FATCA was back in the House of Commons yesterday amid many discussions of the omnibus budget bill. Here is what was said:
NDP Peggy Nash:
I also want to raise the issue of FATCA. This may be something the majority of Canadians do not know much about, but for Canadians who hold dual Canadian-American citizenship, the bill is very troubling. An entire bill about FATCA is enclosed in this omnibus budget bill. It would impose the Foreign Account Tax Compliance Act amid questions in the United States about the constitutionality of the act. However, the government does not seem to care if FATCA would be found to be unconstitutional because it is not bound by the U.S. Constitution. It is one of the only governments happy to give out the private details of its citizens’ financials. In other words, Canadians’ private banking information is to be made available to the U.S. for tax reasons to comply with—wait for it—American law. The bill would give the Minister of National Revenue the power to make any regulation necessary to carry out this highly controversial act.
It is entirely inappropriate for the government to present this legislation by burying it in an omnibus bill with time allocation so that we do not get adequate time to study and debate this bill within a bill. The government is just hoping Canadians will not notice, but I suggest that Canadians are taking notice and are very concerned about these tax changes.
Mr. Speaker, on the issue of FATCA, there are probably hundreds of thousands of accidental American citizens who will also be found in this great schism of sending their data to the U.S.
Those are the children who were born in Canada, who have never lived in the United States, who have never been a United States citizen, who the U.S. is now declaring are United States citizens as a result of their parents having been American. Those children would now be subject to having their banking information sent to the U.S.
It would create a divide. Two children born on the same day in the same hospital in Canada, one with American parents and one with Canadian parents, would be treated differently. Maybe the member would like to comment.
Back to Peggy Nash:
Mr. Speaker, there are all kinds of people who are just discovering that, in fact, they hold dual Canadian-American citizenship; and the member is quite right that even if they have never worked in the United States, the fact that they are American citizens because they hold dual citizenship scoops them into this net of FATCA.
My office has been deluged with calls from concerned citizens since this initiative by the U.S. was first announced. We do not believe that the government has effectively protected the interests of Canadians.
From Lib Joyce Murray:
Mr. Speaker, the hon. member is quite right. The bill’s response to FATCA raises obvious concerns about privacy and sovereignty. There was not the kind of consultations that could have avoided those concerns.
This is an element in Bill C-31 that attempts to shield Canadian banks from U.S. financial penalties. It protects Canadian banking information at the expense of those citizens of Canada who find themselves being targeted by FATCA and who are outraged that they would be required to have their banking information shared with the United States.
I think the overall point that my colleague was making is that this government is very well known for its absence of consultation.
I am very happy to hear that the Minister of State for Western Economic Diversification has consulted widely on a complex issue.
That is exactly why it should be in its own bill and not wrapped up in this anti-democratic omnibus budget bill.
Mr. Speaker, members of the NDP as well as the Liberal Party who have spoken previously to the bill today have talked about FATCA. FATCA would be unilaterally and automatically imposed on Canadian financial institutions and their clients as of July 1, 2014. Because of the provisions in this bill, Canada has seen significant exemptions and relief, including certain accounts that are exempt from FATCA. Financial institutions in Canada will not report any information directly to the IRS versus the CRA. There are several exemptions. This is done through international negotiations.My question to my colleague opposite is this. Given that this would be imposed on us by a foreign government as of July 1, what would he do differently that is not in this bill?
Green Elizabeth May:
I know that some members today have referred to people who are dual citizens. I can assure members there are many Canadians who are not dual citizens, but the ambit of the FATCA would require Canadian banks to turn over private information about people who have no idea that they could be considered to have any connection whatsoever to the United States, for tax purposes.
This bill, according to many constitutional law experts, would violate the charter. It is unprecedented, in terms of assuming that a foreign power could have access to information about Canadian citizens.
I would ask my hon. friend if he does not think it would be preferable to pull the FATCA sections out of this omnibus bill and subject them to a court review to ensure they are charter compliant?
Con Wladyslaw Lizon
Mr. Speaker, I am familiar with the issue she is raising. As members know, our government reached an agreement with our neighbour, the United States of America, on that very issue.
Under the terms of the agreement, there would be no breach of privacy. There would be no information exchanged between the governments to which she is referring.
Mr. Speaker, I would like to go back to the same question. I am not confident that my colleague and friend from Saanich—Gulf Islands really got any response to the question she asked.It seems that what the government has done with its omnibus legislation is like what was done with the movie series Police Academy: each movie got worse, and each omnibus budget just gets worse and worse.The bones of the particular piece of legislation are obviously not in sync with the charter.I ask my colleague this. Why would the legislation not be viewed through the eye of whether or not it aligns with the charter?
In the case of the privacy issues and whether or not the legislation is aligned with the charter, we are confident that it is.