CRA's New Audit Powers — 2026 Update: What's Dropped, What's Still Coming

A year ago the alarm was loud: the Canada Revenue Agency was about to get sweeping new audit powers — including the right to make taxpayers answer questions under oath. Here's the 2026 update, because the story has changed in ways that matter. (This updates our earlier breakdown, 3 CRA Powers Coming in 2026.) The most controversial power was dropped. The rest still aren't law. And the CRA's existing powers are already stronger than most people realize. Here's exactly where things stand as of June 2026.

The biggest change: the “under oath” power was dropped

The single most controversial proposal — letting the CRA compel you to answer questions under oath or affirmation (a proposed new section 231.41) — is not in the bill now before Parliament. After heavy criticism, the government left it out of Bill C-31.

But here's the nuance that matters: this does not mean the CRA can't make you answer questions. Since December 2022, the CRA has already had the power under section 231.1 to require a taxpayer — or another person — to attend and answer questions orally, including by video, and to answer in writing. What got dropped was the extra oath/affirmation layer, not the underlying power to compel answers.

Where things actually stand

The remaining audit-power expansions live in Bill C-31, which received first reading on May 6, 2026. As of June 2026 it has not received Royal Assent — so these measures are proposed, not law. They would take effect only if and when the bill passes. (This is a separate bill from the bare-trust trust-reporting changes in Bill C-15, which did become law — we cover those in CRA Bare Trust Rules 2026.)

The three powers still on the table

1. A new “Notice of Non-Compliance” (proposed s.231.9). If the CRA decides you haven't fully complied with an information request, it could issue a notice of non-compliance. While it's outstanding, a $50/day penalty applies — up to $25,000 — and your reassessment window is paused. You'd have 90 days to ask for a ministerial review; the Minister has 180 days to confirm, vary, or vacate it; and you could then apply to a judge. There's an exception where your reason for not complying was a reasonable belief the material was protected by solicitor-client privilege.

2. A 10% compliance-order penalty (proposed change to s.231.7). If the CRA obtains a court compliance order against you, the penalty is 10% of the total tax payable for each year the order covers — not “up to” 10%, a flat 10%. It doesn't apply where the year's tax owing is under $50,000, or where solicitor-client privilege was a reasonable basis for not complying, and the Minister must waive it where it would be disproportionate or unfair.

3. “Stop-the-clock” on reassessment (proposed s.231.8). When you challenge an information demand — through judicial review, a contested compliance order, or while a notice of non-compliance is outstanding — the clock on the CRA's reassessment period stops. Notably, it can be triggered by actions involving not just you but a non-arm's-length person connected to your file. In plain terms: fighting an information demand can keep your tax years open longer.

Bill C-31 also broadens the CRA's general information-gathering wording — a new paragraph 231.1(1)(f) to require information or documents “in a reasonable manner and within a reasonable period,” plus clarified rules for domestic (s.231.2) and foreign-based (s.231.6) information requests, and compliance orders extended to foreign-based requirements.

What the CRA can already do today

It's tempting to file all of this under “someday.” Don't. Even without Bill C-31, the CRA already has broad power to:

• inspect and audit your books, records, and supporting documents;
• require reasonable assistance and answers — orally (including by video) or in writing;
• issue domestic information requirements and foreign-based information requirements; and
• seek compliance orders from a court.

The Bill C-31 changes mostly raise the stakes — bigger penalties, paused reassessment clocks — on a system that is already powerful.

What it means for you

The practical implications:

• If Bill C-31 passes, resisting or litigating a CRA information demand gets materially more expensive and can keep your tax years open longer. The cheap, slow stall is going away.
• Solicitor-client privilege is the one exception the proposed penalties expressly protect — and it generally does not extend to advice from non-lawyer advisors. Handle privileged material carefully.
• The “under oath” headline is gone, but the CRA's everyday power to demand records and answers is already strong — and getting stronger.

None of this is a reason to panic. It's a reason to take CRA information requests seriously and get proper advice early if you're audited.

A note on this article. This is general information about proposed and current Canadian federal tax rules as of June 2026 — not advice for your situation. Bill C-31 is still before Parliament and could change. Confirm your position with a qualified tax professional.