Office of the Information Commissioner of Canada

The Flip Side of the Coin


A taxpayer requested copies of sections of a manual used by officials of Canada Customs and Revenue Agency (CCRA) to determine matters relating to the non-resident and deemed-resident assessment sections of the Income Tax Act. The manual, known as T.O.M. (Taxation Operations Manual), contains policies and procedures for applying and enforcing the Income Tax Act. In response, CCRA disclosed some of the requested information but exempted much of it on the grounds that disclosure could be prejudicial to the enforcement of the Income Tax Act.

The requester was unsatisfied with this response. He was of the view that the policies, methods and procedures employed by CCRA officials, in determining the residency of an individual for income tax purposes, should not be secret. Consequently, he complained to the Information Commissioner as follows:

“- I have a right to know what the rules are, the actual rules not the published ones and, just as importantly, how they will be applied.”

Legal Issue

May paragraph 16(1)(c) of the Act – the law enforcement exemption – be relied on to keep secret information which individuals need to know in order to properly understand, and comply with, the Income Tax Act?

For its part, CCRA explained that its residency determination process involves considering information about an individual’s “ties” to Canada or to other countries. These ties are categorized as “primary” and “secondary” and, residency will be determined based on the number and combination of “ties”. However, CCRA maintained that, were it to disclose the number and nature of these “ties”, individuals could “manipulate the system – to avoid paying Canadian income tax”.

On the other hand, the taxpayer/ requester argued that he could not properly arrange his affairs or challenge CCRA’s determination rulings without having access to the rules of the game. Indeed, the taxpayer expressed concern that secrecy fostered a “shifting sand” of rules which could be turned against the taxpayer at any time.

The Information Commissioner formed the view that Canadians should know the “rules of the game”. He concluded that the institution’s fear, that the taxpayer could manipulate the system, is outweighed by the concern that secrecy could allow the system to manipulate taxpayers. In the commissioner’s view, this type of secrecy was not what Parliament intended to protect when it enacted paragraph 16(1)(c) of the Access to Information Act.

After reflecting upon the commissioner’s concerns, CCRA decided to release most of the previously withheld information. Within the T.O.M.’s, however, there are income thresholds or tolerances which guide CCRA’s enforcement actions. Disclosure of these, according to CCRA, would impede its enforcement of the Income Tax Act.

The commissioner accepted the legitimacy of the limited amount of remaining secrecy and recorded the matter as resolved.

Lessons Learned

Government institutions have a right to keep information secret in order to protect the integrity of their law enforcement duties. However, that legitimate sphere of secrecy does not extend to the “rules of the game” which citizens are expected to obey and against which their obligations and entitlements will be assessed. The exemption in paragraph 16(1)(c) does not authorize institutions to maintain systems of secret law even if to do so would make life easier for the government.

What Act?

Section 16 – Law Enforcement & Investigations – Security