CRA’s Updated Powers to Gather Information (2025)

On July 25, 2025, the Canada Revenue Agency (CRA) released a new internal policy (AD-25-04) that updates how it gathers information during audits and compliance activities. This replaces the 2019 policy and reflects changes to the Income Tax Act (ITA) and Excise Tax Act (ETA). The policy is guidance only—it is not law. Disputes over CRA’s powers are still decided by the courts.

Key Highlights for Taxpayers

  1. Broader Scope – The CRA can now request more types of information beyond tax accrual working papers.
  2. Requests for Information – Responses may need to be provided in specific formats (e.g., spreadsheets, charts). Debate continues over whether this can require creating new documents.
  3. Restricted ‘Requirements for Information’ – These are mainly limited to requests from financial institutions, foreign jurisdictions, or involving unnamed persons. Other uses require CRA headquarters approval.
  4. Solicitor-Client Privilege – CRA should not routinely request privileged information, but it may challenge privilege claims with the Department of Justice involved if disputed.
  5. Deadlines – CRA staff are told not to grant deadline extensions, though delays in enforcement may occur.
  6. Proportionality Principle – CRA should only seek information necessary for the audit. Taxpayers can cite this principle if requests appear excessive.

What This Means for You

The CRA’s powers remain extensive, but they are limited by law. Taxpayers should be aware of their rights when responding to information requests. If you receive a request you believe is excessive, you can raise the proportionality principle or seek legal advice. Ultimately, the courts—not the CRA—have the final say on how the law is applied.

 

This article is intended for general information purposes only and does not constitute professional advice.  Income tax law and regulation change frequently and the content on this article may no longer reflect the current state of the law. If you have any specific questions, you should consult a professional services advisor or email us for further advice.