Will FATCA Cause Some of the Headlines We Read in 2015?

The final regulations for FATCA were released yesterday by the US Department of Treasury, and the IRS. If you’re interested, you can read all 544 abstruse pages at the links below.

As far as I can tell there is nothing unexpected in there and no good news. The United States still expects all foreign banks to comply with their law, even when it violates that country’s law. The US still expects our banks to pay huge sums to implement a foreign law, to administer a foreign law, and to betray law-abiding Canadian citizens.

I haven’t found any response or updated information from our Canadian government. The release of the final regulations led me to think about the potential impact of FATCA on Canada if our government does not protect its citizens.

https://www.federalregister.gov/articles/2013/01/28/2013-01025/information-reporting-by-foreign-financial-institutions-and-withholding-on-certain-payments-to

Or  http://maplesandbox.ca/fatca-final-regulations-are-out/

Could the following be some of the headlines we might see in early 2015?

Bankruptcies on the rise across Canada.
The Office of the Superintendent of Bankruptcy Canada has just released updated information. Bankruptcies in 2014 reached an all-time high of 117,258.  In 2011, only 81,636 bankruptcies were recorded.

Statistics shows an increase in suicides in the last two years
The latest release from Statistics Canada shows a large increase in the number of suicides in the past year. In 2014 there were 6,261 suicides in Canada, a 160% increase over 2009 when there were 3,890 suicides.

University enrollment across Canada is down
Peter, a 17 year old high school student in Winnipeg who will graduate this year, has no plans for university. ‘I’m hoping to maybe get a job as a welder, where I can earn a decent wage and maybe apprentice. My parents can’t afford to help me out with university because they’re trying to pay off this huge debt they owe to the IRS .My dad became a Canadian, like 20 years ago or something, but I guess the United States says he’s an American and fined him for not filing taxes and reports. Both he and my mom have taken second jobs, and I have to try and help out.’

According to Statistics Canada divorce is on the rise in Canada
According to a just-released report from Statistics Canada, the number of new divorce cases decreased by 8 per cent from 2006 to 2011, dropping steadily each year. The trend reversed in 2012, showing an increase of 4% in 2012, 8% in 2013 and 13% in 2014.

“Pet shelters inundated with abandoned pets, begging for donations
Record numbers of pets were admitted to pet shelters, according to the Canadian Federation of Humane Societies. Their recently released statistics show 185,232 dogs & cats admitted, compared to 133,675 in 2010 and 120,952 in 2008.”

ASCHA reports being overwhelmed by requests for seniors housing
The Alberta Senior Citizens’ Housing Association (ASCHA) has turned to the government for assistance. ‘We simply don’t have the housing available to fill all of the requests’, says a worker who asked to remain unidentified. ‘So many seniors have lost their homes because of FATCA and the fines levied against them.’

More families homeless in  2014
‘FATCA bankrupted me’ says a homeless 57 year old man. “I thought I was Canadian, but because I was born in the US, my bank reported me to the IRS, and I was fined for not filing taxes and reports on my bank accounts. I’m completely bankrupt, I’ve lost my job and I’ve lost my home. My wife left me and is living with our oldest son.’

Food banks experiencing severe shortage of food and donations are down                Food Banks Canada recently released their Hunger Count report for 2014. The report shows food bank use in the month of March.  There has been a general increase each year since 2008, when 675,735 people received food from a food bank. 2014 shows a dramatic increase.
2014: 1,721,658
2013: 987,238
2012: 882,188
2011: 861,775

Senior citizens displacing teenagers at Macdonald’s
A 23 year old manager at a Macdonald’s restaurant in Peterborough, Ontario says that most of his workers are now past retirement age. ‘Seniors are more dependable than teenagers, and recognize what good customer service is. I feel bad for them that they have to work so much longer, but frankly, the impact of FATCA on Canada’s economy has been a blessing in disguise for me.’

Department of Finance reports that the Guaranteed Income Supplement budget for seniors was spent in just the first 3 months of 2015.
The GIS provides a monthly non-taxable benefit to low-income Old Age Security recipients. An anonymous source says that analysts in the Department of Finance expect that the budget will be overspent by at least 350% by the end of 2015.

Bank tellers held hostage by distraught Canadian man bankrupt by US taxes              Today, a 48 year old man in Halifax held 3 bank tellers hostage for 4 hours before killing himself.  The bank had foreclosed on his mortgage and he’d been evicted the previous day. One of the tellers, a woman in her early thirties, although obviously shaken, displayed sympathy for the hostage taker. ‘He lost everything, because his wife was born in the US and lived there until she was 15. I guess she was fined hundreds of thousands of dollars by the IRS, and when she found out she committed suicide. He just couldn’t take it anymore and he snapped.’

Obviously, the above is all just my imagination at work. I’m still hoping that whatever intergovernmental agreement our government is negotiating with the US, Canadian citizen’s finances, privacy and rights will still be protected. If they don’t, we might actually be seeing news stories similar to the ones I’ve conjured up.

 (also posted on www.outragedcanadian.ca)

11 thoughts on “Will FATCA Cause Some of the Headlines We Read in 2015?

  1. Pingback: Will FATCA Cause Some of the Headlines We Read in 2015 … | Investors Mauritius

  2. @Outraged and Others:

    I think you are right about no apology, but we can still hope the rest comes true.

    If my two above scenarios don’t come true, here is my prediction for another headline. Unfortunately, because the courts work slowly, it will take too long.

    Again, this is a forecast only. It is part fantasy and part fact.

    CANADIAN SUPREME COURT STRIKES DOWN FATCA

    In a landmark unanimous decision today, the Supreme Court of Canada struck down the Foreign Attack To Control Act (FATCA). This upheld numerous decisions made on FATCA in lower courts across Canada.

    In its decision on Blaze, Outraged Canadian, et.al, vs Government of Canada and Canadian Bankers Association, the justices ruled FATCA is a clear violation of Section 15 of the Charter of Rights and Freedoms.

    “All Canadian citizens and residents are equal under the laws of Canada regardless of their national origin, citizenship or place of birth.”

    The decision was a victory for Canadian citizens and residents born in United States of Arrogance and their Canadian-born children. It was also a relief to Canadian snowbirds, whom International Robbery Society has deemed “US persons” because of their “substantial presence” in southern US states for a few months each winter.

    “We believe this case would never have reached the courts if such demands had been made of Canada by governments of Eritrea, China, India, Pakistan, Mexico or Iran. It is deplorable that the Canadian government did not provide the same protection to Canadians against the foreign government of the United States of Arrogance,” wrote the justices.

    Canadians affected by this extraterritorial overreach of the US into Canada joined together with the Canadian Civil Liberties Association (CCLA) to mount the Charter Challenge. They were represented by two prominent constitutional lawyers.

    After the decision, one of those lawyers stated “We were confident from the beginning this case would succeed in favour of our clients. FATCA is an egregious violation of Canadian banking, privacy, human rights and Charter equality rights.”

    The other added. “This was a clear-cut case. It should never have been brought before the courts. It should have been resolved by the Canadian government when US first introduced FATCA. A foreign government has no right to set laws for Canada. This decision confirms Canada is still an
    independent democracy with a Charter of Rights and Freedoms that is a model for the world.”

    In their decision, the Supreme Court referred to two earlier decisions regarding attempts of IRS to gain jurisdiction in Canada.

    In USA v Harden (1963), the Supreme Court of Canada stated “A foreign State cannot escape the application of the rule that in no circumstances will the courts directly or indirectly enforce the revenue laws of another country.”

    In the FATCA decision. Supreme Court justices concluded that decision five decades ago still holds in Canadian courts now.

    In TD v Van de Mark. (1989), the High Court of Justice stated “The dispute, if any, is between the bank and the Internal Revenue Service of the United States.

    “The effect of what has occurred is that a Canadian citizen has placed assets in a branch in Canada of a Canadian chartered bank. The bank also does business in the United States and is being threatened by a United States authority.

    “One must sympathize with the position of the bank but that position is the result of its election to carry on business in more than one country and that cannot influence the application of Canadian law.”

    The justices found that standard applies to FATCA and the attempts of IRS to threaten Canadian banks and their Canadian customers in Canada.

    Blaze of Maple Sandbox said “I never doubted that we would win.”

    Blaze’s colleague Outraged Canadian lived up to her name. “I am outraged our government has put honest, law-abiding people through this for the past several years. This has taken a huge toll on Canadians born in US, their spouses, families, finances, careers, retirements and health.

    “I hope we can now move on and return to positive customer relations with our financial institutions free from intrusion of a foreign government.”

    Canadian Bankers Association and Canadian government officials were not available for comment following the decision.

    The Supreme Court awarded legal costs to the appellants.

  3. Following the above announcement in House of Commons, I look forward to a news release from Ministry of Finance to media across Canada.

    (Disclaimer Number 2: This again is a fabrication, but one which I hope will become reality because it is inspired by true facts).

    FOR IMMEDIATE RELEASE
    Ottawa, Ontario
    January 25, 2012

    CANADA SIGNS IGA PROTECTING CANADIANS FROM FATCA

    Canadian and American governments today announced an Intergovernmental Agreement (IGA) for the Foreign Attack to Control All (FATCA) of the United States of Arrogance.

    The IGA recognizes the long-standing effective tax treaty between Canada and US to combat tax evasion.

    As a result, the two nations concluded nothing further is required of Canada on FATCA. Canada and United States will continue to exchange information on each other’s residents, but Canada and Canadian banks will not provide any information to International Robbery Society (IRS) on any Canadian citizen or resident living in Canada.

    In addition, the IGA reconfirms that Canada Revenue Agency (CRA) will not collect any FBAR penalties for IRS on any Canadian citizen or resident and will not collect any tax liability for IRS on a Canadian citizen.

    Finance Minister Jim Flaherty advised he was pleased at the outcome of the long negotiations. “I hope Canada’s long-standing agreement of reciprocity to combat tax evasion will be used as a model by other countries to share information based on residency, not based on
    citizenship.

    “We are happy the United States at long last has recognized what we have been saying.

    “Canada is not a tax haven. People do not flock to Canada to avoid paying taxes.”

  4. I would love to see this headline and story appear in Canadian Press stories across the country soon.

    (Disclaimer: At the present time, this is fiction, which I hope may become reality.)

    FINANCE MINISTER: USA “WILL NOT FATCA CANADA ”

    After months of silence, Finance Minister Jim Flaherty stood in the House of Commons today and said “Canadian banks must adhere to Canadian laws. Canadian laws will not be changed to accommodate demands of a foreign government. FATCA is an extraterritorial overreach of the United States into Canada. It won’t be tolerated.

    “United States will not FATCA Canada.”

    Flaherty’s announcement was followed by Foreign Affairs Minister John Baird. “We have now told the United States clearly and firmly ‘Canadian laws are made in Canada, not in Washington.’ We hope other governments around the world will follow our Canadian example and resist the attempt by the United States to force other countries to comply with their demands through financial terrorism.”

    Citizenship and Immigration Minister Jason Kenney assured Canadian citizens and residents who were born in U.S. that they have the same rights and entitlements as all other Canadians. “There is no such thing as a second class Canadian citizen.”

    These announcements came after more than a year of intense lobbying by patriotic Canadian citizens who were born in the United States.

    Canadian Civil Liberties Association late last year also prodded the government to uphold Canadian laws and the Charter of Rights and Freedoms.
    `
    A turning point in the government’s inertia came with the FATCA Forum held in Toronto in December.

    Leaders and members of the Opposition applauded these announcements in Parliament. They later issued a rare joint statement.

    “We apologize to Canadians for having been silent on this issue for the past year. Through our silence and inaction, we failed in our responsibility to ensure the Harper government protected the rights of Canadians.”

    Blaze of Maple Sandbox said “It’s about time. What took them so long?”

    Blaze’s colleague Outraged Canadian agreed. “This announcement has taken far too long. The past two years have been a nightmare for Canadians of American origin while our government did little to reassure us our personal financial information would not be released to a foreign government.”

    No one from Canadian Bankers Association was available to comment. Officials in Washington did not return our phone calls.

  5. @Outraged: I think you’ve turned into your mother.

    Certainly, people are under intense stress, marriages are strained, health has been affected and some people have even contemplated suicide. However, as bad as FATCA seems, it’s important we remember Canadian banks have no legal authority to ask for our place of birth and doing so violates Canadian law.

    We have had no indication Canadian government is going to change anything. Even Schubert (who is a strong opponent of our current government) does not think it’s likely they will sign away our rights. (See his most recent post under FATCA Final Regulations.)

    For now, we need to have confidence our government will not turn on us in the way the Swiss government and some in Asia, South America and Europe have done.

    As scary as FATCA is, I don’t think we will have a similar nightmare in Canada, so I hope we don’t read your headlines now or in the future.

    I will post below some headlines which I would love to see.

  6. @OutragedCanadian I doubt that the effects of FATCA will be sudden, but will come in waves as each bank weeds out USPs. But your imagination is suitably vivid. 1 Million out of 35 Million+ in Canada represents at least 2.8% of the Population.

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