Shopify Triumphs in Legal Battle Against Canada Revenue Agency Over Merchant Data Access

Canadian e-commerce giant Shopify Inc. has scored a significant legal victory in its dispute with the Canada Revenue Agency (CRA), following a federal court decision that denied the tax authority’s request for more than six years of customer data.

The ruling, delivered by Judge Guy Régimbald, comes after the CRA sought extensive historical records from Shopify. The agency argued that access to these documents was necessary as part of efforts to verify whether Canadian merchants using Shopify’s platform were complying with both the Income Tax Act and the Excise Tax Act. In addition, some of the information had been requested by the Australian Tax Office, which was pursuing similar compliance checks regarding Australian merchants transacting through Shopify’s systems.

However, Judge Régimbald found that the CRA had failed to adequately outline a specific group of individuals or businesses whose data it was targeting. The judge emphasized that without clearly identifying the subjects of its inquiry, the request for a broad spectrum of private records was not justified. As a result, Shopify was not ordered to turn over the information.

This outcome is likely to be seen as a notable win for Shopify and its merchant base, reaffirming the importance of data privacy and boundaries on government requests for information. For hundreds of thousands of Canadian merchants who operate through Shopify, the judgment offers reassurance that their business data will not be disclosed without clear cause.

Both Shopify and the CRA declined to comment immediately on the outcome of the court decision. The ruling could have lasting implications for how Canadian authorities pursue business records from digital platforms in the future, particularly when those requests intersect with international tax inquiries.