Banks must notify customers before sending information to CRA and the IRS

Just after the Canada US FATCA IGA was signed, CRA put out a list of frequently asked questions.

Among the list is item 14 which caught the attention of some: (emphasis mine)

14. Does my Canadian financial institution have to notify me if information on my accounts is being reported to the CRA?

Canadian financial institutions must be open about their policies and procedures for complying with the Agreement and must be prepared to make this information available to anyone who asks about them. Although there will be no obligation for financial institutions to automatically notify their account holders about reporting to the CRA under the Agreement, financial institutions must, upon request, allow account holders to have access to the personal information that has been reported. 

In his testimony before the Senate Finance Committee on April 30th, Kevin Shoom mentioned that there was a change to the implementing legislation to take away the voluntary nature of informing customers that their accounts have been flagged as reportable. He cited ITA subsection 265(5), which is written in the usual almost incomprehensible language of the Income tax Act.

(5) For the purposes of paragraphs (2)(a) and (b), subparagraph (2)(c)(ii), paragraph (3)(a) andb)(ii), subparagraph B(3) of section II of Annex I to the agreement is to be read as follows 3. if any of the U.S. indicia listed in subparagraph B(1) of this section are discovered in the electronic search,or if there is a change in circumstances that results in one or more U.S. indicia being associated with the account,then the Reporting Canadian Financial Institution must  seek to obtain or review the information described in the portion of subparagraph B(4) of this section that is relevant in the circumstances and must treat the account as a U.S. Reportable Account unless one of the exceptions in subparagraph B(4) applies with respect to that account.

 I have asked Kevin to ask CRA to change their frequently asked questions to revise item 14 and he agreed to do so.Until the Charter Challenge nullifies the IGA, there’s going to be mistakes made by FIs. At least now, with this change, they will be required to contact customers before passing private information through the CRA to the IRS.

Another Open Letter to Recalcitrant Canadian Bankers Association: Response to statements made on November 19 2013 CBC broadcast

The November 19 CBC (Canadian Broadcasting Corporation) broadcast, in which a representative of the Canadian Bankers Association was interviewed, shows that Canada’s banks still feel that they have no choice but to capitulate to US demands for FATCA implementation.

This is just one brief response also posted on IsaacBrockSociety.ca: 

[SENT BY MAIL; POSTED ONLINE AT ISAACBROCKSOCIETY.CA
AND MAPLESANDBOX.CA]

November 21, 2013

Mr. Marion Wrobel
Vice-President, Policy and Operations
Canadian Bankers Association
199 Bay Street, 30th Floor
Toronto, Ontario
M5L 1G2

Dear Mr. Wrobel,

[Re: Your November 19 2013 CBC broadcast statements on
Canadian banks and FATCA]

I am asking you, as a representative of the Canadian Bankers Association (CBA), to provide more balance in future statements you will make to the public on involvement of Canadian banks in implementing the U.S. imposed FATCA (Foreign Account Tax Compliance Act) law.

In your November 19 statements broadcasted on CBC the audience was left with the impression that Canada’s banks have no choice but to capitulate to U.S. demands to implement FATCA– because the U.S. has a “large economy” and “financial markets are integrated.”

I appreciate that only limited broadcast time was available, and know that you would not mislead; however, Canadians need to know, directly from the CBA, that Canadian banks do in fact have the option of resisting FATCA in order to protect rights of all of us and the sovereignty of our country. Continue reading

MacLean’s Article: FATCA in Toronto Centre

Just hours before the Toronto Centre debate on FATCA, MacLeans Magazine added fuel to the flame.

In On Being Canadian and How Freeland Could Have Responded to McQuaig, author Erica Alini brings FATCA front and centre.

In a debate, McQuaig attacked Freeland for being un-Canadian. Freeland, who has spent several years in Russia, UK and US, did not respond.

As Ms. Alini points out about FATCA:

This kind of snooping could turn out to unconstitutional under the Canadian Charter of Rights and Freedoms, which protects privacy and liberty and forbids discrimination based on “national or ethnic origin.” And among the many whose rights might be trampled over would likely be Freeland, who must have a SSN, if not a green card, and certainly had a U.S. address. It would also include Green Party Leader Elizabeth May, who was born in Connecticut, and probably other MPs. Continue reading

Toronto Centre Green candidate responds to our Demo and CBA emails

As noted on other threads, on November 6 I sent an email to five Toronto Centre candidates concerning our current demonstration outside the Metro Convention Centre in Toronto. Yesterday I sent emails to the same candidates, transmitting to them the joint Brock/Sandbox letter to CBA and reminding them both about our demo and about the FATCA-centred debate being organized by Toronto Centre Debates for November 18.

I received yesterday (but only got to my email today) a reply to these emails from the Green candidate. Several days ago I got a reply from the Progressive Canadian candidate, who has been in touch with IRSCompliantForever and who I understand may attend our demonstration. At this moment, I have received no replies at all to either email from the Conservative candidate (Geoff Pollock) nor the Liberal candidate (Chrystia Freeland), and all I have from the NDP candidate (Linda McQuaig) in reply to my second email is a standard robo-reply thanking me for my email, saying it will be forwarded to an appropriate person, and asking me for a donation. Conclude from all this as you will, Toronto Centre voters. And pass the word around.

The full text of the reply from John Deverell, the Green candidate for Toronto Centre, is as follows:

Dear XXXX,

Thank you for the extensive documentation you provided on the US Foreign Accounts Tax Compliance Act (FACTA) and the attempt to embroil Canadian financial Institutions directly in its administration.

As Green Party leader Elizabeth May indicated in January of this year, we do not approve of the extraterritorial enforcement of US tax law by Canadian financial institutions, nor do we approve of an Intergovernmental Agreement between Canada and the US to produce that effect. Continue reading

News Release:CBA Letter and Protest

Here is the news release which was sent to Canadian media this morning:

Canada’s Banks: Would they Sacrifice Charter and Privacy Rights to Comply with Extraterritorial U.S. Tax Law?
November 12, 2013
For Immediate Release

TORONTO – U.S. Treasury officials are engaged in a financial attack on millions of law-abiding Canadians and Canada’s banking industry appears ready to help them win.

An open letter sent today to Terry Campbell, President of the Canadian Bankers Association (CBA), urges him and his association to abandon their policy of capitulation to unreasonable U.S. demands and instead defend the rights of Canadians everywhere. The letter is a collaborative effort of Canadians from coast to coast.  Most are participants at the Isaac Brock Society and Maple Sandbox websites at which the letter is posted online.

Under the Foreign Account Tax Compliance Act (FATCA), the U.S. demands that Canadian financial institutions identify “U.S. persons” among their customers and report comprehensive financial information on them to the U.S. Internal Revenue Service. This would include millions of Canadians with U.S. connections, however tenuous. Continue reading