It is certainly remarkable that U.S. legislation has been accepted in Canada as having extraterritorial application. Canada is prepared to say okay. I do not know if this would be allowed if, say, Iran decided to pass legislation to say that anyone with an Iranian connection in Canada had to be treated differently than other Canadians.
In the case of the United States and this piece of legislation, it is based on the implementation of something called the Intergovernmental Agreement, or IGA. Obviously, the United States is our greatest trading partner and closest friend. This is nothing against the United States, but as a matter in principle of law, one nation’s laws do not apply extraterritorially to citizens of other countries. In this case, we have agreed, as though it were a treaty, to implement the IGA.
What is fascinating about this is that the United States does not treat it as a treaty at all. It has not been sent to the U.S. Senate for ratification. In other words, the U.S. does not treat it as a treaty. The U.S. treats it as sort of a clarification of previous agreements. However, it contains substantive new obligations for foreign countries, and somehow Canada feels that we are obligated to enforce it.
Not all experts in tax law accept that. There was a particularly useful submission to Finance Canada prepared by Allison Christians, who is the H. Heward Stikeman Chair in Tax Law at McGill University, and Professor Arthur Cockfield of Queen’s University. Together they have looked at this and have urged Finance Canada to slow down. They say that the steps we have already taken completely vouchsafe Canadian business and protect Canadian banks. We do not need to push FATCA through, and we certainly should not be pushing it through in an omnibus budget bill.
Their recommendation I think is worth reading into the record this evening:
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…we recommend that the government delay passage of the Implementation Act until: (a) the issues surrounding Charter protections, other taxpayer protections, and global cooperative efforts have been thoroughly studied and addressed; and (b) the U.S. government agrees to reciprocal treatment with respect to the tax information reporting system that has been unilaterally imposed on Canada. |
We are looking at a piece of legislation that imposes on Canada requirements that the U.S. does not have to reciprocate without a treaty having been ratified in the United States.
What are the implications for Canadians? Well, as I just mentioned, Professors Christians and Cockfield talked about charter implications. My office some time ago filed an access to information request. That is how Professor Peter Hogg’s constitutional advice to Finance Canada became public.
Professor Hogg’s letter, dated December 12, 2012, was advice to Finance Canada that what he saw in FATCA definitely violated the Charter of Rights and Freedoms, specifically section 15 of the charter, which says:
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Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination… |
This is clearly discrimination, and Professor Hogg went on is his letter to point out the following:
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There is no mechanism in the Model IGA whereby individuals who are suspected to be U.S. citizens would even know that their personal information was provided to the IRS. |
Further on in his letter, he puts it very strongly and clearly:
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In my opinion, the procedures mandated by this Model IGA [FATCA] are discriminatory in a way that would not withstand Charter scrutiny. These procedures effectively treat individuals differently, and adversely, based on immutable personal characteristics, specifically citizenship (whether or not acknowledged or desired by the individual) or place of birth. If Parliament were to enact legislation authorizing and permitting this type of differential and adverse treatment, the legislation would contravene the equality protections in section 15 of the Charter. |
That is not a tentative conclusion. It is an authoritative conclusion from the most respected constitutional law expert in the land. He wrote the book on constitutional law that I studied when I was in law school. He taught constitutional law to our dear late friend, Jim Flaherty. Jim claimed that he gave him an A, but we cannot verify that.
@ElizabethMay “has open invitation 2 play at @MapleSandbox anytime” http://t.co/B6GPWBYfyc Thx 4 fighting #FATCA.
@ElizabethMay continues #FATCA Fight in House of Commons. http://t.co/bKFbSBZxN3
Go Ms. May!
I know of 10 people voting Green instead of Liberal in Ontario election.
RT @MapleSandbox: @ElizabethMay continues #FATCA Fight in House of Commons. http://t.co/bKFbSBZxN3
RT @MapleSandbox: @ElizabethMay continues #FATCA Fight in House of Commons. http://t.co/bu6N4CTWk2
RT @taxpolblog: RT @MapleSandbox: @ElizabethMay continues #FATCA Fight in House of Commons. http://t.co/bu6N4CTWk2
Cross-posted this at Brock. Go Elizabeth!
Great to see you, Ms. May, and your opposition colleagues, united in an anti-FATCA march from the Finance Committee to the floor of the House. Way to go everyone – please continue to stand together and keep hammering away at this government! You are on the right side of history and have our full support!
Thank you for continuing to shed the light of truth on this disingenuous and darkly cynical administration. These skirmishes will surely grow into one of the greatest election battles in Canadian history – and Supreme Court Charter challenges. I can feel it in my bones. These Conservatives are finished.
RT @taxpolblog: RT @MapleSandbox: @ElizabethMay continues #FATCA Fight in House of Commons. http://t.co/bu6N4CTWk2
@Deckard and others: It will grow into one of the greatest Supreme Court challenges if we have the funds to do it.
If you haven’t donated yet, please do it today!
Many thanks again to Elizabeth May. She continues the fight against FATCA and reminds us that the FATCA/IGA legislation is unconstitutional. It protects the banks and not Canadian Citizens. I hope people continue to donate to our Charter Challenge fund.
Elizabeth, you have my vote. Your persistence will pay off for you and for us. Thanks for taking a stand.