The elephant In the room

A recent information session was held for members of the Canadian investment industry to discuss the impact and implications of a Canadian IGA on the industry. Most of the session was technical in nature, being devoted to what may be described as “back office operations” and the relationships between Introducing and carrying brokers. However there was a general update on the status of the Canada IGA and what to expect. In the notes below, the Canadian investment industry is referred to as “industry” and individual firms are referred to as CFI.

Please note that this posting may be updated if and when new information is received.

Industry does not know when the IGA will be signed. Expectations are for signing by the end of 2013 and definitely no later than mid-March, 2014.

After signing, the IGA will be presented to cabinet for approval. 

CRA has suggested to industry that, in the meantime, the Model 1 IGA and UK guidance may be used as a template. However, there will be differences due to different Canadian laws, regulations, procedures and structures. 

Industry expects the guidance issued by CRA to be “slimmer’ than the UK guidance. Many details will have to be worked out after the first guidance is released. 

The 30% withholding on recalcitrant accounts is being eliminated. Instead, information on those accounts will be forwarded to CRA along with accounts with confirmed U.S. indicia. 

Self certification is left to each CFI and likely will not differ greatly from existing KYC/AML procedures. However self certification must address U.S. citizenship and tax residency. 

Most registered accounts will be excluded. It is not known for sure, just yet, which ones they will be. Expectations are strong that RRSPs, RESPs and TFSAs will be among the excluded accounts. 

No accounts will be closed. 

Issues with customers with U.S. indicia was described as “the elephant in the room” 

I have a few comments—

Industry expressed frustration over the lack of details they have been given so far. I would guess that actual implementation of the IGA may be delayed for some time as the kinks are worked out.

I found it interesting that there was no mention of Parliamentary approval, just cabinet approval.

This session took place just a few days after the Ottawa press conference and the 2 person protest. Mention was made of Flaherty’s remarks and the G&M article. I had the impression (my opinion only) that the comments to the G&M article were noticed, as well as comments posted elsewhere.

While our focus has been primarily on government, the entire Canadian financial industry should be made aware of our concerns. So, keep those cards and letters (comments and emails) coming.

 

54 thoughts on “The elephant In the room

  1. OutragedCanadian

    We can only influence (maybe) our own government, so let’s concentrate on that, educate them, wear them down, force them to protect their citizens. If Canada stands up to the US overreach, then perhaps others will follow our example, instead of blindly assuming they must comply with US laws.

    Reply
  2. AtticusinCanada

    @Arctic, I’m not right wing at ALL but, in defence of Palin since I don’t like when female pols are taken to task for things they did not do. She never said she could see Russia from her front porch. That was Tina Fey! lol!! She said you could see Russia from a small island off Alaska. I’d never vote for the woman as I strongly disagree with many of her positions and since I’m not going to be a “U.S. person” However, a funny made by Fey got attributed to Palin.

    Also, I don’t agree with you that Obama is a “Muslim” and what if he were? I do agree with you that he has some very dubious dealings supporting certain rebels the U.S. formerly strongly opposed. That is before they trained and armed them. Who can keep up? We could go on all day about the U.S. giving weapons to dictators, supporting corrupt regimes then opposing them later. There’s a lot they have done but, it’s got zero to do with FATCA.

    At any rate who cares? I think focusing on fighting FATCA in Canada is the only way to deal with this. Railing about or trying to convince anyone about anything to do with the U.S. inside that country is going to get us no where.

    Reply
    1. Hazy

      @AtticusinCanada

      I strongly agree with you last paragraph above. We’re Canadians. Most American political leaders and the much of the American population could care less about opinions expressed by residents of other countries, even if those residents are American citizens. This has been proven time and time again.

      Although it doesn’t hurt to at least try to sway policy makers in the U.S. all I can say is Good Luck!, I wish you well. Your message might make it into the brains of a few.

  3. ArcticGrayling

    @ schubert………..

    I have definitely reassessed KGB colonels, retired or otherwise. I have no doubt that it would not be a good idea for anybody living in Russia to have Mr. Putin pissed off at him/her. However, I do respect the man. He was absolutely right to stand off Obama against military action in Syria.

    I also think that FATCA had something to do with Harper refusing to commit our forces to it.

    What I find amusing is that any military action by the United States would pit them against China and Russia as adversaries. To fund any military action, Obama would probably have to clear it with his Chinese bankers first. Otherwise, he wouldn’t have the money to fund it. Sarah Palin said she could see Russia from her front porch. Obama’s sycophants in the press ridiculed her for that. Do think think the anointed one could see his Chinese bankers from the Oval Office?

    Actually, China and Russia (both huge net creditor nations now) could bring down the United States without military action. All they would have to do is dump their US Bond holdings, and the the Americans would be done in a day.

    Note how Obama has supported the Al-Queda Sunni Muslim brotherhood in Libya, Egypt, and now in Syria. Notice how he rattled his sabre against Shia Iran. Has it not occurred to people that it’s because he is a Sunni Muslim himself? I am convinced that he is. He is doing the bidding of the Saudi Royal Family. His own half brother is connected to the Muslim Brotherhood. He is supporting the people who did 9/11. He should be charged with treason.

    @ the forum………..

    What about the idea a class action lawsuit? It seems that there is a big one going on over NSA bugging. I don’t think that the idea is so far fetched for us.

    http://www.thegatewaypundit.com/2013/06/rand-paul-seeks-10-million-signatures-in-class-action-suit-against-us-government-video/

    http://www.wnd.com/2013/06/nsa-slapped-with-20-billion-class-action-suit/

    http://dailycaller.com/2013/06/11/lawsuits-mount-against-u-s-government/

    Reply
    1. WhiteKat

      I think I will focus on suing my own government(Canadian) for now – should be more than enough ammunition for that.

  4. OutragedCanadian

    Okay, clicked on another story on that link, and I really don’t like this statement,
    “Mr. Jacobson was speaking as the two governments reported “significant progress” on their plan that aims to “thin” their border.”

    I want a THICK border between the United States of Arrogance and Canada, not a thinner one.

    http://news.nationalpost.com/2012/12/14/new-border-security-deal-has-made-canadians-americans-safer-and-better-off-u-s-ambassador/

    Reply

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