I have posted below the text of an email that I sent to the opposition parties and the Canadian Civil Liberties Association yesterday. I think the contents and arguments are self-explanatory.
I would urge everyone to write their MPs about this issue. Pay attention to the reply you get, or whether you get a reply. No MP, and no political party, that doesn’t even understand the concept and importance of due process (not to mention failing to understanding concepts of national sovereignty and citizens’ privacy rights), deserves your vote in the next election, nor deserves to sit in our House of Commons. In my opinion at least.
I am writing to express my extreme concern at what I see is an unacceptable lack in the recently-announced FATCA agreement and Finance Canada proposed regulatory and legislative changes, for real due process or indeed “due diligence” (to borrow a phrase) on behalf the “reportable” account holders, who are Canadian citizens and residents and entitled to reasonable due process IN CANADA.
The agreement and draft regulatory/legislative changes are clear on what our financial institutions are “required” to do, are “not required” to do, and “may” do. That is not good enough in my opinion. There is no guidance on what they “may not” or “should not” do. Nor is there any requirement that all reportable account holders consistently be given reasonable notification BEFORE THE FACT that their accounts are about to be reported to a foreign government, the specific reasons why their accounts are deemed reportable, and an opportunity to contest those reasons, with appropriate documentation, in a reasonable time frame, if they believe the reasons are wrong or inappropriate.
These lacunae are unacceptable to me as a Canadian citizen who believes in due process not only before the law, but also before corporations and government bureaucracies in matters such as FATCA that have the potential to devastate an account holder’s finances and/or result in significant amounts of time and expense in litigation over wrongful actions.
There is a strong possibility, I would even suggest likelihood, that inappropriate reporting will take place, given that the wording of the agreement and the Finance Canada information for individuals on their website. I see in these documents NO evidence of an attempt being made to ensure that all FFIs are asking the same questions, following the same processes, or ensuring that their employees who are interpreting the indicia have a clear, correct and consistent understanding of what those indicia mean and how they will be applied. Nor any consistent and independent options for oversight of and, if necessary, challenges to the application of the indicia.
No Canadian can be extradited to another country on the basis of an extradition warrant under an extradition treaty, before there has been a court hearing in Canada at which (s)he and her/his lawyer have an opportunity to examine the basis for that warrant and challenge it in front of a judge under Canadian law. I am not suggesting there needs to be a court review of reportable accounts, but I am suggesting that CRA absolutely MUST provide some reasonable before-the-fact opportunity for the account holder to review the basis for reporting the account to a foreign government and to challenge this reporting IN CANADA if they can. I would not trust hundreds of financial institutions to be responsible for this on their own. That would only compound the problems of consistency, and would be inefficient and overly expensive to the institutions, relative to centralizing this process.
There are too many opportunities under the current agreement and proposals for mis-reporting of non-reportable accounts by error, by misunderstanding, or frankly even by deliberate malice from a bank clerk who has a personal grudge or prejudice. And the procedure needn’t be expensive or onerous for CRA. Most financial accounts have email addresses attached to them. Presumably accounts are being reported electronically, in some format that CRA can easily search and from which it could reasonably easily produce robo-emails to the email addresses of the holders, indicating a) your account X has been reported to us, b) for Y reasons, c) we will forward this to IRS on Z date unless you reply to this email before then giving us an explanation and appropriate documentation to contest those reasons.
Please do all that you can to ensure there will be due process and due diligence to protect my fellow Canadians, in Canada, as well as whatever concerns you might have for the interests of the IRS and the financial institutions. Government and corporations exist to serve the people and respect their rights, not the converse (at least not in a truly sovereign and democratic country).