James Morand has been quoted in the article “Decisions Examine Companies’ Right Not to Self-Audit,” published by Law Times.
Writes Julius Melnitzer: “To many observers, the Federal Court’s November 2018 decision in Canada (National Revenue) v. Atlas Tube Canada ULC has tempered the enthusiasm that arose in the business community following the Federal Court of Appeal’s earlier ruling in BP Canada Energy Company v. Canada (National Revenue).”
James agrees that a close examination of the two decisions suggests that Atlas does not herald a return to open season for the CRA in seeking corporate records. “This decision does not expand the prior jurisprudence on when the minister is permitted to examine taxpayer records,” says James. “Previous decisions have established, and Atlas followed, the low threshold of ‘potential relevance’ to be met by CRA.”
In Atlas, James says, the evidence was clear that the due diligence report was prepared for the purposes of the transaction that was under audit. “That was enough of a nexus for the court to conclude that the threshold had been met.”