Summary of Minister of National Revenue v. Shopify Inc., 2025 FC 968 (Docket: T-777-23)

Court: Federal Court of Canada
Date: May 29, 2025
Presiding Judge: Justice Régimbald
Parties: Minister of National Revenue (Applicant) v. Shopify Inc. (Respondent)

Overview

The Minister of National Revenue sought judicial authorization to compel Shopify Inc. to provide customer information in response to a request from the Australian Taxation Office (ATO), under the Convention on Mutual Administrative Assistance in Tax Matters. The mechanism used was an “Unnamed Persons Requirement” (UPR) under subsection 231.2(3) of the Income Tax Act (ITA), which requires court authorization.

Key Legal Issues

  1. Applicability of the Convention: Whether the international Convention has domestic legal force under s. 231.2(3)(b) of the ITA.

  2. Ascertainability of the Target Group: Whether the group of unnamed Shopify merchants with Australian customers was “ascertainable.”

  3. Verification of ITA Compliance: Whether the information sought was for verifying compliance with Canadian tax laws.

  4. Judicial Discretion: Whether the Court should exercise its discretion to deny or impose conditions on the UPR.

Court’s Findings

  1. Convention Has No Domestic Force for UPRs

    • The Court held that while the Convention is binding internationally and applies to “named persons requirements,” it is not incorporated into the domestic law framework governing UPRs under subsection 231.2(3)(b).

    • Therefore, the Convention cannot justify issuing a UPR for the purpose of assisting a foreign tax authority.

  2. Ascertainable Group Requirement Was Met

    • The Court found that the group of Shopify merchants with Australian customers was sufficiently defined and “ascertainable.”

  3. Judicial Discretion Favouring Authorization

    • Had the legal threshold regarding the Convention been met, the Court would have exercised its discretion to authorize the UPR, finding it proportionate, feasible, and in the interest of justice.

Outcome

The Court denied the Minister’s application for a UPR. The reason was purely legal: the Convention had not been incorporated into Canadian law for the purposes of UPRs under the ITA. As this was a threshold issue, the application failed despite the Minister meeting the factual and discretionary criteria.

Significance

This decision underscores Canada’s dualist approach to international law: international treaties must be incorporated into domestic legislation to be enforceable in domestic courts. It also serves as a precedent limiting the CRA’s ability to use UPRs for foreign-initiated requests unless explicitly authorized under Canadian law.