Rights Being “Flushed Away” For FATCA: More NDP and Liberals in House of Commons

From Hansard June 5, 2014

Peter Julian (NDP) “Mr. Speaker Words fail me…

The worst part of this closure motion, this time allocation motion, is the provisions of the bill. We are talking about FATCA, whereby a million Canadians of American origin would simply be flushed away by the current government. They would have no constitutional protections, no privacy protections. Even though we pushed for them at committee, the government refused to adopt them.
Mr. Speaker, I have a question on Part 5 of Bill C-31, specifically on the issue of FATCA and its application to registered savings plans, RRSPs, registered education savings plans, and registered disability savings plans. Those plans have matching grants provided by the Government of Canada, funded by the taxpayers of Canada, that are intended to go to people with disabilities or to young people to save for their educations. Under FATCA, earnings from those deposits made by the Canadian government would be taxable by the IRS.

    Does the Minister of State (Finance) believe that this would be consistent with the intentions of those programs and that it would be appropriate for the Canadian taxpayer to be funnelling money to the IRS and the U.S. treasury?

    Second, has the government calculated how much money would be going to the IRS from the Canadian treasury as a result of FATCA and the provisions of this bill?
Kevin Sorenson (Conservative): Mr. Speaker, during question period and at other times FATCA has come up a number of times. I feel, though, that the member’s question was somewhat misleading, because as Canadians listened to that question, they believed that all Canadian taxpayers would now be forced to reveal their savings and their income to the IRS or to the United States. That is untrue.

    The member should know, and he does know, that the FATCA legislation was created and imposed in the U.S.A. It was enacted unilaterally to target American citizens living abroad in other countries, many of whom were Canadian citizens as well, many of whom have dual citizenship. As long as they continue to be American citizens, the United States legislation dictates that Canada must comply.

    Let me say this. Our former finance minister, Mr. Flaherty, was troubled by the original legislation brought forward by the Americans, and I know a lot of Canadians had concerns with it as well. That is why this government negotiated a better deal through an IGA, an intergovernmental agreement, that would prevent certain things from being revealed to the Americans. Those would be things like RRSPs, tax-free savings accounts, or disability savings plans. All those were not included because of Canada’s strong intergovernmental agreement with the U.S. on FATCA.
 Mike Sullivan (NDP): Mr. Speaker, the implementation of FATCA would have serious implications on children in the member’s riding.

    The implementation of FATCA, according to James Jatras, who was a former U.S. diplomat, would have the purpose of nullifying Canadian protections under the Bank Act, the Personal Information Protection and Electronic Documents Act, otherwise known as PIPEDA, the Canadian human rights code and, especially, the Charter of Rights and Freedoms.
    These people are not just resident Americans. At least a million of them are Canadian citizens. Many of them live in her riding.
 Claims that the personal data of Canadians would not be forwarded to the NSA and other intelligence agencies are laughable. Some of those persons are children.
    What would the member opposite like to suggest? The bill somehow does not protect the safety, security and personal information of these people, including children.
 

Jeff Watson (Conservative):  Mr. Speaker, I appreciate the member did not pay attention to my intervention, but I will try to answer his question on FATCA nonetheless.

    I will not speak to what the U.S. motives are in all of this. It is its own sovereign decision as to whether it wants to start looking at dual citizens abroad, for example, but I will say that if the government did not act, the U.S. rules would still be in place. In fact, they would be far more stringent than what is coming out as a result of an agreement we made on that particular issue.

    I think we have done some amount of service to dual citizens on this side of the border by doing the best we could to obtain an agreement, for example, that would exempt certain classes of investments altogether from consideration, so this is a marked improvement relative to what would have been in place had there been no agreement.

 
Jinny Jogindera Sims (NDP): We also have the government rushing to sign agreements. For example, it seems to have lost the concern it had around privacy issues when it was in opposition. Canadians care very deeply about the privacy issue, but once again we are giving away valuable information through the IRS and FATCA. The justification is that because the government may suspect someone could be doing something, it has a right to surveillance without any kind of legal right to do so. The attitude is, “We are the government, and we now have that right”.

 

16 thoughts on “Rights Being “Flushed Away” For FATCA: More NDP and Liberals in House of Commons

  1. @ George III

    The conservatives didn’t need to state that the 30% tax would be damaging, but I am sure they did anyway. It’s obvious to anybody with half a brain. Even somebody like Obama, who in my opinion may not even have half a brain, knew that it would be damaging to us, but he doesn’t care. He is a narcissist who hates anything that is remotely British. He hates us too. It has been obvious since early in his first presidency (from the way he has snubbed our PM). Ever since he had Churchill’s statue removed from Washington, I have held Obama in utter contempt.

    But you have touched upon something that may hold some sway. The Chinese have not signed FATCA. If Sarah Palin can see Russia from her front porch, O’Bungler can surely see his Chinese creditors from the Oval Office.

    In retrospect, I am sad that the Soviets lost the Cold War (I am also happy they didn’t win). But they were a counterweight to American power. I hope the Chinese step up to the plate now.

    By the way, by virtue of what statement of Obama’s are you suggesting that Obama is not after the wealth of the vast majority of Canadians? I am not saying that he is, but I have never heard any statement from him that he isn’t. He already after about a million of us, which shows already that he is a person devoid of principle.

  2. Hi, recalcitrantexpat,

    I think that you knew I would never let this go…

    Below is what I got from Roy Berg regarding what I was taxed on my son’s RDSP. Stephen Kish demanded that Mr. Keddy retract his statements re the RESP and RDSP not being taxed by the US IRS and got this reply: http://isaacbrocksociety.ca/2014/06/01/its-time/comment-page-7/#comment-1933250

    From: Roy Berg
    Sent: Saturday, May 31, 2014 7:06 PM
    To: caroltapanila
    Subject: Re: False and misleading statements at Finance Committee yesterday by Conservative MP Gerald Keddy

    Hi Carol
    Keddy is simply wrong. Yes you may post/publish my email.
    Thank you for asking my permission!

    Roy A Berg JD LLM (US TAX) | Profile
    Director, US Tax Law
    Student-at-law(AB)

    On May 30, 2014, at 1:57 PM, “caroltapanila” wrote:

    Good afternoon, Roy.

    You might be aware that yesterday Mr. Keddy in the Standing Finance Committee ….stated that “….RESPs and RDSPs… are not subject to American taxes…”
    http://parlvu.parl.gc.ca/parlvu/ContentEntityDetailView.aspx?contententityid=11861&date=20140529&lang=en

    Mr. Keddy, starting 35:37 re RESP / RDSP not taxed by the US, as well as “Citizenship” of children born in Canada to US parent(s)
    and
    answered by Mr. Rankin, starting at 38:46 re phone call with a Calgary, Alberta parent / human rights issue (re US citizenship for children born in Canada to US parent( s).

    My understanding (and that of tax experts e.g., BDO in the web etc. ) indicates that this statement is incorrect.

    See my link below from BDO Canada with tax information (March 2014) on RESPs for US persons in Canada.

    “…The annual income earned within the plan is taxable to the contributor parent for US tax purposes” etc.

    So…. BDO is making false statements? Keddy knows better…?

    http://www.bdo.ca/en/Library/Services/Tax/Documents/Tax-Bulletins/Tax-Consequences-for-US-Citizens-and-other-US-Persons-Living-in-Canada.pdf
    — and your reply to me below confirms this.

    May I please make your email to me public?

    Best regards,
    Carol Tapanila

    From: Roy Berg
    Sent: Friday, May 02, 2014 6:29 AM
    To: caroltapanila
    Subject: RE: US Taxes 2012 Carol Tapanila.

    The answer to your question is a bit nuanced.
    1. If the sponsor of an RDSP (or RESP for that matter) is a US person then (US person analysis of the beneficiary is irrelevant):
    a. The income generated by the RDSP is taxed to the US person sponsor currently as it is earned
    b. The grant is taxed to the US person sponsor when it is distributed to the beneficiary
    c. US person sponsor must file 3520A annually
    d. US person sponsor must file 3520 annually

    2. If the sponsor of a RDSP (or RESP) is NOT a US person, AND the beneficiary is a US person then:
    a. The income generated by the RDSP (RESP) is taxed to the US beneficiary currently as it is earned
    b. The grant is taxed to the US person beneficiary when it is distributed
    c. US person beneficiary must file 3520 annually (no 3520A)

    Neither RDSPs nor RESPs are covered by the Treaty.
    Roy A Berg JD LLM (US TAX)
    Director, US Tax Law
    Student-at-law(AB)
    Moodys Gartner Tax Law LLP | D 403.693.5120

  3. spelling above
    Think what to happens to trade, people who want to invest in USA and all the people who want to travel to USA, I guess no country want to admit that they will hurt a small minority to protect the vast majority . Of course this is better than what is happening In Europe.

  4. Artic Grayling the Liberal signed 1995 USA Canada tax treaty that recognized USA tax laws in Canada (CRA will only collect for non Canadian at time it occurred,) This was when no other country signed a similar agreement. It is important what happens to Chinese bank, if they do not sign up. The Canadian government will definitely not use the non withstanding clause, if a Supreme Court challenge is successful. They also may ask to repeal FATCA, if Chinesse bank do not sign up and no penalty. The thing I do not like about the Conservatives was that they should have said the 30% withholding would be devastating to the economy. Thing what to happens to trade, people who want to invest in USA and all the people who want to travel to USA, I guess no country want to admit that they will hurt a small minority to protect the vast majority . Of course this is better than what is happening In Europe.

  5. @ recalcitrantexpat

    The conservatives see the problem. Make no mistake about it. They see and they understand it. My own conservative MP told me so, in person.

    The brutal fact in all of this is that they have a gun being held at their head, and Obama’s government are the bandits.

    I am more inclined to blame the judge (i.e., the American electorate) who set the criminal free (as I am equally inclined to blame the criminal himself—-Obama) than I am to blame an out-gunned police force that is unable to contain him (Obama).

    I am also inclined to blame the mainstream media hallelujah chorus that gave us that narcissistic SOB.

  6. I don’t see what the Conservatives cannot see about the errors of FATCA. If they are going to go ahead and vote for it they should at least tell the truth or else admit that they are ignorant of the IGA’s contents. For the Conservatives to claim that Canada has carved out any kind of favored status for RRSP’s, RDSP’s, RESP’s, TFSA`s, RRIF`s etc. is wrong. These saving vehicles are only granted exclusion from bank reporting obligations. All of these registered savings plans are still 100% taxable to the U.S. person(s) holding them. The U.S. is indeed taxing the Bank of Canada and the House of Commons which legalizes these savings instruments for the purpose of building the Canadian economy.

    Mr. Roy Berg and Mr. Kim Moody can talk all they want about the fact that the U.S. has the right to tax its citizens as it so pleases but in the end they should be tax professionals and confess that U.S. citizenship taxation does undermine the sovereignty of Canada when it comes to managing its currency and economy. Fact are facts. I find it odd that neither Mr. Berg or Mr. Moody in any of their writings would address the misconceptions that Canada`s MP`s have with regard to the truths of U.S. taxation. I haven`t read anything by either of them where they tell the MP`s that the Canadian government`s contributions to the RDSP and RESP are indeed just as much subject to U.S. taxation as are the personal contributions of the Canadian individual taxpayer.

    I see a sad intellectual irony in the fact that when Russia was claiming sovereignty over all Russian speaking people`s in Crimea and neighboring states, that the West, including the U.S., was quaking in its collective boots. Everyone was talking about a violation of Ukrainian sovereignty and Russian interference in the internal affairs of a sovereign country. And yet when it comes to the U.S. and citizenship based taxation and the interference that such taxation has on the internal affairs of other countries where U.S. citizens are resident, everyone turns a blind eye and says it is America`s sovereign right. Duh!! Are the world`s leaders so dumb that they can`t see that the U.S. has articulated the very same principle that Putin has or that Nazi Germany did when it used the presence of German speaking people to invade the Sudetenland.

    The U.S. is using the presence of U.S. citizens outside of U.S. territory as a pretext for taking over the financial system of the world and making it to serve as its unpaid lackey tax collector.

    In the end the country that prides itself on being the richest nation on earth has become the world`s greatest welfare bum. Is that really any surprise.

  7. I appreciate the opposition members’ accurate and pointed statements about FATCA. The conservatives would be saying the same thing if they were the opposition.

    But make no mistake. Any party in power would have made the deal. Wind bag Trudeau was hardly even aware of FATCA, and never answered any queries or correspondence on it. The NDP can make all the noise they want, but the truth is that every single one of them, given the right to do so, would have voted for Obama. It is also a reality that those who have never been in power at the Federal level, and likely never will be, can say whatever they want.

    We have no more business criticizing the party in power than we would have in criticizing a bank clerk for handing over cash to a robber while being at gunpoint. We are the bank clerks just trying to make an honest living, and Obama is the thug doing the stick up. And even though I am financially supporting the court challenge, the reality is that we are, in effect, taking the bank clerk to court rather than the robber.

    More than any President since Johnson, that POS in the White House is making the United States a pariah state. As bad as Johnson’s actions and policies were, at least the media and enough of the American electorate were bright enough and motivated enough to take that SOB to task. Even expatriations were rare under Johnson. An American passport was considered something worthwhile to hang on to.

    Obama is a narcissistic thug, but the media, for fear of being accused of “racism”, gives him a free pass.

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