Flaherty’s November 8 letter – note same-day link with call for FATCA comments

As noted in another post on this site and on the IBS site, yesterday November 8 Finance Canada posted an invitation to concerned individuals and groups to comment on the negotiations between the US and Canada over FATCA and related matters.  This “consultation” call noted that Finance has received many comments already on FATCA.  They (Flaherty) have in fact received numerous comments from me, the most recent being an email I sent on June 17.  Yesterday I received by email (five months later!) a reply signed by Flaherty.  I am appending that letter in full to this post.

Note that the letter is dated November 8, the same day that Finance invited comments on the consultations with the US over FATCA.  Note also that the letter re-iterates all the points Flaherty has been making all along, including repeated assurances (see also the fourth page, the September 2012 attachment) that CRA will NOT collect IRS liability or penalty claims against Canadian citizens.

A coincidence that my letter was sent the same day as the consultation invitation?  I don’t think so.  I think the letter, which I’ve seen on the IBS site was received by at least two other persons on the same day I got mine (the identical letter is posted on IBS by someone else), was sent out to re-assure those of us who have been commenting repeatedly (note the opening paragraph in my letter, this was my third or fourth letter to Flaherty on FATCA) that we aren’t going to be thrown under the bus.

At least that’s my interpretation.  It would be rather difficult politically, I’d think, for our government to throw us under any buses, given the timing and wording of the letter and the announcement, even if they wanted to do that.  I don’t think they do.  I think they have a very hot political potato on their hands and they know it.

I’m going to try to attach the full four pages of the letter, at 1280 pixels wide.  I hope this works …

Flaherty letter November 8 2012

 

 

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About schubert

I’ve had a CLN (Certificate of Loss of Nationality of the United States) since 1976, quite by accident (DOS mailed me one after I wrote a long anti-US letter to Henry Kissinger on July 4, 1976, telling him I’d become a Canadian citizen several months earlier and why, then confirming on a form I got in the mail that I had done so willingly – duh! – and with the intent of relinquishing my US citizenship). I filed the CLN away and forgot about it until August 2011 when I first heard about FATCA and FBAR and realized I needed to find the proof I am not an American in spite of my birthplace. My wife, who came to Canada with her ex before I did and also became a Canadian citizen, believed she’d thereby lost her US citizenship but didn’t write Kissinger, didn’t know anything about CLNs or the need to get one (nor did I at the time), and applied for a relinquishment CLN a few months ago. Until August 29, 2012, we were waiting to get her CLN, and it has been in her interests that I’m monitoring and occasionally participating in this and the IBS website. However, joy of joys, wonder of wonders, my wife’s CLN arrived in the mail on that date, so now we both have CLNs. I will continue to monitor and contribute to this website as I have time and when I think I have something constructive to add, but after 12 months of Hell we’re going to get our sanity and lives back, and that means a prolonged vacation from anything related to CLNs, IRS, FATCA, or any other such crap, unless it rears its head and threatens Canada and Canadians to the point where I have to come out of my corner fighting again …

9 thoughts on “Flaherty’s November 8 letter – note same-day link with call for FATCA comments

  1. Hazy

    A common conclusion after the U.S. election was that the Republican Party has not been responsive to the changing composition of the electorate. Some Canadian commentators suggested that the Conservative Party of Canada has made a conscious attempt at appealing to ethnic minorities.

    Likely most who moved to Canada from the U.S.do not see themselves as belonging to an “ethnic minority”, but maybe the CPC does and sees vote potential in appearing to be on the side of former Americans. I just hope the Government of Canada is serious about protecting the rights of its citizens.

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  2. nobledreamer

    @Schubert,

    Thanks for the encouragement. Am working on the letter to submit regarding the Canada-US negotiations.

    @Blaze,

    I agree with what you are saying about FATCA violating Canadian constitution etc, it’s just that I absolutely do not trust the US on any level. I don’t particular trust the Harper govt either; mostly due to what I have learned about Shiprider and “Beyond the Border” and the North American Perimeter Security program. Here are some choice quotes that give me the quivers whenever I think we are going to be safe from FATCA: (http://canadians.org/blog/?p=14891)

    “The oversight and accountability mechanisms appear to be far too weak and there was never sufficient debate about the cross-border policing initiative when the legislative changes were first introduced. Instead of engaging in a real discussion, though, the Conservatives are responding that Masse’s criticisms “show how out of their depth the NDP are on border issues,” and that, “Our government will co-operate with the Obama administration-why won’t the NDP?”

    “The stealthy way in which the Harper government has introduced its cross-border marine policing initiative should be a warning about the way it plans to introduce other joint security measures with the United States described in the Border Action Plan.”

    “In fact, the government has indicated a willingness to give up not only sovereignty as it relates to our border and the sharing of personal information, but also our agricultural marketing boards. The Wheat Board has already been cast aside. Are dairy and poultry next?”

    “In the meantime, you can write Minister Toews at vic.toews@parl.gc.ca to let him know the Shiprider/Integrated Cross-Border Maritime Law Enforcement Operations legislation should be pulled out of the budget implementation bill so that we can get to the bottom of whether there is enough accountability for U.S. security agents under the project, or whether we need it at all based on the evidence.”

    If the US can get away with the digusting way it has misapplied FBAR, the OVDI, etc., it just doesn’t seem that impossible to me, that they will find a way to stuff FATCA down our throats and that our government will go along with it, quite willingly. I find it odd that if they are already negotiating, they are just now getting around to asking for input. Kinda sounds like lip service to me, you know?

    I have seen the Twitter conversation with that fellow-Joao something-or-other. I responded a bit late to one or two of the comments. I don’t seem to get to the computer in time to get to all the juicy stuff!

    I may be terribly thick, but I fail to understand how this “reciprocity” can even be remotely equal on both sides. And if that is so, why on earth would any country agree to it when the US is getting so much more?

    I also don’t think the Treaty is such a protector-US seems to get the “saving clause,” once again, gaining more than its partner.

    I think our hope lies in what you are saying about the TD lady – a bilateral agreement that is financial-entity specific.

    Please don’t get me wrong-not trying to be argumentative in any sense, I guess I just don’t have much idealism or hope that any government really operates out of respect for or protection of, it’s citizens. 🙁

    Reply
  3. Hazy

    @ Blaze

    I also have been disappointed by the lack of response from Elizabeth May. She does have a lot of issue to deal with by herself.

    At any rate, I’ll try another route through persons close to her (family/ friends) that I know. If I have any success, I’ll let people know.

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  4. Tim

    This is a link to the agreement the UK Government signed.

    http://www.hm-treasury.gov.uk/d/facta_agreement_tax_compliance_140912.pdf

    Annex I and the main text of the agreement is very bad and supposedly is non negotiable by the US(and its implementation into Canadian law would be probably violate the charter).
    Annex Two is however where the US tries to limit the effects of Annex I and the main text by setting out certain exempt accounts and institutions.
    In the UK for example Credit Unions, Building Societies, and Friendly Societies are all specifically exempted from FATCA under the agreement(Credit Unions are not even mentioned in the US proposed rules nevermind building and friendly societies which are very British specific credit union like institution). So in a Canadian context I would have to imagine Credit Unions, Caisse’s and their “centrals” would all be exempted. Provincial and Territorial governments(along with the Government of Canada) and their crown corps would all be exempted which would include CPP, QPP, OAS, Alberta Treasury Branches(a bank/credit union like institution that just does business in Alberta owned by the AB government), Canada Post, OMERS, Ontario Teachers Pension etc. In terms of “accounts” UK ISA’s, Child Trust Benefit Accounts, Junior ISA’s etc equivilient to RRSP, TFSA, RDSP’s are exempt.

    According to the FATCA Compliance Complex Types these lists of “safe” products and institutions will be expanded in the future including the UK specific list. Now what TD Bank and others have argued in the past is while lets say TD Bank is an institution would not be exempt unlike a credit union all Canadian “resident” held accounts should be exempt too. Remember RRSP’s can be held by former Canadian residents no longer living in Canada concievable in both cases they would be exempt.

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  5. Blaze

    @Schubert: Thanks! I actually received the same letter sent attached to an e-mail. Mine, however, came on November 1. I have been meaning to post it here, but too many other things going on in my life.

    Mine came a day after I e-mailed Bob Rae, Hoang Mai and Don Davies with a cc to Flaherty saying I had lost track of how many e-mails I had sent to Flaherty with no response. So, this time I said I was trying a different tactic. I sent the e-mail to Rae, Mai and Davies with a cc to Flaherty. Within 24 hours I had the letter from Flaherty. This time, no response yet from Rae, Mai or Davies. I have completely given up on Elizabeth May because I have never even received an acknowledgement to anything I sent to her.

    Flaherty’s tone has softened a bit, but he still does not seem to be budging from key points. I agree with Schubert Canadian government is not likely to throw us under the bus. The guts and gore would be far too messy for them to try to clean up publicly, legally, financially and politically.

    Please everyone, consider contacting Abby Deshman at Canadian Civil Liberties Association. I think she is ignoring me now because perhaps she thinks I am a lone voice. Her e-mail is adeshman@ccla.org. We really need CCLA on board in this fight.

    @NobleDreamer: I agree with Tim and Schubert. With Canadian laws and constitution, Canadian banks and government cannot enforce FATCA as written without lawsuits (at which we would succeed). The government knows it, the banks know it and we know it. Although the government and banks are not willing to admit it to us, they also know we know it.

    As Tim says, the only way FATCA can apply to Canadian citizens and residents in Canada is with notwithstanding. That would be political suicide. If the government didn’t do it for same sex marriage (hard now to believe how controversial and sensitive that was just a few years ago!), I don’t think they will do it to satisfy a foreign government–and especially not to satisfy US.

    With all that said, there is someone on Twitter (think he’s in UK) who is challenging Just Me, Tim’s friend Canadian Fan and me to a bet because he is convinced Canada will comply.

    I have a letter from the Associate VP of FATCA at TD dated June 6 which says “There is also the possibility that Canadian and US governments could negotiate a bilateral agreement that would apply to Canadian banks specifically.” I don’t know if she has inside information or if that is wishful thinking on her part. However, that is what I see (hope!) will happen.

    I suspect Canada’s long-standing effective tax treaty with US will be what will save us. Canada can point to the fact we don’t need an IGA to report on US residents. Canada and US have been exchanging that information for 70 years. So, I think the FATCA agreement for Canada will just deal with each other’s residents.

    Of course,I could be wrong about that. Especially critical to all of this is that the British IGA guarantees them parity with any country which negotiates a better deal than they have.

    Plus, we all need to remember US banks and some politicians are still kicking up a fuss about “reciprocity” extending beyond Canada. That is only going to become louder and stronger as more countries sign on to “reciprocity.” Germany has been clear their deal is off without “reciprocity, so even the Europe Five may be tenuous now.

    With all that said, we can’t give up the fight. We must continue to make our voices heard.

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  6. schubert

    For further information: I just sent an email to my MP (Paul Dewar, NDP) with copies to Tom Mulcair and to Peter Julian, the party’s finance critic). I called their attention to yesterday’s invitation for comments from Finance, with the web link, forwarding my letter to Flaherty of June 17 (which I had also sent to Dewar and Mulcair) and attaching a copy of Flaherty’s reply to me. I asked what the NDP’s position is on these matters, and said I look forward to hear what they intend to do about it. I’ll report back on this thread whatever I hear from them.

    @nobledreamer. Don’t give up, pressure your own MP and the opposition parties as well as the government to protect the privacy of all Canadians, including dual citizens. Write to them. Maybe it will make a difference, maybe it won’t — but if no one speaks up, I can guarantee this will go through. And remember how this sorts out, and where every politician stood on this, the next time you find yourself in a voting booth. And tell them that you will do that, in your letter!

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  7. nobledreamer

    I don’t know how the govt here is going to get out of signing on to FATCAT. Do you think there is any hope they could work in something distinct or unique that addresses the situation of USPs in Canada?
    I do think they will honor their statements about not collecting FBARs and taxes from Canadians but I can still see account information being sent, which would be a problem for duals for sure. Not wise to underestimate the scheming, money-starved US gov.
    I’ve been at this over a year now and it just seems to be one very long string of problem upon problem with no clear resolution of anything. It’s unbelievable how they can continue this charade and get away with it.

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  8. schubert Post author

    I may as well add the, to me, obvious observation that all of this has happened two days after the US election. I don’t think it’s any coincidence that our government has been holding back, five months in my case, on their replies and comments, not to mention the invitation to comment on the issue, until after the election was over and they know who they’re going to be dealing with for the next four years. No point in getting hot and heavy into the bargaining with an administration that might not have been there in January. But now they know who they have to deal with for the next four years (if they survive in power that long). I don’t think this is even slightly coincidental, either.

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  9. schubert Post author

    It seems to have worked, though when I first tried to view the PDF I got an error message concerning “drawing” but eventually the letter appeared. I hope no one else has that problem (it took a bit of fiddling to get WordPress to incorporate the link to the PDF but it finally seemed to work.

    This is a bit of a duplication of a post earlier today by someone else at Isaac Brock Society, but I think it’s important to have this letter available here at Sandbox and also to prove that more than one copy of this now-standard letter, with its repeated assurances about no collecting of IRS alleged liabilities by CRA against Canadian citizens, was sent to more than one person, and on the same day.

    I haven’t posted my own copy of the letter on IBS because that WOULD be arguably needless duplication, but I have posted a comment over there that I also got the same letter. A batch of them went out by email on November 8 to at least three of us.
    BTW this is the very first email reply I’ve ever received from Flaherty, all the other replies, when they eventually came, were via Canada Post.

    Reply

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