaints with the OIC in relation to the disclosures of records in response to both of those requests.
[26] At the core of the Applicants’ complaints regarding the Initial Requests, First Updated Requests and Second Updated Requests was a collection of documents known as the master file, which concerned the ongoing audit of the Applicants as well as several other investors in SLT. The documents from the master file had been exempted pursuant to s. 16(1)(c) of the ATIA due to the ongoing audit. Other exemptions were also applied to those records.
[27] Beginning in December 2011, the OIC conducted its investigation of the Applicants’ complaints related to the First Updated Requests and Second Updated Requests along with its ongoing investigation concerning the Initial Requests. During the course of the investigation, the ATIP Directorate and the subject matter experts from the Audit Division responded to several questions, made representations to the OIC, and met with OIC investigators to explain and clarify the context in which the records were being exempted from disclosure.
[28] Prior to 2011, the ATIP Directorate in the Montreal Tax Services Office processed records manually by applying redactions by hand onto paper copies of documents, which were paginated manually. In early 2011, the Directorate acquired software, which enabled it to scan and paginate records electronically.
[29] On February 2, 2011, the OIC requested, for the first time, a scanned and paginated electronic copy of the documents contained in the master file. The ATIP Directorate provided this electronic copy to the OIC in May 2011. Over the following months, the ATIP Directorate continued to collaborate with the OIC as it proceeded with its investigation of the Applicants’ complaints.
[30] On March 1, 2012, the CRA made a supplementary disclosure pursuant to the Initial Requests, which included many of the documents contained in the master file. Those records had been disclosed to the Applicants by the auditors in charge, pursuant to s. 241(4)(b) of the ITA.
[31] As the audit of the SLT investors came to an end in May 2012, further records were disclosed. The CRA made two (2) supplementary disclosures to the Applicants pursuant to the Initial Requests on May 1, 2012 and July 23, 2012. The documents from the master file were released, subject to exemptions applied pursuant to sections 16(1)(b), 19(1), 20(1)(b), 21(1)(a), 21(1)(b), 23 and 24(1) of the ATIA. Since the audit had then concluded, the CRA no longer relied upon the exemption claimed pursuant to s. 16(1)(c) of the ITA.
[32] On May 1, 2012, following its investigation, the OIC issued a report in relation to the complaint on the Initial Requests. The report found that the complaint was well founded, since the CRA had failed to provide the Applicants with all responsive records in its initial response on January 28, 2010. However, the OIC found that in view of the supplementary disclosures, the complaint was now resolved and all remaining exemptions had been properly applied.
[33] On June 8, 2012, the Applicants filed a notice of application in this Court concerning the responses to the Initial Requests (T-1105-12). The Applicants discontinued that application on July 31, 2012.
[34] With regard to the First Updated Requests and Second Updated Requests, the CRA made several supplementary disclosures to the Applicants between September 2012 and March 2013, subject to exemptions applied pursuant to sections 16(1)(b), 19(1), 21(1)(a), 21(1)(b), 23 and 24(1) of the ATIA. Since the audit had then concluded, the CRA no longer relied upon the exemption pursuant to s. 16(1)(c). Disclosures were also made further to ongoing discussions between the CRA and the OIC regarding the applicability of various exemptions.
[35] On March 28, 2013, following its investigations, the OIC issued two (2) reports
in relation to the complaints on the First Updated Requests and Second Updated Requests.
[36] Regarding the First Updated Requests, the OIC found, inter alia, that:
The Applicants’ complaint had been “well-founded”, but was now “resolved” in light of the supplementary disclosures made by the CRA during the course of the OIC’s investigation;
The CRA had been “authorized to withhold most of the requested information, at the time of its decision of September 26, 2011, pursuant to paragraph 16(1)(c) and subsection 24(1) of the Act.” Those documents were contained in the audit “master file”;
Pursuant to its duty to assist, the CRA had now provided the requestors with “all the information which, as of March 2013, would no longer fall within the scope of the exemptions invoked by the CRA in response to [their] requests”;
Further to its review of the records, the OIC was satisfied that the CRA had properly applied the remaining exemptions to the responsive records pursuant to sections 13(1)(a), 16(1)(b), 19(1), 21(l)(a), 21(1)(b), 23 and 24(1) of the ATIA.
[37] Regarding the Second Updated Requests, the OIC made, inter alia, the following conclusions:
The Applicants’ complaint had been “well founded” but was now “resolved” in light of the supplementary disclosures made by the CRA during the course of the OIC’s investigation;
The CRA had been “authorized to withhold most of the requested
information, at the time of its decision of October 7, 2011, pursuant to paragraph 16(1)(c) and subsection 24(1) of the Act.” Those documents were contained in the audit “master file”;
Pursuant to its duty to assist, the CRA had now provided the requestors with “all the information which, as of March 2013, would no longer fall within the scope of the exemptions invoked by the CRA in response to [their] requests”;
Further to its review of the records, the OIC was satisfied that the CRA had properly applied the remaining exemptions to the responsive records pursuant to sections 13(1)(a), 19(1), 21(1)(a), 21(l)(b), 23 and 24(1) of the ATIA.
[38] On May 21, 2013, the Applicants filed notices of application (T-904-13 and T-902-13) concerning the First Updated Requests and Second Updated Requests.
[39] On July 31, 2012, the Applicants filed updated requests [Third Updated Requests] which sought to obtain similar information as in the previous requests but which was designed to cover records created subsequent to the previous requests.
[40] The ATIP Directorate of the CRA once again identified the Audit Division of the Montreal Tax Services Office as the Office of Primary Interest for the Third Updated Requests. The ATIP Directorate, once again, did not task any other departments or individuals within CRA to seek records responsive to those requests.
[41] The CRA communicated its initial disclosure in response to the Third Updated Requests to the Applicants on November 30, 2012. On December 6, 2012, the Applicants filed a complaint with the OIC in relation to this disclosure. The Applicants identified seven (7) specific pages, which they asked the OIC to review on a priority basis. Given that the Applicants severed the seven (7) pages from the remainder of the complaint, the OIC treated the complaint in relation to the Third Updated Requests as two (2) complaints.
[42] During the course of the OIC’s investigation of the exemption complaints on the Third Updated Requests, the CRA made three (3) supplementary disclosures on January 7, 2013, June 25, 2013 and July 9, 2013. The CRA made those disclosures further to ongoing discussions between the CRA and the OIC regarding the applicability of various exemptions.
[43]
On April 29, 2013, following its investigation, the OIC issued a report regarding the complaint on the seven (7) pages reviewed on a priority basis in the Third Updated Requests. The report found that the Applicants’ complaint was not well-founded, since the CRA had been “authorized to withhold the information at issue” having properly applied exemptions pursuant to sections 21(1)(a), 21(l)(b) and 24(1) of the ATIA.
[44] On July 11, 2013, following its investigation, the OIC issued a report on the remaining records released pursuant to the Third Updated Requests. The report states, inter alia, that:
The Applicants’ complaint had been well-founded, but it was now “resolved without the need to make recommendations to the head of the institution” in light of the supplementary disclosures made by the CRA during the course of the OIC’s investigation;
The CRA “met its duty to assist by providing [the requestors] with an interim disclosure, keeping [them] informed and providing [them] with the final and complete release in accordance with the Act”;
Further to its review of the records, the OIC was satisfied that the CRA had properly applied the remaining exemptions to the responsive records pursuant to sections 16(1)(b), 19(1), 21(1)(b), 23 and 24(1) of the ATIA.
[45] On May 21, 2013, the Applicants filed a notice of application (T-903-13) concerning the seven (7) pages identified in the Third Updated Requests. On July 26, 2013, the Applicants filed another notice of application (T-1289-13) concerning the remaining pages of the Third Updated Requests.
[46] On December 11, 2012, the Applicants filed updated requests [Fourth Updated Requests], which sought to obtain information similar to that previously sought but designed to cover records created subsequent to the previous requests.
[47] The ATIP Directorate of the CRA once again identified the Audit Division of the Montreal Tax Services Office as the Office of Primary Interest for the Fourth Updated Requests. The ATIP Directorate did not task any other departments or individuals within the CRA to seek records responsive to those requests.
[48] The CRA communicated the disclosures in response to the Fourth Updated Requests to the Applicants on February 1 and February 6, 2013. On March 19, 2013, the Applicants filed a complaint with the OIC in relation to this disclosure.
[49] During the course of the OIC’s investigation of the exemption complaints on the Fourth Updated Requests, the CRA made a supplementary disclosure on June 19, 2013. This additional disclosure was made further to ongoing discussions between the CRA and the OIC regarding the applicability of various exemptions.
[50] On July 3, 2013, following its investigation, the OIC issued a report in relation to the complaint on the Fourth Updated Requests. The report found, inter alia, that:
The Applicants’ complaint had been well-founded, but that the requestors “have now received all of the information to which [they] are entitled under the Act.” Thus, the complaint was “resolved without the need to make recommendations to the head of the institution”.
Further to its review of the records, the OIC was satisfied that the CRA had properly applied the remaining exemptions on the responsive records pursuant to sections 13(1)(a), 21(1)(b), 23 and 24(1) of the ATIA.
[51] On July 26, 2013, the Applicants filed a notice of application in this Court (T-1290-13) concerning the Fourth Updated Requests.
[52] On November 29, 2012, the Applicants filed access to information requests in relation to a request for information sent by the CRA’s Competent Authority Services Division [CASD] to the Bermuda tax authorities in September 2012 [Bermuda Requests]. The Applicants sought the following information:
All records, documents, correspondence (including all electronic mail), memoranda, forms, directives, reports, notes, opinions, working papers, and any other documentary material, including drafts, etc., regardless of physical form and characteristics, relating to an information request sent by Ms. Sue Murray, Director, Competent Authority Services Division, International and Large Business Directorate, Compliance Branch, Canada Revenue Agency (the “CRA”) to the Honourable Paula A. Cox, JP, MP, Minister of Finance of Bermuda (the “Minister”), pursuant to the Tax Information Exchange Agreement between the Government of Canada and the Government of Bermuda (the “Request”).
The Request, sent during or before September 2012, was in respect of a criminal tax matter pertaining to the shareholders of St. Lawrence Trading Inc. (“SLT”).[…]
The CRA requested that the Minister obtain the following information from Harbour Fiduciary Services Limited (“Harbour”), the administrator of SLT:
Shareholder names and addresses of SLT including the ultimate beneficial owner of the shares;
Director names and addresses of SLT;
Officer names and addresses of SL T;
Financial statements of SLT, for the years January 1st 2008 to December 31st 2011.
[53] The ATIP Directorate determined that the Office of Primary Interest for the Bermuda Requests was the Compliance Program Branch, more specifically the CASD, which is responsible for the exchange of information with foreign jurisdictions pursuant to tax conventions and tax information exchange agreements. Accordingly, the ATIP Directorate sent a request to the Compliance Program Branch to obtain all records in response to the Bermuda Requests.
[54] The CRA communicated the initial disclosure in response to the Bermuda Requests to the Applicants on January 30, 2013. On February 12, 2013, the Applicants filed a complaint with the OIC with respect to this disclosure of records.
[55] During the course of the OIC’s investigation of the exemption complaints on the Bermuda Requests, the CRA made a supplementary disclosure of records on May 13, 2013. This disclosure was made further to ongoing discussions between the CRA and the OIC regarding the applicability of various exemptions.
[56] On July 25, 2013, following its investigation, the OIC issued a report in relation to the complaint on the Bermuda Requests. The report found, inter alia, that:
The Applicants’ complaint had been well-founded, but following the release of additional records, was now “resolved without having made recommendations to the head of the institution”;
The CRA “was authorized to withhold most of the requested information pursuant to the exemptions claimed”;
The CRA had “carried out its duty to assist” and “made reasonable efforts to obtain consent to release information received from a foreign government”;
The OIC concluded that the CRA had properly applied the remaining exemptions to the responsive records, pursuant to sections 13(1)(a), 19(1), 23 and 24(1) of the ATIA.
[57] On August 5, 2013, the Applicants filed a notice of application in this Court (T-1324-13) concerning the Bermuda Requests.
[58] On August 23, 2013, the Applicants’ attorneys sent a letter to the Department of Justice counsel representing the CRA in the present applications. The letter stated, among other things, that the records received from the CRA in response to the Applicants’ ATIP Requests did not appear to include correspondence originating from employees other than those from the Montreal Tax Services Office, despite the fact that other divisions of the CRA had been involved in the audit. The Applicants requested “disclosure of files and/or documents from Headquarters, Rulings and CASD that were omitted in previous responses to the access requests.” The ATIP Directorate of the CRA treated this correspondence as a new ATIP request [Missing Records Request].
[59] On September 13, 2013, the ATIP Directorate tasked two (2) additional divisions, whose offices are located at CRA Headquarters, to assist in responding to the Missing Records Request. Those divisions were the Legislative Policy and Regulatory Affairs Branch, of which the Income Tax Rulings Directorate [Rulings] is a part, and the Compliance Program Branch, of which the Aggressive Tax Planning Division and the CASD are parts. These divisions were tasked with the responsibility of producing all existing records responsive to the ATIP Requests up to December 31, 2012, the date of the last request made by the Applicants.
[60] In October 2013, the ATIP Directorate received and processed records from the above-mentioned offices. The CRA communicated an initial disclosure of records arising from this request to the Applicants on November 8, 2013, following which it continued to search for additional records.
[61] In November 2013, the ATIP Directorate sent requests to the following additional branches of CRA for records responsive to the Missing Records Request. These branches were asked to produce all existing records in relation to the ATIP Requests up to December 31, 2012:
Division of CRA
Date records received
Appeals Branch
November 25, 2013
Assessment and Benefits Branch
November 18, 2013
Audit, Evaluation, and Risk Branch
No relevant records found
Finance and Administration Branch
November 15, 2013
Human Resources Branch
No relevant records found
Information Technology Branch
No relevant records found
Legal Services
No relevant records found
Public Affairs Branch
November 26, 2013
Strategy and Integration Branch
No relevant records found
Taxpayer Services and Debt Management
November 19, 2013
Office of the Commissioner
No relevant records found
Office of the Minister
No relevant records found
Montreal Tax Services Office:
Special Investigation, Collections and
Appeals Division
November 26, 2013
[62] As a result of receiving records from some of the above divisions, the CRA communicated additional disclosures to the Applicants on November 21, 2013, November 29, 2013, December 16, 2013 and January 15, 2014.
[63] On January 7, 2014, the Applicants filed a complaint in relation to the abovementioned disclosures of records, asking the OIC to “investigat[e] the exemptions applied by the CRA” and asking, “whether or not the CRA has reviewed all relevant documents in replying to the access to information requests.” The OIC treated this request as two (2) separate complaints filed by the
Applicants: a “missing records” complaint and a complaint regarding the exemptions applied to the records disclosed since November 2013.
[64] On January 23, 2014, the Applicants’ attorneys sent a letter to CRA’s legal counsel, in which they stated, in part, “certain documents appear to be still missing.” The Applicants requested that the CRA “confirm that the emails and all paper and electronic files of the following officials or former officials of the Respondent have been reviewed, and that disclosure of such material contained therein has been made.” The letter listed the following CRA employees and former employees:
Wayne Adams, Rulings (retired)
Phil Jolie, Rulings (retired)
François Ranger, Aggressive Tax Planning Division (retired)
Lynda Gibson, Aggressive Tax Planning Division (retired)
Lucie Bergevin, former Director General, International and Large Business Directorate
Terrance McAuley, Assistant Commissioner, Compliance Programs Branch (retired)
Bill Baker, Commissioner and Chief Executive Officer (retired)
Stéphane Charette, Aggressive Tax Planning Division
Luc Rochefort, Competent Authority Services Division
Sue Murray, Competent Authority Services Division
Joseph Armanious, Montreal Tax Services Office
Pierre Leduc, Montreal Tax Services Office (retired)
Ginette Phisel, Montreal Tax Services Office
Hubert Dubois, Montreal Tax Services Office
Marie-Josée Laporte, Montreal Tax Services Office
Joe Oliverio, Montreal Tax Services Office (retired)
Bernard Benedetti, Montreal Tax Services Office (retired)
William Rosenberger, Montreal Tax Services Office (retired)
[65] On March 27, 2014, the Applicants’ legal counsel sent a letter to the CRA’s legal counsel, requesting that the CRA perform a search of the files of another former employee, Gilles Vallée.
[66] In response to the Applicants’ letters dated January 23, 2014 and March 27, 2014, the CRA undertook further searches of the electronic files of the employees listed in the letter, many of whom had retired from CRA. The email accounts of retired employees Bill Baker, Wayne Adams, Phil Jolie and François Ranger had been deleted in accordance with information management policies and could not be searched. However, the CRA was capable of producing emails from those individuals by accessing other employees’ email accounts. Pierre Leduc’s email account had also been deleted following his retirement, but a “snapshot” of his electronic mailbox from December 2009 was available to be searched. As for the remaining retired employees, CRA searched their email accounts and produced any relevant documents.
[67] Further to the searches referred to in paragraph 66, the CRA communicated additional disclosures of records to the Applicants on March 24, 2014, April 30, 2014, June 27, 2014, July 11, 2014 and July 21, 2014.
[68] Mr. Fidanza described the process undertaken by the CRA in response to the Applicants’ request for missing records in a document entitled “Explanatory Appendix”, which he forwarded to the Applicants’ attorneys on September 5, 2014. As part of this process, the ATIP Directorate obtained certifications from managers of the Montreal Tax Services Office, Rulings, and the International and Large Business Directorate (which includes the Aggressive Tax Planning Division and the CASD) which stated that all records had been produced.
[69] On August 22, 2014, the Applicants filed a complaint to the OIC in relation to the exemptions applied to the records disclosed by the CRA in June and July 2014.
[70] During the course of the OIC’s investigation of the exemptions part of the complaint related to the Missing Records Request, the CRA made supplementary disclosures of records on January 27, 2015, April 23, 2015, May 27, 2015, and July 7, 2015.
[71] On March 6, 2016, following its investigation, the OIC issued a report in relation to the Missing Records Request complaint, which stated, inter alia, as follows:
By tasking only the audit team responsible for the Applicants’ audits and identifying no other departments or individuals as Offices of Primary Interest, the searches of records were restricted to the Montreal Tax Services Office. As a result of this error, the OIC found that the CRA had not performed an adequate search of records upon initially receiving the access to information requests;
In response to the Applicants’ queries to their legal counsel, the CRA conducted several searches throughout the organization, and additional records were found and processed;
The OIC had requested certification from the CRA that it had located all existing records responsive to the requests, which the CRA provided on April 9, 2015;
The OIC concluded in its report that it was “now satisfied that the CRA has made reasonable efforts to locate all records responsive to [the] requests.”
[72] The OIC’s report also addressed specific concerns that had been raised by the Applicants and investigated by the OIC. It stated, in part:
Due to the tasking error mentioned in the previous paragraph, some electronic mailboxes of retired CRA officials were disactivated (sic) following their departure, in accordance with the Treasury Board’s directive on information management;
An income tax ruling dated July 8, 2007 that was unfavourable to the CRA’s assessing position had not been part of the responses initially received. During the investigation, the CRA informed the OIC that the Ruling had been prepared in relation to another taxpayer and thus had not been part of the “master file” documents;
The Applicants provided the OIC with examples of documents which they believed were records containing “corporate information” that had been deleted from the mailboxes of the audit team members. These examples were investigated by the OIC, which found that most either contained information specific to other taxpayers, or were transitory records that did not contain information of business value. Eight of these pages were, however, deemed by the OIC to be responsive to the original requests, to which the CRA agreed. The OIC was satisfied that there was no evidence that the CRA had intentionally withheld these eight pages;
The Applicants had raised the fact that the April 30, 2014 disclosure of records contained copies of emails from auditors Pierre Leduc, Ginette Phisel and Joseph Armanious that were limited to a timeframe ending in December 2009. The OIC explained that this disclosure of records was comprised of a “snapshot” of Pierre Leduc’s electronic mailbox from December 2009, obtained from the Security and Internal Affairs Directorate in 2014. Moreover, subsequent emails originating from the three auditors had already been disclosed in the CRA’s responses to the access to information requests.
[73] Based upon the above, the OIC concluded that the Applicants’ complaint flowing from the Missing Records Request was “well-founded” but was now resolved.
[74] On April 28, 2016, the Applicants filed a notice of application in this Court concerning the missing records component of the Missing Records Request (T-676-16).
[75] On June 22, 2016, the OIC issued a follow-up to its report dated March 16, 2016, stating that a CRA employee had found five (5) additional pages that were responsive to the Bermuda Requests. These pages were disclosed on June 21, 2016, subject to exemptions applied pursuant to sections 13(1 )(a), 19(2) and 24(1) of the ATIA.
[76] Mr. Fidanza deposed that to the best of his knowledge all records responsive to the Applicants’ various ATIP Requests have now been disclosed, subject to any applicable exemptions.
[77] On January 30, 2019, the OIC issued a report regarding the Applicants’ Missing Records Request complaint as it related to the exemptions applied to the records disclosed in June and July 2014. The report states, inter alia, that:
The OIC had not been satisfied with the CRA’s exercise of discretion in applying some of the exemptions. The CRA made further representations to the OIC justifying its exercise of discretion and also released additional information;
In light of the supplementary disclosures made by the CRA during the course of the OIC’s investigation, the OIC concluded that the Applicants’ complaint had been well-founded, but it was now resolved;
Further to its review of the records, the OIC was satisfied that the CRA had properly applied the remaining exemptions on the responsive records pursuant to sections 16(1)(b), 21 (l)(a), 21 (l)(b), 23, and 24(1) of the ATIA.
[78] On February 1, 2019, the OIC issued a report regarding the Applicants’ Missing Records Request complaint on the exemptions applied to the records disclosed between November 2013 and April 2014, as well as the five (5) additional pages disclosed on June 22, 2016. The report states, inter alia, that:
The OIC had not been satisfied with the CRA’s exercise of discretion in applying some of the exemptions. The CRA made further representations to the OIC justifying its exercise of discretion and also released additional information;
In light of the supplementary disclosures made by the CRA during the course of the OIC’s investigation, the OIC concluded that the Applicants’ complaint had been well-founded, but it was now resolved;
Further to its review of the records, the OIC was satisfied that the CRA had properly applied the remaining exemptions on the responsive records pursuant to sections 13(1)(a), 16(1)(b), 19(1), 21(1)(a), 21(1)(b), 23 and 24(1) of the ATIA.
[79] On March 15, 2019, the Applicants filed notices of application in this Court concerning the two (2) exemption complaints related to the Missing Records Request (T-467-19 and T-466-19).
[80] Attached hereto as Annex A is a summary of the various requests for access to information, the responses by the CRA, interventi