NDP's Nathan Cullen Slams Cons

FATCA

WOW.  When you read what Nathan Cullen said yesterday in the House of Commons, you could conclude he has been hanging out at Sandbox or Brock.

 Now, let us get to the bad things that are in Bill C-31.

 

     Let us start with the first one, FATCA. What a great deal it is that is buried in this bill. One would think that something like a major tax treaty with our most significant trading partner would have stand-alone legislation and its own debate. That is not so with the Conservatives; they bury it. When they bury something and they release it, as they did on a Friday afternoon when they released this bill, one can anticipate that there is something they do not want to talk about. We estimate that more than one million Canadians may be affected by this tax treaty. They are Canadians who do not even know they may be implicated by this by being married to an American or former American. They are Canadians who were born to American parents. Canadians who were born here may be implicated by this.
 What this deal would do is to tell the banks in Canada to release the private personal banking information of those Canadians to the Canada Revenue Agency, which then ably and quickly would pass it along to the IRS in the United States. Passing the private banking information of more than one million Canadians to the U.S. government somehow does not seem to bother the Conservatives. There were no consultations with the Privacy Commissioner. They told the Privacy Commissioner it was happening, but did not bother to find out if it went against privacy laws in Canada.

 

    We do not know if this is even charter proof. Constitutional lawyers have said that this is a mistreatment of Canadian citizens and it will face a charter challenge. Again, there were no charter questions. The banks have estimated that to collect this information may cost upward of $100 million. Some have already spent tens of millions of dollars; it is hard information to get at. We asked the government how much it would cost it to wade through these millions of documents and pieces of banking information, and the government said it had no estimate, that it does not know what it is going to cost. The banks have said it would cost upward of $100 million per bank.

 

    The federal government signed this treaty and did not bother to find out what it might cost the Canadian taxpayer. In addition, there is no reciprocity. There is no agreement with the U.S. to have some sort of equal treatment of Canadians. Canada is not a tax haven for American money. It has never been described as such. Why institute a tax treaty to go after tax cheats and tax havens that do not exist? Why forego the privacy of so many Canadians?

 

    What fight did the Conservatives actually do? The Minister of Finance wrote an op-ed. He did, and it was strongly worded. He put it into a couple of papers in Washington, and that was it. Compare that with the government having spent millions of dollars toward lobbying the U.S. government on Keystone. It has spent millions on a full-scale frontal attack. The Prime Minister said that if the U.S. does not agree, this is a no-brainer, and we will wait the president out. Was this all that could be done in diplomacy?

 

    We spent millions, and are spending millions of dollars on diplomats running around Washington trying to convince the Americans to create 40,000 jobs in the U.S. to add value to the bitumen coming out of the oil patch in Alberta. Who came up with that number? The Canadian government did, when trying to convince American legislators. Compare that full-on assault in trying to convince people in Washington to do something, to an op-ed, when they were standing up for Canadians’ rights. It is a no-brainer. This is bad policy to sell out Canadians at such a cheap level.
Then, Ted Hsu asked:
 As the member mentioned, there were a couple of things that the government did not do that it should have done: first, to perhaps ask the courts whether an intergovernmental agreement that was being negotiated would violate the Canadian Charter of Rights and Freedoms; and, second, to get an official comment from the Privacy Commissioner as it was negotiating with officials from the United States.

    I think the government could have done a better job of protecting the rights of Canadians, and I would ask if my colleague would like to comment on that.
Mr. Cullen replied:
Mr. Speaker, do members remember that old slogan that the Conservatives used during one of the campaigns, “Stand up for Canada”? Was that the first campaign? It has been so long, I suppose, that they have forgotten what “Stand up for Canada” actually means. Both on the side of pushing back and negotiating a deal that protected Canadians’ privacy and rights, they have capitulated entirely. Canada was one of the last G7/G20 countries to sign the deal with the United States. It is always a good sign when we are last up with our most significant trading partner.

    This is the “ready, fire, aim” government. It puts it in place, and then after the fact says “This is a privacy issue, and perhaps we should check with the Privacy Commissioner. We’ll do that later” or “Perhaps this might be unconstitutional. We have a whole bunch of lawyers here in Ottawa paid for by taxpayers, and they are constitutional experts”.

    These guys are trying to run them out of work. They do not ask them anything, especially when dealing with something so fundamental as our constitutional rights.

    “Stand up for Canada”; what a fascinating idea. They should perhaps dust off those old pamphlets from that election and actually do what they said they would do.

 

18 thoughts on “NDP's Nathan Cullen Slams Cons”

  1. VOTE ABC in your riding in the next election. Vote Anyone But Conservative. The Anyone should be the candidate best-placed to defeat the Conservative, especially if you’re in a riding currently held by the Conservatives.
    The rationale for this is stark and simple. Read the Hansard debates yesterday and today, all the opposition comments on FATCA not just those by Cullen (which are arguably the best ones) but also those by several Liberal MPs as well as Elizabeth May who also weighed in, then read the Conservative replies. Which basically boil down to, “we had to do this to protect the banks.” The banks are more important than the Charter and privacy rights of a million Canadians. And (in the Tories’ view) this issue isn’t worth debating separately from an omnibus budget bill, even though the IGA has nothing to do with the budget, except for the fact that, as a couple of opposition MPs noted, the government has no clue and did no study of how much it will cost the government and hence taxpayers, never mind the banks, to comply with FATCA. And thus the Conservatives exhibit proof that even the Tory-vaunted economic “expertise” and “wisdom” of Flaherty (not to mention the non-existent credentials of Harper as a real economist) are a sham and a joke. What kind of Finance Minister or Prime Minister surrender our sovereignty at all, but not even with any serious costing of what “saving” the banks will cost Canadians and taxpayers?
    ALL THREE opposition parties have performed in a sterling manner in raising FATCA in Parliament the past two days. You can safely support any of them in your riding, to oppose FATCA, but support the one best positioned to crush the Tories in your particular riding. If ever there was an election to justify “strategic” voting, 2015 will be the one. Even more so, IMO, than the 1993 election (in which the previous incarnation of Conservatives were all but exterminated through strategic cross-over voting, in which I participated that one time).
    There are plenty of good reasons to turf this government out on their butts, in fact to exterminate them politically, but the FATCA IGA and the omnibus attack on parliamentary democracy are both stellar reasons IMO.
    And on the subject of Nathan Cullen, NDP Finance Critic (since a couple of weeks ago):
    the reason I joined the NDP a couple of years ago was to vote in the leadership race. Nathan Cullen was then, and has remained, my first choice in the preferential ballot, over Mulcair (who I ranked second). Cullen came in third, was the only leadership candidate who advocated during the debates that the NDP form strategic alliances with the Liberals in those ridings where the Liberals have a better shot of taking away the seat from the Tories than do the NDP (per my ABC comment in the previous paragraph; this is one of the reasons I voted Cullen as first choice). Cullen also was the only NDP leadership candidate who got elected to Parliament by actually defeating a Conservative incumbent (my other main reason for voting for him), and IMO in his comments in Hansard the past two days he has already shown he’s a better Finance Critic for the NDP than Peggy Nash (also a leadership candidate) ever was. He’s someone to watch closely, especially if Mulcair stumbles or blows the next election. And he’s a hell of a more impressive speaker than my MP Paul Dewar, another also-ran for the leadership (and my fifth-ranked choice).
    I still would rather have Cullen than Mulcair as NDP leader, for a lot of reasons, not least of which Cullen is quite fluent in French though from BC, and he’s not a dual Canadian-French citizen, and frankly after Ignatieff (boy did Canada dodge a bullet there in the last election!) I have no interest in a Prime Minister, nor Opposition Leader, who isn’t 100% committed to Canada and to no other country.

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  2. I’m planning to be at Finance Minister Joe Oliver’s talk before the Canadian Club — at the Royal York Hotel in Toronto, on Monday, April 7, 1pm. I will be holding a sign that reads
    Why is a U.S. Law (FATCA)
    HIDDEN
    in Canada’s Budget Bill??
    I hope some others can join me. I plan to get there early.

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  3. Here is an exchange between Elizabeth May and Nathan Cullen:
    Elizabeth May:

    Mr. Speaker, I want to thank the hon. member for Skeena—Bulkley Valley for raising the fact that one of the larger offences in all of the last number of years of omnibus budget bills is buried in this omnibus bill. This complex piece of legislation should never be put in an omnibus bill.

         I have previously mentioned to the House Peter Hogg, one of Canada’s leading constitutional experts, who warned the Minister of Finance that this bill would violate the Charter of Rights and Freedoms.

        I also want to draw the attention of the House to the opinion of Allison Christians, who is the H. Heward Stikeman chair in tax law at McGill, and Arthur Cockfield, a professor at Queen’s University. I want to put their opinion on the record:

        The proposed Implementation Act and the IGA do not enhance the reciprocal tax information exchange between the United States and Canada, nor do they create a workable regime for Canada to enhance its international tax enforcement efforts going forward.

        Further they state:

        Instead, the Implementation Act and the IGA raise a number of serious issues ranging from likely Charter violations to violations—

    Nathan Cullen’s response:

    Mr. Speaker, the challenges will come, and the courts will be seized with this.

        This is such a bad way to run government. The Conservatives spent a quarter of a million dollars on the Nadon appointment to the Supreme Court and then had to go back and undo it, for the first time in Canadian history.

        These things matter. Things like the Constitution actually seem to matter. Lo and behold, the Conservatives are finding that. On tax treaties, privacy rights will matter and constitutional rights will matter…


    Mr. Speaker, there are many complex aspects of this omnibus legislation. Certainly, even the title, FATCA, foreign accounts taxation and compliance agreement, is one of the most complex.
    It certainly would, as the hon. member stated, affect people who have no idea whatsoever that they could be caught in this broad ambit of people who are considered U.S. persons, people like me who were born in the United States but have nothing to do with the United States, who in my case has never lived there as an adult, but purely as a Canadian citizen and renounced U.S. citizenship.
    This could apply to me, or my daughter. Then the information is handed over to the IRS without our knowledge.
    Now, I want to draw attention to the charter argument, specifically section 15 of the charter, which says “Every individual is equal before and under the law…”. As my hon. colleague mentioned, the leading constitutional law experts of Canada have said that this will violate the charter.
    So, as with other legislation, it will get pushed through this place. As in the case of the Nadon appointment or with some of the mandatory minimum sentence laws that were passed, we have clear evidence that we are being asked, as parliamentarians, to push through a piece of legislation that would be offensive to our fundamental rights of equality under the law, under section 15. I ask for the member’s comments.

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  4. From Liberal Finance Critic Scott Brison:

    The bill also includes new rules around FATCA, the U.S. Foreign Account Tax Compliance Act. Under the bill, Canadians effectively are going to be doing the dirty work and becoming tax collectors for the IRS. Canada-U.S. dual citizens are going to be punished if they do not provide their U.S. tax number to the CRA.

        If these Canadians provide their U.S. tax numbers, the Canadian government will hand over all this information, together with information on the Canadians’ bank accounts, to the U.S. This will help the U.S. collect tax on registered Canadian savings accounts, including RDSPs, registered disability savings plans; RESPs, registered education savings plans; and tax free savings accounts.

        The other night when we were at the briefing by the Finance Canada public servants, they could not answer a very simple question, and that was whether the contributions made to RDSPs and RESPs by the Canadian government as matching grants would be considered taxable by the Americans. They could not answer that basic question.


    The Conservatives want to actually turn Canadians into American tax collectors through this budget implementation bill. Earlier this year, when the Conservatives signed an intergovernmental agreement with the U.S. to implement FATCA, we had hoped that some of the concerns we had would be addressed.
    Canada and the U.S. had previously achieved an agreement to exchange information on suspected tax cheats, but FATCA goes a step further than any other tax-sharing legislation has. It requires Canadian banks to give the CRA the account information of every U.S. citizen living in Canada. The CRA will then give this information to the IRS, and those U.S. persons will have to file taxes in the U.S.
    The problem is that there are many U.S. citizens living in Canada, and they do not even know that they are considered Americans for tax purposes. These include any person born in the U.S. or born to an American parent, even if they have not lived in the U.S. since they were toddlers. The Canadian government has agreed to help the IRS find these individuals.
    This will also affect Canadians who are not even U.S. citizens but are married to one, because their joint accounts will now be reported to the IRS. This is a remarkable breach of Canadians’ privacy by their own government. Not only will the CRA provide the IRS information with tax identification information and the account balances of U.S. persons without their knowledge, it will impose a $100 penalty for each instance of non-compliance. Why are Conservatives prepared to do Uncle Sam’s work in this case and potentially penalize Canadians with dual citizenship or their Canadian spouses?
    U.S. persons living in Canada would be required to report and pay taxes to the U.S. on their RDSPs and RESPs. These accounts are supposed to help Canadians pay for education or help disabled Canadians avoid poverty. The Canadian government money was not intended to be used to subsidize the U.S. treasury. Why are the Conservatives allowing this to happen, when it so clearly is inconsistent with the objectives of RDSPs and RESPs?
    The other night, as I mentioned earlier today, we asked the public servants at the briefing whether Canadian government contributions, the matching grants to RESPs and RDSPs, would be considered taxable by the Americans, by the IRS. They could not answer the question. The idea that we would sign an agreement when we do not know something as basic as this speaks to the way the government has lost influence, power, and authority in negotiating with the Americans.
    The FATCA agreement is very important, and it should be a stand-alone piece of legislation. We should be doing a more thorough evaluation of the agreement the government has signed, and it should not be part of a budget implementation bill, an omnibus bill. Constitutional law experts such as Peter Hogg have raised concerns about whether the agreement violates the Canadian Charter of Rights and Freedoms. There are real issues around this that will be given short shrift through the process by which a budget implementation act, which is such a massive omnibus bill, has been given to Parliament.

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  5. I don’t know what you will hate the most in Kevin Sorenson’s answer on behalf of the Cons.  1.  We are American citizens abiding in Canada or 2. Again, FATCA is a policy that is here basically to  safeguard Canadians.  How can anyone actually say these words?!?

    From Kevin Sorenson for the Finance Minister:
    With all due respect, the opposition brought forward concerns regarding the FATCA agreement, which this member has talked about, and there are many people across Canada who are questioning exactly what FATCA is. Let me say that the agreement addresses those concerns.

        The agreement addresses the concerns that Canadians had when the United States imposed certain regulations based on the treaties it has with many different countries. Consequently, this government responded very quickly and negotiated a very solid intergovernmental agreement, or IGA, with the Americans. It is an agreement that relies on the existing tax framework under the Canada-U.S. tax treaty.

        CRA will not assist the Americans, it will not assist the IRS, in collecting U.S. taxes. Also, there are no new taxes being implemented through FATCA, and no new taxes that Canadians need to worry about. In our negotiations, we obtained a number of significant concessions that would not normally have been included, such as not including RRSPs in disclosure, not including RDSPs, not including tax-free savings accounts, and many others.

        Again, FATCA is a policy that is here basically to safeguard Canadians…

    On this FATCA, without an agreement in place our financial institutions would still have had to comply with FATCA. That is the problem. It is not whether or not our financial institutions would have had to comply with the rule of law dealing with those American citizens who are abiding here in Canada. Every financial institution in Canada, except the very small ones, would have had to comply with the Americans, and if they did not, there would have been huge consequences to their being involved in the United States, to their activity in the United States. It would have required banks to report information to the IRS. Canadian banks would have been reporting to the IRS.
    The agreement we were able to negotiate says that those financial institutions can disclose information on American citizens living in Canada and their finances to the Canada Revenue Agency, which is then responsible for moving the information forward.
    If that had not happened, banks would have had to deny basic banking services to clients. That is one of the major concerns that banks had, that they would in effect have to say no to American citizens or those who may be dual citizens, saying that they could not do business in Canada.

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  7. @Outraged:  That is language we don’t usually hear from you in the Sandbox. Are you “outraged?”

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  10. I guess I’m getting a little worn down. I so admire you Lynne, and Carol, and Stephen and so many, many more who manage to keep up your fighting spirits. I’m NOT giving up, but every once in a while bitterness boils to the surface and escapes.
    I’m TIRED of worrying that my personal business will be reported to a foreign government that I actually am appalled about. Not sure if I’d have the same sheer level of outrage if it was going to be reported to the UK, where my ancestors are from. Okay, yes, I would, but I might not have the same level of fear.
    I’m tired of worrying that my bank accounts will be closed.
    I’m tired of worrying that the IRS is going to try to penalize me with fines that I can’t possibly pay.
    I’m tired of worrying that I will lose my mortgage and end up homeless.
    I’m tired of worrying about the cowardice of our elected government.
    I’m tired of worrying that I’m about to become a second class citizen in my own country.
    I’m tired of worrying.
    On the other hand,
    I’m GRATEFUL that there is such a core of outspoken, dedicated, ethical, caring people who are helping me get through this.
    I’m GRATEFUL that there are regular folks and even politicians who are determined to expose what our government is doing to us.
    I’m GRATEFUL that there are lawyers, and legal experts, out there who actually care about our constitution.
    Most of all, I’m grateful that I have a place where I can rant and rave like this and not have people look at me like I’m insane.
     

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  11. Excellent comment, outraged.
    One does grow weary and I know I have an ebb and flow. Something in me will not let me let this go — I think it is my son’s well-being after I have departed this world.
    That this is happening to us is bizarre. I want others to agree — as it may be their rights gone next.
    Best from me — let’s get together for coffee one of the next times you’re in to the “Big Smoke”.

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  12. What I didn’t realize after watching Peggy Nash’s video was, that was it. No chance whatsoever of a debate. I really know nothing about how Parliament works. Is it some sort of procedural thing about what happens when? I don’t understand how they can so blatantly stifle response and get away with it.
    I tweeted every Con who has Twitter and told them they would pay a price for this. I heard back from two. One told me the US taxes on citizenship (newsflash LOL) and how they had negotiated exemptions on my behalf. (!) Just assuming I was a USC. She did offer to have a staffer call and explain it to me, which was more of a response than would expect but honestly…THEY are the ones who don’t get CBT. So I decided to see if they would bother to check out/respond to the fact that gov contributions to RESPs/RDSPs are taxable by the US. Should rile any normal-blooded Candian I would think. Of course, no response. Presume they can’t think past the difference between exemptions in the bank reporting and the requirements of an individual to file with the IRS. And that they think I am the stupid one.
    The other one told me flat out that I should try to understand the situation a little better. Rather than focus on details I decided to ask what I have actually wondered about from the beginning. Why didn’t Flaherty phone up some of his counterparts in the EU or even China and see if they could come up with some counter measure ? Plus no cost analysis, no consultation with the Privacy commissioner and no consideration of Charter violation even after advice from Peter Hogg that the IGA was unlikely to withstand Charter scrutiny? I also asked about NAFTA and WTO. His response? It was clear from my tweets that I don’t understand and to look into it a little further. Doh? Ironic- everyone will tell you the way things really work is deals made behind the scenes but if you bring that up, they then say you are naive. Who makes deals with the enemy? Who is naive here? Willing to bet this guy also has no clue about CBT whatsoever. Every single Conn MP ought to be sitting at the ACA debate on May 2. And we should hound those damned Cons until election day that we are not going to let them forget and will do all we can to get them defeated for this betrayal. Livid, furious!

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  13. @nobledreamer,
    “Presume they can’t think past the difference between exemptions in the bank reporting and the requirements of an individual to file with the IRS.”
    Exactly. It was hard enough for us who might be affected to understand the implications of U.S. CBT. So I suppose it shouldn’t be a surprise that Canadian politicians with no US indicia wouldn’t understand. It’s like the “Why not just file the paperwork?” response that some of us have gotten from the uninformed who have no idea of the costs involved.

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  14. NDP’s Peggy Nash spoke out against FATCA again yesterday. This from Hansard:

    I also want to raise the issue of FATCA. This may be something the majority of Canadians do not know much about, but for Canadians who hold dual Canadian-American citizenship, the bill is very troubling. An entire bill about FATCA is enclosed in this omnibus budget bill. It would impose the Foreign Account Tax Compliance Act amid questions in the United States about the constitutionality of the act. However, the government does not seem to care if FATCA would be found to be unconstitutional because it is not bound by the U.S. Constitution. It is one of the only governments happy to give out the private details of its citizens’ financials. In other words, Canadians’ private banking information is to be made available to the U.S. for tax reasons to comply with—wait for it—American law. The bill would give the Minister of National Revenue the power to make any regulation necessary to carry out this highly controversial act.

        

    It is entirely inappropriate for the government to present this legislation by burying it in an omnibus bill with time allocation so that we do not get adequate time to study and debate this bill within a bill. The government is just hoping Canadians will not notice, but I suggest that Canadians are taking notice and are very concerned about these tax changes.


    From NDP Mike Sullivan

    Mr. Speaker, on the issue of FATCA, there are probably hundreds of thousands of accidental American citizens who will also be found in this great schism of sending their data to the U.S.
    Those are the children who were born in Canada, who have never lived in the United States, who have never been a United States citizen, who the U.S. is now declaring are United States citizens as a result of their parents having been American. Those children would now be subject to having their banking information sent to the U.S.
    It would create a divide. Two children born on the same day in the same hospital in Canada, one with American parents and one with Canadian parents, would be treated differently. Maybe the member would like to comment.

    Back to Peggy Nash:

    Mr. Speaker, there are all kinds of people who are just discovering that, in fact, they hold dual Canadian-American citizenship; and the member is quite right that even if they have never worked in the United States, the fact that they are American citizens because they hold dual citizenship scoops them into this net of FATCA.
    My office has been deluged with calls from concerned citizens since this initiative by the U.S. was first announced. We do not believe that the government has effectively protected the interests of Canadians.

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  16. Now John Rafferty of the NDP is accusing the Cons of Stuffing More Garbage Legislation with FATCA.
    Mr. Rafferty calls FATCA “a monstrous invasion of privacy of one million Canadians” and a “colossal failure of leadership” by the Harper Government.
    @Stephen Kish/IRS Compliant Forever:  Tell me again who voted for the Cons for decades.  Tell me again how you will vote in 2015. Or in Ontario on June 12.

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