Canada’s Federal Court of Appeal has directed e‑commerce giant Shopify Inc. to retain critical information that is central to an ongoing dispute with the Canada Revenue Agency (CRA). The decision requires Shopify to preserve merchant data that the CRA believes is relevant to its tax compliance investigation, providing regulators with access to records while the legal dispute continues.

The order comes amid a broader legal battle between Shopify and the CRA. The agency had sought judicial approval to compel Shopify to produce six years’ worth of data related to merchants using its platform, asserting that this information is needed to assess compliance with federal tax obligations. Tax authorities requested the information under Canada’s “Unnamed Persons Requirement” (UPR) framework, which allows the CRA to seek information about unidentified third parties in certain investigations.

Shopify opposed the CRA’s request, arguing that the agency had not satisfied the legal criteria required to justify such an expansive demand and that broad production could implicate merchant privacy and contractual obligations. In mid‑2025, the Federal Court ruled against the CRA on similar applications, finding the proposed data requests were overly broad and failed to define an “ascertainable group” of merchants, a statutory requirement under Canadian tax law. Shopify prevailed in that earlier ruling, avoiding widespread data disclosure at that time.

The appeal court’s recent order to preserve data does not automatically mean Shopify must hand over all records immediately, but it ensures that the relevant information is not deleted or altered during the ongoing legal process. Preserving evidence is a standard judicial mechanism intended to maintain the integrity of records that may later be ordered produced or used at trial. This step helps prevent loss of potentially material data while higher courts or the parties consider the merits of the CRA’s claims and Shopify’s objections.

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The case highlights tensions between tax‑authority investigatory powers and digital privacy concerns faced by platform companies. Shopify’s business model — which involves hosting and processing transactions for millions of merchants — means it holds extensive data that regulators may find valuable in enforcement actions. At the same time, broad demands for third‑party data raise questions about privacy and the proper scope of regulatory information requests.

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For Shopify, the appeal court’s order to retain data underscores that regulators and courts are watching closely, and that legal outcomes in this matter could influence how digital platform companies handle government requests for merchant information in the future. The ultimate resolution of the underlying dispute will likely hinge on whether courts find that the CRA has met the strict legal tests required to compel production of third‑party data.