Canada (National Revenue) v. Hydro-Québec, 2018 FC 622

The Minister sought judicial authorization under ITA s. 231.2(3) and ETA s.289(3) for making a demand of Hydro-Quebec to furnish listed particulars (e.g., invoicing address, address of electricity use, late payment identification and telephone number) for all its commercial customers who were charged the regular electricity rate (as contrasted with very large industrial users with different rates). This information was requested in electronic form so that it could be compared with the information that CRA had in its own files. Hydro-Quebec was quite willing to provide the information, but Roy J considered that this was irrelevant to whether he should grant the authorization.

In finding that s. 231.2(3)(a) was not satisfied, he stated (at paras. 78, 98, TaxInterpretations translation):

Where the group is generic without a link to the ITA, and where one can require information without a link to the ITA (as in the case of the commercial customers of a public utility), there is no limitation on a fishing expedition … The invasion of the private life, the right to not be importuned by the state … is not restricted. …

The plaintiff has indiscriminately created a group which has no actual factual foundation respecting the administration or enforcement of the ITA for that group. The Minister does not see why all the customers of Hydro-Quebec could not constitute an ascertainable group; it would be the same for all the residents of Quebec.

In finding that s. 231.2(3)(b) also was not satisfied, he stated (at para. 79):

The particulars of the commercial customers of Hydro-Quebec are, at best, upstream from information for the audit of their compliance with the ITA.

In further rejecting the Minister’s submission that once the conditions in s. 231.2(3)) were satisfied, the Court was required to issue an authorization, he indicated that even if the conditions were satisfied, he nonetheless had the discretion to refuse authorization, which he would do given the scope of the requested information, stating (at para. 96):

[I]t is for the avoidance of such an invasion that judicial authorization is required in the case of unnamed persons. A certain form of fishing expedition is permitted, but judicial authorization, with its inherent discretion, is there to limit and temper it. To me this seems essential where a fishing expedition is of unparalleled amplitude and the requested information is remote from an audit of compliance with the Act. In creating the power under subsection 231.1(3), Parliament sought at the same time for the judiciary to prevent abusive seizures.

The Minister sought judicial authorization under ITA s. 231.2(3) and ETA s. 289(3) for making a demand of Hydro-Quebec to furnish listed particulars (e.g., address for invoicing and of electricity use, late payment identification and telephone number) for all its commercial customers who were charged the regular electricity rate – so that CRA could compare this information with what it had in its own files.

Roy J declined authorization. First, he did not think that all the regular commercial customers of a utility was an “ascertainable group” as contemplated in s. 231.2(3)(a), as the defining characteristics had no discernable link to compliance with the ITA and ETA. While they were at it, why not define group members as any resident of Quebec? (para. 98)

In finding that the request also did not satisfy the s. 231.2(3)(b) requirement that it be “made to verify compliance,” he stated (at para. 79):

The particulars of the commercial customers of Hydro-Quebec are, at best, upstream from information for the audit of their compliance with the ITA.

Finally, he indicated that even if the specific s. 231.2 (and ETA) requirements had been met, he would have rejected the Minister’s submission that once such conditions were satisfied, the Court was required to issue an authorization - and have exercised his discretion against such an "intrusion in private life" (para. 96). He stated (at para. 96):

A certain form of fishing expedition is permitted, but judicial authorization, with its inherent discretion, is there to limit and temper it. To me this seems essential where a fishing expedition is of unparalleled amplitude and the requested information is remote from an audit of compliance with the Act.