Michael Geist, on his great blog, is pointing to an article in yesterday's Globe & Mail, in which the Federal Court of Canada has ordered that eBay Canada turn over records related to Canadian PowerSellers. As the Court's decision says, the Income Tax Act authorizes such fishing expeditions.
What is probably of greatest relevance from a privacy point of view is that the location of the information is not entirely relevant:
 The issue as to the reach of section 231.2 when information, though stored electronically outside Canada, is available to and used by those in Canada, must be approached from the point of view of the realities of today’s world. Such information cannot truly be said to “reside” only in one place or be “owned” by only one person. The reality is that the information is readily and instantaneously available to those within the group of eBay entities in a variety of places. It is irrelevant where the electronically-stored information is located or who as among those entities, if any, by agreement or otherwise asserts “ownership” of the information. It is “both here and there” to use the words of Justice Binnie in Society of Composers, Authors and Music Publishers of Canada v. Canadian Ass’n of Internet Providers, 2004 SCC 45 (CanLII),  2 S.C.R. 427 at paragraph 59. ...
 In the present case, eBay Canada has access to and uses information respecting PowerSellers. It is not determinative of the issue that the electronic apparatus storing the information which eBay Canada accesses is outside Canada. The information can be summoned up in Canada and for the usual business purposes of eBay Canada. The situation may be different if the information never had been used in Canada.
 To analogize to R. v. Spencer, supra, the information that the bank manager had is summonable from his memory but it was placed in his memory through transactions he witnessed in the Bahamas. Nonetheless, he was required to summon up the information in Canada. Here eBay Canada has access to and uses information stored in a computer for the very purpose of dealing with Canadian PowerSellers. For perhaps corporate efficiency the information is stored elsewhere, but its purpose is in respect of Canadian business. The information is not foreign but within Canada for the purposes of section 231.2 of the Income Tax Act.