@MurrayRankin @GuyCaronNDP & @NathanCullen On #FATCA Attack Again e FATCA Again

NDP members Murray Rankin and Guy Caron were on the FATCA Attack in Question Period again today.

Rankin:  “..Experts have warned this deal may not even be constitutional, but the Conservatives are rushing it through…Can the Minister explain why this complex bill must be hidden from proper scrutiny…because he knows it’s a bad deal for Canadians?”

Oliver:   “…Agreement addresses these concerns…”

Umm. No Joe, it doesn’t.

Caron:   “….Canadians want to know if their private information will be protected.  We don’t even know at this point if #FATCA is constitutional…”

Oliver:   Rah. Rah. Rah.

Does anyone else have the sense even Oliver and the other Cons don’t believe their own Con games?  In fact, they seem to hate defending it. Even the trained seals don’t seem to be able to do their clapping routine very well on this one.

Plus, “with the concerns of constituents filling up their inboxes and voicemail,” NDP demanded the Conservatives get FATCA out of the budget bill.

Nathan Cullen:

“Compare the lack of effort on FATCA to the massive effort on lobbying for Keystone. The Canadian government has spent millions of dollars and all hands of deck in Washington at our embassy and at every forum they can find to lobby for a pipeline that’s going to export 40,000 jobs,” he said.

“Here we have an agreement that’s going to affect a million Canadians… anybody who used a bank or a credit union in Canada — it’s going to cost them money. And the effort has been absent.

 

NDP Charlie Angus: Citizenship is Sacred

Today, it was Charlie Angus of the NDP speaking out.

Here is a video of his comments in the House of Commons.

Canadians should look to Parliament to say citizenship is something that is sacred, that is something that the role of Parliament will stand up for…

 

They’ve just decided to slip in the bill that will make it possible and legal for US government to demand demand personal financial information of Canadians who have lived their lives their lives in this country, who pay taxes in this country, who have been excellent citizens of this country, all because they happen to have been born in the United States.

There’s much more. All worth listening to. I will post the actual text tomorrow after it is available through Hansard, along with anything else that was said in the House today.

Elizabeth May Speaks Out Against FATCA Again

Elizabeth May was back on the FATCA attack yesterday in the House of Commons.  I have pulled  comments from her and others from  Hansard.

Note, Con Lynne Yellich says:

  It is important to understand that this is not just enhancing but also protecting Canadians, and it is important for us as we trade more and more.

 

Here are the points raised in the House:

Elizabeth May (Green)

 I have been trying to reserve most of my time in this brief opportunity for the most egregious section of Bill C-31, which is forcing through, with a limitation on debate that applies to all of Bill C-31, some potentially devastating changes to Canadians’ rights found under something called the FATCA. This Foreign Account Tax Compliance Act is thrown into Bill C-31, and I want to refer to the opinions of legal experts.

    Some time ago, concerned about the FATCA, I did an access to information request and turned up a letter to Finance Canada from Canada’s leading constitutional law expert, Professor Peter Hogg. He wrote to Finance Canada when the department it was in the early stages of working on this, and said that treating Canadians who might have some connection to the United States—not just those who might be born there, such as me, but who is no longer a U.S. citizen, or people who had parents born in the U.S., or once worked or studied there—differently than Canadians with no connection to the U.S. violates section 3 of our Charter of Rights and Freedoms, in which we are entitled to equal treatment under the law as Canadian citizens.

    However, it gets worse than that. Here I want to quote extensively from advice to Finance Canada from two very knowledgeable tax policy law experts: Professor Allison Christians, the H. Heward Stikeman Chair in the Law of Taxation at McGill University; and Professor Arthur Cockfield from Queens University.

    Both professors conclude that right now it appears that the only reason the current Conservative administration feels it has accomplished anything with FATCA is that it has staved off punitive measures against our commercial banks by the United States. That is the Conservatives’ sole rationale for a non-reciprocal agreement that will violate the privacy, and potentially the charter rights, of as many as one million Canadians. They have done it to avoid the U.S. bringing sanctions against them.

    These knowledgeable experts say that this implementation act would unduly harm the privacy rights and interests of all Canadians, unduly raise compliance costs for all Canadian financial institutions and Canadian taxpayers, and unduly raise legal exposure for Canadian financial institutions due to the ongoing potential liability for mistakenly transferred personal financial information.

    Bear in mind that this FATCA that we are being pressed to pass so quickly would require our banking institutions to decide for themselves whether someone appears to have some connection to the United States, and then they will turn over the personal banking information of that person without their knowledge to the U.S. Internal Revenue Service. It would also provide potentially sensitive commercial information held by Canadian firms to the United States, which if improperly revealed could harm a firm’s competitiveness. It would interfere with the cross-border mobility of Canadian workers to the United States. It would impede Canada’s efforts to enforce its own tax laws. It would violate the spirit and potentially the letter of a number of Canadian laws.

    The advice from these knowledgeable tax experts is clear and compelling. Since we have as a nation have now signed this IGA with the U.S., we have protected the commercial banking sector from these penalties, and so we have time to get it right. Here is their advice.

    We recommend that the government explicitly address what gains have been achieved by Canada in accepting the IGA, if any exist other than the relief of economic sanctions. If relief of economic sanctions is the only impetus for Canada’s acquiescence to U.S. demands, we recommend that the Canadian Government challenge the legality of such economic sanctions….
  (1125)

    In other words, the U.S. has no right to impose sanctions on Canadian banks. It says it does. We should challenge it in international court. These experts say that we should stop the introduction of FATCA, ensure that it does not violate our charter rights, protect the privacy rights of Canadians, and not rush into this. I urge the House to pull FATCA out of Bill C-31.
Lynne Yelich (Minister of State Foreign Affairs, Conservative)

Mr. Speaker, my notes say that this is an important piece because it updates the automatic exchange of information for tax purposes. Without an intergovernmental agreement between Canada and the United States, Canadian financial institutions and United States persons holding financial accounts in Canada would be required to comply with that, regardless, starting July 1, 2014, as per the FATCA legislation enacted by the U.S.A. unilaterally.

    It is important for people to understand that this is important. It is an intergovernmental agreement. It is something that Canada has to support because of recent G8 and G20 commitments on the multilateral automatic exchange of information. The G20 leaders committed to this automatic exchange as a new global standard, and it was endorsed as the OECD proposal developing a global model.

    It is important to understand that this is not just enhancing but also protecting Canadians, and it is important for us as we trade more and more.
 Elizabeth May:

 Mr. Speaker, I am so grateful that we are actually having a conversation and talking about this issue. The reality of the FATCA that the current administration has accepted is that it does nothing for reciprocal exchange of tax information. It is non-reciprocal; it is asymmetrical. It is unprecedented in international law for one sovereign country to say, “Oh gosh”, and cry uncle, “They are going to get our information whether we like it or not and they are going to punish our banks”.

    The best legal minds in our country are advising the administration not to cave in just because the United States says it has a right under its domestically passed legislation, but which has not been ratified as an international treaty by its senate. There are a number of legal issues here, for which I do not think we have shown sufficient backbone in response. We do not need to accept a law passed by the U.S. Congress. Would we accept a law passed by the People’s Republic of China that requested information of Chinese citizens in Canada? Are we to accept that in response to laws passed in other countries with implications for Canadian citizens, the Government of Canada can do nothing but say, “Here’s all the information we can provide you. It’s private. We’re not warning Canadians. We’re giving it to you. Good luck”.

    Everyone knows that Canada is not a tax haven. People who live here, Canadian citizens and residents, pay taxes. We pay more taxes than people do in other countries. We need to protect the privacy and charter rights of Canadians.

Helene Le Blanc (NDP)

Mr. Speaker, I think that the Conservative member, the Minister of State for Western Economic Diversification, clearly proved that this portion of Bill C-31 should be studied separately.

    The member for Saanich—Gulf Islands eloquently established and demonstrated that this part of the budget should be studied independently of Bill C-31. She also demonstrated that parliamentarians, regardless of party, are being denied an opportunity to study this part of the bill in detail, even though it will significantly affect Canadians, financial institutions and the Canada Revenue Agency. A Radio-Canada report stated that implementing this would cost CRA $100 million.

    Who does my colleague think will have to foot this pricey bill?

Elizabeth May:

Mr. Speaker, I would like to thank the hon. member for her question.

    I completely agree with the member. It is clear that FATCA is advantageous for the United States alone. There is nothing in it to help Canadians. As the lawyers and legal experts explained, the only reason why the Government of Canada accepted this agreement, which will violate the rights of Canadians, is that the U.S. government threatened to impose sanctions on our banks.
  (1135)

[English]

    We need to take this very complex section out. As the legal experts have commented, there was a truncated period for public comment. Very little time was provided for the financial sector, and look at the costs and what it will mean to our banking institutions and credit unions to comb through all the material they have on every customer. It will raise the costs. The banking sector does very well, but this is going to raise consumer costs and it will violate charter rights.

    Surely it should be removed from an omnibus budget bill for proper study. Additionally, we should go to international court to challenge the idea that the U.S., through a domestically passed law, has the right to punish commercial banks in Canada.
Helene Le Blanc (NDP)
 Mr. Speaker, can my colleague elaborate on the disastrous long-term consequences of this omnibus budget implementation bill?

    Over the years, how will this bill, and particularly the change having to do with FATCA, change the principles that are important to us?

    What impact will this bill have on the laws that protect Canadians’ privacy?

Linda Duncan (NDP)

For example, let us look at FATCA. This implements the Canada-U.S. intergovernmental agreement on the Foreign Account Tax Compliance Act, or FATCA. Grave concerns have been expressed by many of my constituents about these measures. This is a bill that absolutely should have come independently to this place for open debate and to allow citizens with dual Canadian and U.S. citizenship to come forward and testify to the issues, and for legal experts to testify to the matter and provide advice and counsel to the government on how it might be implemented in a fairer and more advantageous way for Canadian citizens.

    Regrettably, the government has thrown it in the middle of a budget bill and there will not be that opportunity.
Hedy Fry (Liberal)
 I also want to talk about something some of my constituents are complaining about a great deal, something that we very much oppose.

    It is a fact that the government signed an agreement with the United States that will require U.S. citizens living in Canada to regularly file U.S. tax returns and report their property and income to the IRS. Also, Canadian banks must report to the IRS on accounts held by clients with U.S. citizenship. We are creating a problem here. As we heard from other people, this measure brings up concerns about privacy and sovereignty. Constitutional law experts have been saying that this agreement violates the Charter of Rights and Freedoms, yet no one was consulted.

    It is interesting that the government goes ahead patting itself on the back but not having discussed it with anyone who should know and therefore making mistakes. I would be generous and kind and say it is with unintended consequences, although I wonder if the government even understands consequences.

Proposed Amendment Idea Sent to NDP, Liberals On Finance Committee and to Elizabeth May

Anne Frank over at Brock made a brilliant but simple suggestion on Friday for a proposed amendment to the enabling act for the IGA. Anne said:

Canada COULD unilaterally amend the IGA via the implementation treaty with a simple “notwithstanding” clause to the effect of “Notwithstanding any other provision of this Act or the IGA, no Canadian citizen resident in Canada or other permanent resident of Canada shall be considered to be a “US Person” for purposes of the Act or the IGA”. The IGA would be unamended – the implementation Act would simply gut it of its Charter-violating aspect…

The Act is amended by inserting after subsection 4(1) thereof the following:

“section 4 (1.1) Notwithstanding any other provision of this Act or the Agreement, for all purposes related to the implemenation of this Act and the Agreement, “US Person” and “Specified US Person” shall not include any person who is a Canadian citizen or is a landed immigrant ordinarily resident in Canada.”

That simple amendment, made to the implementing Act, would put the ball right back in Treasury’s court. They can deem all Canadian financial institutions non-compliant and bring their own financial house of cards down about their own heads (as withholding, while possibly lawful in the US, will not excuse the withholder in any other jurisdiction, including Canada). It would take a positive act on the part of Treasury to blacklist the entire country. They would not be able to point to 10 cents of revenue that they would be seeking to protect

in so doing. Further, as pointed out above, Canada would have more than enough fodder to retaliate in kind given the far larger magnitude of US investments in Canada (most of which, unlike bank accounts, can’t be moved overnight). All they would have to do is pretend that the IGA is compliant and drive on. It would be a brilliant move by the Government were they to allow themselves to be backed into it due to a serious Charter Challenge.

I ran that idea by a few people and have learned that amendment would be best in the enabling law and not in the IGA because the enabling act can be amended in Parliament, but an IGA amendment would require Finance Canada to submit the revisions to US Treasury for approval.

So, Friday night I sent this e-mail to NDP Finance Critic Nathan Cullen and Liberal Finance and Revenue Critic Scott Brison who are vice-chairs of the Finance Committee with copies to Finance Committee members Murray Rankin (NDP) and Guy Caron (Liberal). I  also sent a copy to Elizabeth May.

Thank you Mr. Cullen and Mr. Brison for your position and that of your NDP, Liberal and Green colleagues on FATCA in the House of Commons.

The Harper Cons and Finance Canada have been consistent in their unwillingness to listen to Canadians on this and many other issues.

I am writing to you as vice-chairs of the Finance Committee to suggest an amendment to the enabling legislation and/or IGA and to ask if you and/or your party would consider supporting Canadians on a possible constitutional challenge.

SUGGESTED AMENDMENT:

Here is a suggested amendment to the FATCA enabling legislation and/or the IGA.

“Notwithstanding any other provision of this Act or the Agreement, for all purposes related to the implementation of this Act and the Agreement, “US Person” and “Specified US Person” shall not include any person who is a Canadian citizen or legal permanent resident who is  ordinarily resident in Canada.”

With a Conservative majority on the Finance Committee and in the House, I realize this amendment would be likely to fail.  However, it may force Conservatives into voting against it, showing they clearly will not stand up for Canadian citizens and residents who were born in the United States.

POSSIBLE CONSTITUTIONAL CHALLENGE

You raised the Charter issue in the House. For your information, Dr. Stephen Kish and I have retained Joseph Arvay for a legal opinion on this.  We were able to do this because we raised the money for this legal opinion in just six days from Canadians and people around the world.

If the Charter challenge proceeds further, we expect we will be able to raise the funds for that.  Would you and/or your party consider supporting us in this?

Attached is a copy of a news release issued on March 10 regarding this.

Again, thank you for your efforts on this affront to Canadian citizens, residents, laws, rights and sovereignty.

 

 

Finally! Thomas Mulcair Replies

Finally!  Thomas Mulcair has a position on FATCA!

I suspect he has broken his silence because of our lobbying. James Jatras’ post at Repeal FATCA probably turned up the heat too.

I hope others have had a reply. Here is the entire content:

Thank you for taking the time to write and share your concerns with current US tax and foreign bank account reporting laws, and, more specifically, the U.S. Foreign Account Compliance Act (FATCA).

I share your concerns that FATCA’s sweeping provisions on financial disclosure will have significant consequences for dual Canadian-American citizens and Americans with landed immigrant status lawfully living here in Canada. Please know that New Democrats have consistently challenged the over-reaching aspects of FATCA and have urged the Conservative government to negotiate protective measures for those citizens who would be affected by FATCA’s onerous regulations.

We are also troubled that the secrecy of these negotiations with the US is detrimental for citizens with legitimate concerns relating to privacy and financial pressures. They must rely on media reports for developing news and have no opportunity to have their views considered in a meaningful way.

In discussing this matter with my NDP colleagues, we felt that it was important to reinforce how serious and unfair the consequences of FATCA could be for Canadians if unilaterally imposed. In taking the lead on this issue, Official Opposition critic for National Revenue, Murray Rankin, has written to Finance Minister Jim Flaherty calling on his government to reject any agreement that may violate the privacy rights of Canadians, erode Canadian sovereignty, or fail to offer Canada equal benefits to those provided to the United States. Please see the attached copy of Murray Rankin’s letter to Minister Flaherty.

Going forward, please be assured that New Democrats will remain vigilant on this issue. We will continue to pressure the Government to help address the above-mentioned concerns and ensure the rights of Canadians who hold dual citizenship with the United States are protected.

Again, I appreciate the time you have taken to share your concerns with me.

He attached a copy of Murray Rankin’s letter.

He initially talks about Canadian citizens and “landed immigrants” (Doesn’t he know it has been “permanent residents for years?!?), but his later paragraph Mulcair only mentions Canadian citizens, not residents. I don’t know if that was an oversight or intentional. Peter Hogg’s letter addressed those as also having Charter protection.

So, it seems the NDP has a position on FATCA again. Only the Liberals are silent now.(Well, BQ, too, but I don’t do any communications with them.)