Canada: Access to Tax Policy information denied
24 June 2014
Posted by: Author: John A. Sorensen
Author: John A. Sorensen (Gowling Lafleur Henderson LLP)
On May 9, 2014, the SCC decided John Doe v. Ontario (Finance) (2014 SCC 36), an Ontario freedom-of-information request, and dismissed the appeal filed by an unnamed tax lawyer.
Ontario Finance refused the lawyer’s request for government records concerning amendments to the Ontario Corporations Tax Act (OCTA) pursuant to section 13(1) of the Ontario Freedom of Information and Protection of Privacy Act (FIPPA). That provision allows government officials to refuse to disclose records that would "reveal advice or recommendations of a public servant,” etc. Six undated drafts of a policy options paper used to brief the minister were identified; they considered possible effective dates for OCTA amendments to eliminate a tax loophole. The SCC defined "policy options” as alternative courses of action respecting a decision to be made that constitute evaluative analysis rather than purely objective information. All but one of the records included express or implied information regarding policy options that were not recommended. One option was adopted, and partially retroactive OCTA amendments were enacted.
The information and privacy commissioner of Ontario overruled the finance minister and ordered disclosure; the commissioner’s decision was upheld by the Ontario Superior Court (2011 ONSC 2030), but the Ontario Court of Appeal (2012 ONCA 125) allowed Finance’s appeal. The SCC dismissed the requester John Doe’s appeal and confirmed that the requested records would not be disclosed. The issues before the SCC were whether the commissioner’s interpretation of "advice and recommendations” was reasonable and whether it was reasonable to require that the relevant records must have been "communicated” before FIPPA section 13(1) was engaged.
The commissioner originally decided that the requested records were not exempt from disclosure because they did not reveal a suggested course of action and were not recommendations as required under FIPPA section 13(1). However, the SCC concluded that the absence of recommendations did not mean that the records must be disclosed: the provision also refers to the "advice” of a public servant, a broader term than "recommendations.” According to the modern rule of statutory interpretation, FIPPA section 13(1) means that "advice” includes policy options. The FCA reached the same conclusion in 3430901 Canada Inc. (2001 FCA 254), a case that concerned the federal Access to Information Act. The SCC’s view, which included policy options as advice exempt from disclosure, balances the public’s right to information in a democratic society against the competing objective of allowing public servants to freely consider a range of policy options and advise accordingly, without fear that their candid comments may be publicized.
Whether practitioners agree with the outcome of this case is likely to depend on where they stand on the spectrum between public access to information and the preservation of confidentiality to enable public servants to provide frank and uncensored advice. Reasonable people may differ about where the balance should be struck. Private practitioners may strongly argue that access to policy documents is relevant in order to determine purposive interpretation—and that it is essential in GAAR cases, in which the determination of a statutory provision’s underlying policy is a prerequisite to a misuse-or-abuse analysis. However, requiring disclosure of official advice is likely to harm the legislative process. Although the inner machinations of some government bodies should be protected from disclosure to the media, tax policy is arguably unique; and when the tax authorities allege that a taxpayer has abused or misused a policy, it is reasonable to expect that the taxpayer will have access to government records relevant to the underlying policy. In my view, the balance shifts further in favour of disclosure in the case of retroactive legislation, which materially affects a taxpayer’s historic filing positions, for which the taxpayer cannot plan alternative courses of action.
The SCC appeal also considered whether a record must be communicated before the FIPPA section 13(1) exemption applies. Uncommunicated records include drafts that are eventually communicated to a decision maker. The SCC concluded that nothing in section 13(1) required the communication of information to engage the exemption and that information in drafts informs the final communicated version: protection from disclosure is illusory if drafts are unprotected.
Mr. Doe’s interest in the OCTA amendments was likely not purely academic but probably related to appeals involving interprovincial tax-planning structures and possibly defending against the application of OCTA’s general anti-avoidance rule to those structures.
Practitioners typically rely on access-to-information and privacy legislation to obtain copies of revenue authorities’ records in direct relation to their clients. At times, it is also extremely helpful to obtain CRA technical interpretations that have not been published through the usual channels or to obtain information relating to legislative history from federal or provincial departments of finance. John Doe is an informative case because it provides some guidance on where the lines may be drawn when one seeks policy documents in order to aid in purposive statutory interpretation or GAAR submissions. However, most provincial freedom-of-information statutes already expressly exclude policy considerations from disclosure, and thus the usefulness of the guidance in John Doe is likely to be limited to a few provincial statutes and possibly the federal Access to Information Act.
This article first appeared on ctf.ca.