Federal Court denies Minister of National Revenue’s Request for Data about Unnamed Persons

On May 29, 2025, the Federal Court released its decisions in Minister of National Revenue v. Shopify Inc., which consider the circumstances under which a court will order third parties to disclose information about unnamed individuals to the Minister of National Revenue (the Minister)¹. These types of orders are commonly known as unnamed persons requirements (Unnamed Requirements).

What you need to know

• Unnamed Requirements must target an ascertainable group: An Unnamed Requirement will only be granted if it identifies the specific group of individuals it is targeting with sufficient precision. A court will not authorize an Unnamed Requirement if there is no ascertainable group.
• Unnamed Requirements cannot be used to assist foreign tax authorities: A court will not grant an Unnamed Requirement if its purpose is to assist foreign tax authorities pursuant to international treaties.
• Discretionary factors: In deciding whether an Unnamed Requirement should be granted, a court may consider the availability of the information and the feasibility and proportionality of the proposed Unnamed Requirement. However, privacy concerns and the cost of responding to a request may be irrelevant.

Legislative context

The Income Tax Act (the Tax Act) allows the Minister to obtain information from taxpayers for audit purposes. In addition to seeking information directly from taxpayers, the Minister can issue requirements for information to third parties. There are two types of third-party requirements:

1. named person requirements, which target specific, named persons; and,
2. Unnamed Requirements, which target specific but unnamed persons.

Named person requirements can be issued for purposes of assisting foreign tax authorities under information exchange treaties, such as the Convention on Mutual Administrative Assistance in Tax Matters (the Convention) and do not require prior judicial authorization.

On the other hand, Unnamed Requirements do require prior judicial authorization. Under subsection 231.2(3) of the Tax Act, a court may grant an Unnamed Requirement if the following conditions are met:

1. there is an ascertainable group of persons whose information is requested; and
2. the request is made to verify compliance by the person or persons in the group with any duty or obligations under the Tax Act.

The court retains the residual discretion to deny an Unnamed Requirement or impose any conditions it deems appropriate even if these requirements are satisfied.

Prior to the Shopify decisions, it was unclear whether Unnamed Requirements could be used for assisting foreign tax authorities.

Background

In Shopify, the Minister applied to the Federal Court seeking two Unnamed Requirements.

The first Unnamed Requirement was for information about Shopify merchants who gave a Canadian address when registering for a Shopify account and who have sold and/or leased products and/or services using Shopify (the Domestic Unnamed Requirement). The Unnamed Requirement also sought information from “Shopify Owners”, who the Minister described as individuals associated with the Shopify accounts (i.e., employees, agents, etc.).

The second Unnamed Requirement was for information about Shopify merchants who had customers with Australian billing addresses (the International Unnamed Requirement). The Australian Taxation Office requested the Minister obtain this information under the Convention.

The Domestic Unnamed Requirement

The Court refused to authorize the Domestic Unnamed Requirement because it did not target an ascertainable group of individuals.

The Court observed the threshold for establishing an ascertainable group of individuals is low but not nonexistent—the Unnamed Requirement must target a group that can be identified with “sufficient precision”. An Unnamed Requirement will not be granted if the third party cannot comply or does not know what information is being sought and from whom.

The Domestic Unnamed Requirement failed to target an ascertainable group. The opening language of the Domestic Unnamed Requirement indicated it targeted Shopify merchants who gave a Canadian address when registering for a Shopify account. At the same time, the Domestic Unnamed Requirement also used the term “Shopify Owners” and sought information from this group, which is much larger and includes persons who were “associated” with the accounts.

The Court held this inconsistency made the Domestic Unnamed Requirement unworkable. Shopify could be held in contempt of court if it only provided information about the Shopify merchants. At the same time, Shopify could be breaching its contractual obligations if it provided information about Shopify Owners when the Minister was only targeting merchants.

Notably, the Court explained that although the Minister has no obligation to consult with third parties, this issue could have been avoided had the Minister chosen to “genuinely collaborate” with Shopify in advance.

The International Unnamed Requirement

The Court refused to authorize the International Unnamed Requirement, finding Unnamed Requirements cannot be granted to assist foreign tax authorities. Unnamed Requirements can only be issued to verify an individual’s compliance with the Tax Act. The Court analyzed the text, context and object and purpose of subsection 231.2(3).

The Court held the text of subsection 231.2(3) is clear and unambiguous. An Unnamed Requirement may only be obtained to verify compliance with the Tax Act. This interpretation is consistent with the broader context of subsection 231.2(3); where Parliament intended to permit the disclosure of information in the Tax Act to further international treaty obligations, it has expressly done so. For example, subsection 231.2(1) specifically authorizes the Minister to issue requirements to named individuals for purposes of the Convention. Finally, authorizing Unnamed Requirements to assist foreign tax authorities would undermine the purpose of subsection 231.2(3), which is to only allow the Minister to conduct a broad inquiry under certain specific conditions.

Factors when exercising residual discretions

Although the Court had no need to exercise its residual discretion in these cases, it offered guidance on what factors may be relevant/irrelevant:

• Privacy issues: Privacy concerns are generally irrelevant. A taxpayer has a very low right to privacy vis-à-vis the Minister. However, privacy concerns may be relevant if there is reliable evidence that the Canada Revenue Agency cannot adequately protect the requested information since taxpayers have a right to privacy vis-à-vis the public.
• Cost to the third party: The cost to a third party in responding to an Unnamed Requirement may be irrelevant. These costs reflect the normal cost of doing business and represent the third party’s public duty.
• Feasibility and proportionality: The burden in retrieving the information and the proportionality of the request are relevant. For example, a court may extend the timeline for responding to an Unnamed Requirement if it is not feasible to meet the Minister’s deadline or narrow the scope of the request if it is disproportionate.
• Availability of information: An Unnamed Requirement must seek information that is available. A court will not grant an Unnamed Requirement if it is seeking unavailable information.

Consistency with past decisions

The Federal Court’s reasoning in the Shopify decisions is consistent with past decisions in this area:

• In eBay Canada Ltd v. Minister of National Revenue—another decision where the Minister requested an Unnamed Requirement for an e-commerce platform—the Federal Court of Appeal authorized the request partly because the expectation of privacy for business records relevant to determining tax liability is low.
• In Canada (National Revenue) v. Hydro-Québec, the Federal Court refused to authorize an Unnamed Requirement because the group was generic, had no connection to the Tax Act and the information was outside the scope of the Tax Act. Notably, this was the first time an Unnamed Requirement application was denied. The Shopify decisions mark the second and third time the Minister was unsuccessful.
• In Blue Bridge Trust Company Inc v. Canada (National Revenue), the Federal Court dismissed an application challenging a requirement issued by the Minister to assist French tax authorities, finding, among other things, that the requirement was a named persons requirement and not an Unnamed Requirement.

Looking forward

As the Minister viewed the Shopify decisions as test cases, one can expect they will impact the Minister’s conduct in future Unnamed Requirement applications. For example, the Minister may be encouraged to work more closely with third parties in future requests to avoid issues relating to the targeted group. However, third parties must remain mindful of their contractual obligations, particularly regarding confidentiality, when responding to Unnamed Requirements requests.

For now, and perhaps more significantly, the International Unnamed Requirement decision presents a challenge for future international Unnamed Requirement requests where the taxpayer is not named.