Budget Bill’s Proposed Tax Reporting Obligations Violate Charter, Solicitor-Client Privilege: Lawyers

A sign outside the Canada Revenue Agency building in Ottawa on May 10, 2021. The Canadian Press/Adrian Wyld

A new budget bill that would modify the Income Tax Act has lawyers warning that the legislation, if passed, would violate the Canadian Charter of Rights and Freedoms and break lawyer-client privilege by requiring lawyers to identify clients to the Canada Revenue Agency (CRA).

Bill C-32, the Fall Economic Statement Implementation Act, 2022, imposes new obligations on a broad group of trusts, requiring them to file annual tax returns to report client information to CRA, including names and addresses.