All posts by Blaze

NDP's Nathan Cullen Slams Cons

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.

 

April 1: US To Raise Taxes on Canada To Pay For Deficit

Before you read US To Raise Taxes on Canada To Pay For Deficit, you may want to note the date.
Unfortunately, the realities we are facing make it way too close to the truth for us to just see if as a joke.

In a bipartisan vote yesterday, the U.S. Congress sent a bill to the President’s desk that would raise income taxes on Canadians to pay for the hundreds of billions of dollars of revenue shortfalls caused in the implementation of various popular, longstanding programs that experts agree are just totally unaffordable.

The article says President Obama is expected to sign the bill.
Afiter what we’ve seen the past few years, nothing would surprise me. Maybe the Conservative government would even like it. If all Canadians had to pay to the IRS, then we would not be able to make a case of national origin discrimination.
April Fools joke? Not to anyone who is getting FATCAed by the IRS
 

Canada's FATCA Law "Kind of a Mess"

“What’s proposed is kind of a mess”
That understatement is according to Calgary tax lawyer Roy Berg in an article in Lexpert, the Business Magazine for Lawyers.
Mr. Berg also says:

“Fortunately, the Parliamentary Joint Committee on Taxation is putting together a paper to fix it.”

I’m not sure it’s fixable. The total disregard for our submissions tells me how seriously either Finance Canada or the Cons take take our very real concern.
The article also says:

But even if it’s fixed, a constitutional challenge may be looming. Peter Hogg, a leading constitutional law scholar and a scholar-in-residence at Blake, Cassels & Graydon LLP, has warned that the implementing legislation may violate the Charter of Rights and Freedoms.

Synopsis: Solving U.S. Citizenship Problem with John Richardson (London, Ontario)

Finally, I’m posting a synopsis of Solving the Problem of US Citizenship information session presented by John Richardson of citizenshipsolutions.ca that was held in London, Ontario on February 8, 2014.
I apologize for the delay. Other FATCA projects have consumed my life.
You can read the synopsis in the link, but here are a few highlights:
CITIZENSHIP:
John first gave an overview of US citizenship laws, tax laws, renunciation and relinquishment and many changes that have taken place over decades.
People have many differing circumstances and each one is unique. Because of the complexities, John stressed:

 “The bottom line is you have to check the law at the time the act took place.”

 For people born in Canada to one or more parent born in the U.S., John suggested they should not automatically assume they are US citizens or US persons. There are many different rules around that. In addition John questions whether the US can apply their laws on people born outside of U.S.  So, he recommended people explore that before making an assumption they must be a US citizen.
He said:

“I would never, never, never under any circumstances advise someone to simply swallow hook line and sinker, well my father was American, therefore I am American for a number of reasons.:

A Supreme Court decision from the 1960s dealt with the forcible destruction of US citizenship. John confirmed many in the room felt they were being forced to relinquish US citizenship.
John believes:

The forcible destruction of US citizenship is going to become THE argument on this issue.
 

John explained renunciation is one form of relinquishment, along with other expatriating acts like becoming a citizen of another country with the intent of relinquishing US citizenship, working for a foreign government and other actions.
For numerous reasons, John recommended people who are renouncing or relinquishing by other means should get a Certificate of Loss of Nationality (CLN) through US Department of State by renouncing or reporting relinquishing at a US Consulate.
John reported there are various reasons to

“Deal with this sooner, rather than later.”

For many different reasons, John thinks:

“U.S. citizenship is probably the most dangerous, toxic citizenship in the world today.”

Lynne advised people who became naturalized Canadian citizens may be able to get information from their Canadian citizenship file by applying through Access to Information at (http://www.cic.gc.ca/english/department/atip/form-imm5563.asp)
PERSONAL EFFECTS:

John recognized the toll these issues are taking on people.  He stressed:

“Your life, your health, your family is so, so much important than any of this stuff. If you focus on this in a way that jeopardizes the things that make life worthwhile, you’re going to let these people win–absolutely destroy your life.”

TAXES:

John said there are two types of US persons:
1. Those Who Are Compliant
2.  Those Who Are Not Compliant

No matter what, you’re going to have a problem.  “When we talk about U.S. taxes, we’re talking about much more than taxes. It’s a whole information reporting regime, which is a huge problem.”

He covered many of the issues relating to taxation, but said the most important message was:

“One thing you should absolutely not do is enter the Offshore Voluntary Disclosure Program” (OVDP).

CANADA REVENUE AGENCY, CANADIAN COURTS:

John explained that under the Canada-US Tax Treaty, CRA will not collect penalties for the IRS for Canadian citizens or residents. CRA also will not collect taxes for the IRS on a US citizen who also was a Canadian citizen at the time the tax liability arose.
Plus, under the Revenue Rule, Canadian courts will not issue a judgement for the IRS.
FATCA:
John thinks FATCA is a “gross abuse of power” by the United States.

“FATCA allows them to redefine any time they want what the information is and any person who is affected.”

 Lynne noted the proposed legislation to allow FATCA to be implemented will prevail over other federal laws, including banking, privacy and human rights laws.  Some individuals have contacted a constitutional lawyer about this and more information will be posted at Maple Sandbox (maplesandbox.ca and Isaac Brock Society (isaacbrocksociety.ca)
UPDATE: Money was raised and constitutional lawyer Joseph Arvay was retained on March 10 by Dr. Stephen Kish and Lynne Swanson to provide a legal opinion on a possible challenge to the FATCA IGA enabling legislation under the constitution and Charter of Rights and Freedoms.
 

BREAKING NEWS: Cons Hiding FATCA Law in Budget Act!!!!

The Cons continue their sneaky games. They have hidden the law to enable FATCA and the IGA in the 375 page omnibus Budget Implementation Act 2014..
The enabling law begins on page 72 (Clause 99). The IGA begins on page 313.
A source tells me it is possible the FATCA legislation could pass by late May or June.
So, now we know what Finance Canada did with all of our submissions.  Nothing.
UPDATE Saturday, March 29, 2014: Stephen Kish and Lynne Swanson remain in contact with Joe Arvay, including this weekend.   He continues working on our case and has assured us that he wants to get this right for us.
One more lawyer told us this week that Joe is the best Charter lawyer in the country. We respect that view.
We understand that people are anxious, especially with the omnibus move by the government yesterday.However, we encourage you to be patient.

Mr. Arvay hopes to have the full legal opinion in April, but there is a possibility it could be later than that. As we mentioned in our fundraising through C3f, we will provide you with what information we can while protecting our case to the best of our abilities.

Grouchy and Mad: What About 41 MPs Born Outside Canada

Wow. Grouchy and Mad tweeted a fabulous question to Canada’s new Finance Minister, the Prime Minister and leaders of the NDP and Liberals. :

@joeoliver1 @JustinTrudeau @ThomasMulcair @pmharper 41 MP’s foreign born. Why do you allow discrimination of only US born? #fatca
I hope there is an answer to that brilliant question.
We might want to add spouses to the list. For example, Justice Minister Peter McKay’s wife was born in Iran. I don’t think their private financial information will be sent to Iran any time soon.
I don’t think Grouchy and Mad participates here, but thanks if you’re reading us G&M!

Is This What BMO Thinks Of Us?

Correction: In this post earlier today, I said BMO responded to Suzanne Herman’s letter. Someone pointed out to me that the reply letter was from a former Product Manager for Bank of Montreal (BMO). I apologize for that earlier information and have made corrections in red below.
However, I am still left wondering if this is what BMO thinks of us. I hope BMO may issue a clarification considering that Mr.Cavanaugh used their name and his former title in his letter.
A debate has developed at the Squamish Chief between Suzanne Herman who had a letter to the editor The FATCA of the Matter published last week.
In her letter, Suzanne wrote:

First of all, the agreement will now make discrimination based on national origin legal in Canada.

She also called FATCA a threat to Canadian sovereignty.
Today, a former Program Manager, Capital Markets, Bank of Montreal    responded with The Facts of FATCA. I find this letter among the most offensive I have read anywhere.
This letter essentially calls us tax evaders and criminals and says FATCA does not violate Canadian sovereignty.
BMO former Program Manager Capital Markets also has an interesting take on the Charter of Rights and Freedoms.

To take advantage of Canada’s Charter of Rights and Freedoms, you must be a a Canadian citizen and you must not be contravening any laws in Canada or any other country.

First of all, you do NOT have to be a Canadian citizen to be covered under the Charter of Rights and Freedoms. The very first Charter case (Andrews vs Law Society of British Columbia) was won by someone who was not a Canadian citizen.  The court found a requirement of Canadian citizenship infringed on the plaintiff’s Charter equality rights.
Based on Mr. Cavanaugh’s understanding, it also appears Canadian women born in Saudi Arabia can’t avail  themselves of the Charter because they are breaking Saudi laws by driving in Canada.
In any case, we now know what BMO former Program Manager thinks of us.  I think Mr. Cavanaugh must now work for US Ttreasury and IRS.  I’m surprised he didn’t call us “myths”
 
 
 
 
 

Canada "Intended" Departure From IGA

Oh, those politicians and bureaurcrats are sneaky and underhanded.  Is it possible they are being sneaky and underhanded intentionally for our benefit?
The Financial Post is suggesting CRA and Finance Canada “deliberately undermined” FATCA. Read Leaked Documents Show Canada Intended Departure From the IGA.
Those documents were leaked as CRA Bootleg Guidelines over at Brock. In fact, Brock is cited as the source in the article.
Roy Berg says these documents reveal that Finance and CRA “intended to drastically depart” from certain provisions of the IGA.
For example, if someone gives New York City as a place of birth, that is only considered to be an “unambiguous place of birth” if it is listed as New York, New York, USA but is not if it is listed as New York, New York.
Hmmm. Nowhere does my Pennsylvania  birth certificate says USA.
Plus, the CRA information that we previously posted says financial institutions are not required to ask for place of birth.
Canadian passports do give country of birth. So here is a warning. Do NOT provide your passport to your bank!
Mr. Berg thinks this could “eviscerate” the IGA and put banks on the hook for withholding.  Things are getting interesting.
Despite all of this, I still want to see the FATCA IGA killed with the understanding it will not apply to anyone who is a legal tax resident of Canada.