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Federal Tax - Investigations. Canada (National Revenue) v. Shopify Inc.
In Canada (National Revenue) v. Shopify Inc. (Fed CA, 2025) the Federal Court of Appeal granted (with variations) an MNR motion, here seeking "an order for preservation of information" (an "interim preservation order" under R373 ['Interim and Interlocutory Injunctions'] and 377 ['Preservation of Property']) pending appeal of a similar issue:[3] In the spring of 2023, the Minister sought the Federal Court’s authorization to impose a requirement on Shopify to provide information regarding certain persons who use Shopify’s software platform to sell products and services online.
[4] Because the Minister did not know the persons’ names—rather, he wanted to obtain this and other information about them—the Minister turned to subsections 231.2(3) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) and 289(3) of the Excise Tax Act, R.S.C. 1985, c. E-15. These identically worded provisions provide that a Federal Court judge may authorize the requirement if the judge is satisfied that (a) there is an ascertainable group, and (b) the requirement is made to verify the tax compliance of the persons in the group. The Minister claimed to have identified an ascertainable group of merchants, and that the information was sought to verify these unnamed persons’ compliance with their duties and obligations under the Income Tax Act and Excise Tax Act.
[5] The Federal Court disagreed. It found that the proposed requirement’s vague and confusing terms meant there was no ascertainable group and made the requirement unworkable: Canada (National Revenue) v. Shopify Inc., 2025 FC 969 at paras. 94–100, 116, 122, 137–141. It also found the proposed requirement to be disproportional: Federal Court decision at paras. 262–268, 272. For these reasons, the Federal Court refused to authorize the Minister’s proposed requirement.
[6] The Minister appeals the Federal Court’s decision to this Court.
[7] In mid-November of 2025, after having served and filed his memorandum of fact and law, the Minister decided to deal with an issue that he had known about for quite some time but had not acted on before: Shopify’s privacy and data retention policies, more specifically its policy of deleting data from inactive accounts after two years. The Minister accepts that these policies are appropriate. However, since the Minister wants to obtain information from the six years preceding the date when a court might authorize the proposed requirement, deleting data from inactive accounts means that some information will be lost. For instance, if an account was active during years 1 and 2, but inactive in years 3 and 4, data from this account would be deleted in year 5 and no longer available. Through his motion, the Minister wants to preserve this data to verify compliance with the Income Tax Act and Excise Tax Act.
[8] After the parties were unable to come to terms on this issue, the Minister filed an ex parte motion seeking an interim order under Rules 374 and 377 of the Federal Courts Rules (SOR/98-106) for the preservation of evidence in the possession of Shopify, including information related to inactive accounts. On December 3, 2025, the Court issued the interim preservation order sought by the Minister until December 17, 2025. On the day the interim order was due to expire, the Court ordered its renewal until today.
[9] Prior to the expiry of the interim preservation order, the Minister served on Shopify and filed with this Court a notice of motion seeking two orders: 1) an order under Rules 3, 373, 374 and 377 renewing the interim preservation order, and 2) an order under Rules 373 and 377 requiring Shopify to preserve certain data until the Minister’s underlying appeal before this Court is finally disposed of. This second order will be referred to as the "“second preservation order”".
[10] Shopify takes the position that the Minister obtained the interim preservation order improperly by moving ex parte without any basis to do so and by failing to make full and frank disclosure to the Court. On that basis, Shopify asks this Court to set aside the interim preservation order. That issue is moot since the order expires today.
[11] Shopify also opposes the motion for the second preservation order. It says that the legal criteria for granting such an order are not met.
II. The Criteria for Issuing the Order Are Met
[12] To determine whether to issue a preservation order, a court applies the three-part test for granting an interlocutory injunction set out in RJR-MacDonald Inc. v Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 SCR 311, at p. 334. That test requires the Minister to show that there is a serious issue to be determined, that he will suffer irreparable harm if the order is not granted, and that the balance of convenience favours granting the order.
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