Canada: Tax Authorities

The Supreme Court of Canada’s decision in Stewart v Canada, 2002 SCC 46, represents a foundational shift in Canadian tax law concerning what constitutes a “source of income” under the Income Tax Act.

The creator economy has fundamentally changed how Canadians earn income. YouTubers, Instagram influencers, TikTok personalities, Twitch streamers, podcasters, affiliate marketers, bloggers, online educators, subscription-based performers, and other digital entrepreneurs now generate substantial revenues through online platforms.

A Federal Court case demonstrates the severe consequences of ignoring Canada Revenue Agency Requests for Information during tax audits. When a landscaping corporation and its principal failed to comply with a court-ordered production of financial documents, they faced substantial fines and a 30-day jail threat, highlighting the critical importance of proper RFI compliance with guidance from experienced tax counsel.

France's ongoing crypto kidnapping crisis has put an old question back on the table for Canadian taxpayers: if a ransom is paid to free a kidnapped crypto executive, employee, or business owner, can any part of it be deducted as a business expense?

Thorburn v The King, 2026 TCC 108, is a practical reminder that employee expense deductions are not allowed simply because an expense appears useful, income-producing, or supported by a Form T2200.

Investors should proactively communicate life changes to their financial service providers.

The Federal Court’s June 12, 2026 decision in Minister of National Revenue v KPMG Canada LLP, T-139-26, is a significant ruling on the limits of privilege assertions by third-party tax advisors in the context of CRA audits.

Canadian crypto tax compliance has entered a fundamentally different phase—one driven by data visibility, artificial intelligence, and targeted enforcement. The longstanding assumption that cryptocurrency transactions operate outside regulatory reach is no longer credible.

When a business is sold, whether through a share sale or an asset sale, the purchaser almost invariably demands restrictive covenants—such as a non-competition or non-solicitation agreement—from the selling shareholders or key principals.