Expert: FATCA Violates Charter

Here is what Tim promised yesterday.  Arrow’s article from Vancouver Sun:
Compliance with FATCA May Violate Charter of Rights
Great news to wake up to this morning. Many thanks to Noble Dreamer for posting this under What’s New, Just Me for tweeting it and Tim for the advance notice.  Special thanks to Arrow for his dogged determination to get this article out there.
Forner Dean of Osgoode Law School and Canadian Constitutional expert Peter Hogg outlines the Charter issues in a five page submission to Finance Canada.  That includes:

“In my opinion, the procedures mandate by the Model IGA are discriminatory in a way that would not withstand Charter scrutiny,” Hogg says in his letter. “These procedures effectively treat individuals differently, and adversely, based on an immutable personal characteristic, specifically citizenship. If Parliament were to enact legislation authorizing and permitting this type of differential and adverse treatment, the legislation would contravene the equality protections in section 15 of the Charter.”

The article goes on to outline other areas of the Charter which FATCA may contravene. These include Sec. 7 (protects “liberty”) and Sec. 8 (“unreasonable search and seizure”).
Canadians, read the article and rejoice!
If CBA or Finance Canada are following us, be prepared for that class action lawsuit if you or the government dare to try to violate our rights!
With more than a million Canadians adversely affected by this, the odds of a class-action suit coming together look pretty good.


23 thoughts on “Expert: FATCA Violates Charter

  1. First, kudos to Professor Hogg for confirming in a formal submission from a constitutional lawyer what some of us have been saying from Day One (when we first heard of FATCA). FATCA and the IGAs based on it would constitute an arrogant, extra-territorial and imperialist violation of Canada’s (and other nations’) sovereignty, constitution and laws, if implemented on our soil by any government or financial institution in our country. And further kudos to Elizabeth May for getting the submission through an ATI request and posting it on the Green Party website. My impression of her and her party grows every day.
    I urge every concerned Canadian to email the link to their MP and that MP’s party leader, just to hammer the point and ensure that EVERYONE in Parliament gets the message. In my email to Paul Dewar (NDP, Ottawa Centre) and his leader, Tom Mulcair, I said I can assure them that if any IGA goes forward in Canada, or any Canadian financial institution tramples on Section 15 of our Charter, there WILL be court and class-action challenges. There is already in place an agreement between Canada and the US to exchange (in our case) information on Canadian financial accounts held by US RESIDENTS, which is what FATCA ought to be about, and which doesn’t affect our Charter, which governs and protects CANADIAN RESIDENTS. An IGA that would violate our charter and may also violate provincial legislation and our constitution, would be a complete and absurd waste of time, energy, and money better spent by all concerned on other more important things. (In fairness, kudos also to our Finance Minister for having made that point repeatedly in public and presumably also in private to US officials. I think Hogg’s submission goes a long way toward explaining why the rumoured-to-be-imminent IGA still hasn’t happened and seems to be stalled, if not actually dead in the water.)
    I encourage our friends in other countries to copy that link to their own governments and politicians. It is time that the rest of the world drew a couple of lines in the sand, and reminded the United States of Arrogance that the reach of their legislation ends at their borders. Sometimes your best friend is the one who points out to you that you’ve gone off the deep end, are way out of line, and need to return to first principles. (Americans who consider themselves members of the Democratic Party would do very well to go to their local library and get a copy of “The Arrogance of Power” by the late Senator William J. Fulbright, a Democrat and past chair of the Senate Foreign Relations Committee, and read it very carefully. That book was primarily about US actions in Vietnam at the time, but the principles and ideas apply far beyond Vietnam and not only to military matters. As a one-time member of and former voter registrar for the Democratic Party, I think it is long-past time for today’s Democrats to take a long, hard look at what they’ve become, what some of their politicians are doing, and go back to their first principles. It long ago ceased to be my country or my party, and I long ago stopped thinking of myself as America’s friend, but as a former friend I think I owe them that statement.)
    Finally, read what Hogg says about credit unions in his submission, in passing. Shortly after I heard about FATCA, and even though as a 35+ year owner of a CLN I didn’t need to, I sold off my few US investments, moved them into Canadian-only investments, and closed my sole remaining account with a member of the Canadian Bankers’ Association and moved every last cent I had with them over to my credit union. I will not contemplate having any dealings with any member of CBA again until I see some convincing evidence that they and their members take the first name of their association more seriously than they seem to be taking it, at least on FATCA. In particular, if I had any money in a certain major chartered “Canadian” bank that has more branches now in the US than in Canada, I’d seriously question their nationality, their motives given their economic vulnerabilities under FATCA, and why I’d want anything to do with them. Now, before FATCA comes into full force, would be a very good time for Canadian investors and savers to take a good, hard look at who has their money and what might be done with information about it. And it also is a good time not only for CBA but also for its individual members to state clearly where they stand on issues that would violate our Charter of Rights and Freedoms, not to mention other Canadian federal and provincial legislation.
    And shame on any politician in any country who doesn’t read through what they’re voting on and think about its consequences. That isn’t democracy, it isn’t government, it’s the kind of behaviour one expects from what Pierre Trudeau once described as “trained seals.” That’s seals, as in furry mammals that live in the sea, drag themselves onto dry land periodically, and slap their flippers together as they bark in unison. It’s utterly pathetic, unless you’re a seal and that’s what you’re genetically programmed to do.

  2. @Schubert, Tim, Others: I forwarded a copy of Arrow’s article to CBA yesterday and reminded them again that I and and many others will pursue every legal avenue available to us to ensure our rights as Canadian citizens and residents are respected.
    I also had an e-mail from Joe Arvay yesterday. He is the prominent constitutional lawyer Tiger, Somerfugl and I consulted.
    Joe was on a sabbattical for six months and has recently returned. He says: “FATCA has been on my mind but I remain of the view that unless and until the Canadian government enacts legislation giving effect to it there is still nothing to challenge in the courts. Professor Peter Hogg, Canada’s foremost constitutional law scholar has been kind enough to share a letter that he recently wrote the Canadian government advising that it is likely that any proposed law that simply caves in to the US demand would be unconstitutional for various reasons but notably because it would violate the equality rights of Canadians whose place of birth was the U.S.”
    I understand from Tim that Joe and Peter have often been on opposite sides in court Charter challenges, but they seem to be of the same mind on FATCA. Interesting that Joe calls Peter Hogg “Canada’s foremost constitutional law scholar.”
    Joe also said he has been contacted by another individual who may be interested in supporting a possible legal challenge. I think I know who that person is and I don’t think it is a Brocker or a Sandboxer.
    I will be sending Joe some additional information this week and will let him know that there are many others who are willing to join in a legal challenge.
    CCLA also holds the position that it is “premature” for court action now when we do not yet know who (i.e. banks, government) or what (i.e. bank action or IGA) we would be challenging.

  3. You may want to send Arvay or Abby Deshman the following if you have not done so before:
    In particular these sections of the Court’s decision:
    (4) This case concerns discrimination between one group of Canadian citizens in the position of the applicant (Convention citizens) and all other “Canadian citizens”. Under subsection 15(1) of the Charter, true equality does not necessarily result from identical treatment. The Court must look at the impact of the law upon the individual or group to whom it applies and decide whether the applicant and others in the “Convention citizens” group are being discriminated against on grounds relating to personal characteristics. The impact of the Convention upon the applicant is three-fold. First, her human dignity is affected since Convention citizens have less rights than all other Canadian citizens. Second, Convention citizens are deprived of fundamental justice. For example, applicant had not been given fair notice of the Third Protocol in 1991 at which time she could have resorted to the U.S. courts. Third, her property in Canada was put at risk through seizure by a foreign state. She could lose her property, whereas a long-standing Canadian citizen would not. Accordingly, the applicant is now vulnerable to breaches of procedural and substantive justice in respect of the escalating IRS claim. The effect of the provision on the applicant and Convention citizens is unjust. Section 15 of the Charter was infringed in that the applicant is a member of a disadvantaged group because of her previous status as a non-citizen. The impugned law has a discriminatory purpose or effect. Convention citizens are a small group for whom the consequences of the retroactive portion of the Convention are severe.
    At each stage of a section 1 analysis, close attention must be paid to context, including, in this case, consideration of the Convention Act as a whole and the particular provision at issue. The basic purpose of the Convention is to avoid double taxation and fiscal evasion. The first part of the Oakes test was met in that the inclusion of Article XXVI A in the Convention addressed a pressing and substantial need in the context of the Convention as a whole. It could not, however, be said that procedural fairness was accorded to the applicant and other Convention citizens. When the Third Protocol came into effect in 1995, the applicant’s rights to challenge the notice of deficiency had expired. The applicant was deprived of her due process protection by not being given an opportunity to challenge the notice of deficiency. Because the retroactive provisions of Article XXVI A sets up two classes of citizens, it could not be said that they minimally impair the Charter guarantee. Nor could it be said that their retroactive application was proportional between the effect of the mesure and its objective, if the abridgment of the right outweighs the legislative goal. The impugned provision could not be saved by section 1 of the Charter.

  4. @Blaze This is indeed excellent news that more people are making the same arguments as we have been making at IBS, Maple and elsewhere for over a year. I fondly remember the moment of truth at in summer 2011 when I bumped into Petros and discovered that I was not the only one thinking about such origin discrimination arguements.
    As I have done at IBS ( I would like to add some further constitutional arguements as this is not just about the Canadian Charter, but the constitutions of all decent nations around the world:
    Article 21
    1. Any discrimination based on any ground such as sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation shall be prohibited.
    A USP abroad fits ethnic or social origin, membership of a national minority, as well as birth.
    The Swiss Federal Constitution (
    Art. 8 Equality before the law
    1 Everyone shall be equal before the law.
    2 No one may be discriminated against, in particular on grounds of origin, race, gender, age, language, social position, way of life, religious, ideological, or political convictions, or because of a physical, mental or psychological disability.
    The key in the Swiss Constitution in Art 8 Al 2 “Origin”. I think that the unqualified word “origin” covers both national origin and birth.
    Indeed, I get the same impression from the French version “Nul ne doit subir de discrimination du fait notamment de son origin…”. The German version uses the same word “Niemand darf diskriminiert werden, namentlich nicht wegen der Herkunft, der Rasse, des Geschlechts, des Alters, der Sprache, der sozialen Stellung, der Lebensform, der religiösen, weltanschaulichen oder politischen Überzeugung oder wegen einer körperlichen, geistigen oder psychischen Behinderung…” Herkunft is literally where something or somebody comes from and thus “origin”.
    Also, in the Universal Declaration of Human Rights (
    Article 1.
    All human beings are born free and equal in dignity and rights.They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.
    Article 2.
    Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other imitation of sovereignty.
    Here the keyword is “National…origin”
    Also, thanks to Mark Twain at IBS in the comments of, we have similar info from the Swedish Constitution:
    2 § Den offentliga makten skall utövas med respekt för ALLA MÄNNISKORS LIKA VÄRDE och för den enskilda människans frihet och värdighet.
    Den enskildes personliga, EKONOMISKA och kulturella VÄLFARD skall vara grundläggande mål för den offentliga verksamheten. Det skall särskilt åligga det allmänna att trygga rätten till hälsa, arbete, bostad och utbildning samt att verka för social omsorg och trygghet.
    Det allmänna skall främja en hållbar utveckling som leder till en god miljö för nuvarande och kommande generationer.
    Det allmänna skall verka för att demokratins idéer blir vägledande inom samhällets alla områden samt värna den enskildes PRIVATLIV och FAMILJELIV. Det allmänna skall verka för att alla människor skall kunna uppnå delaktighet och jämlikhet i samhället. Det allmänna skall MOTVERKA DISKRIMINERING av människor på grund av kön, hudfärg, NATIONELT eller etniskt URSPRUNG, språklig eller religiös tillhörighet, funktionshinder, sexuell läggning, ålder eller annan omständighet som gäller den enskilde som person.
    § 2 Public power shall be exercised with respect for the equal worth and individual freedom and dignity.
    The personal, economic and cultural welfare shall be fundamental aims of public activity. It shall be incumbent upon the public to ensure the right to health, employment, housing and education, and to promote social care and social security.
    The public authorities shall promote sustainable development that leads to a healthy environment for present and future generations.
    The public authorities shall promote the ideals of democracy as guidelines in all areas of society and safeguard the individual’s personal and family life. The general will work for all people to attain participation and equality in society. The public authorities shall combat discrimination of persons on grounds of sex, color, or ethnic NATIONAL ORIGIN, linguistic or religious affiliation, disability, sexual orientation, age or other circumstance affecting the private person.
    Swedish Constitution official website:

  5. Excellent article in German that Swisspinoy found at IBS:
    Swiss People’s Party and Greens reject FATCA.
    Also, please see the votes on my polldaddy thingamajig at
    Nobody has voted that they don’t care. The tally stands now at 193 for the US abolishing FATBARDT, 7 against, 1 undecided.
    There is also a tally for the FATBARDT issues that cause you the most pain.
    Please vote if you haven’t already.

    1. Can you and others in Switzerland get constitutional lawyers and others on board as we have done in Canada?
      Unfortunately, our politicians and banks in Canada don’t seem to want to listen to citizens and customers. It seems to be necessary to bring in the big guns (and I abhor guns!)

  6. Damn! Jefferson Tomas, that was one hell of a comment and great research. I knew about the EU charter but hadn’t looked at any others. You pulled it all together beautifully and it would be wonderful if you could do a post on it (unless one already exists somewhere). I’d put a link on the Flophouse in a heartbeat….

  7. @victoria @outraged Actually, It has been suggested that we create a seperate post at IBS dedicated to the interpretations of constitutions as to the national origin discrimination question and that it would appear in the sidebar under “Our Resources”. Similar could be done at Maple. I will try to build the post on the IBS side today.
    In the meantime, Just Me posted a link to a pdf version of Allison Christians article “The Dubious Legal Pedigree of IGAs (and Why It Matters) which covers the concerns that Allison mentionned in her FATCA Forum presentation and in her participation in subsequent discussions during the Forum.

    1. OK, I have integrated all of the constitutions that were discussed above into a new post which I alredy agreed with Petros could become a sidebar item in “Our Resources” at IBS.
      I believe that we may already have articles somewhere on IBS for other constitutions such as French, German…
      Victoria, perhaps you could submit a comment for the French one?

  8. With all this talk about constitutions, it reminds me Steven Mopsick has said other countries will simply change their constitutions to accommodate FATCA.
    What world does he live in? Oh right. The one of all those highly intelligent, well-educated, moral folks in Washington.
    Steven is a lawyer. (Where are you Steven? Even your own blog is quiet). As an intelligent, highly-educated person, Steven should know how difficult it is to simply change a constitution.
    We went down that road in Canada about 25 years ago (remember Meech Lake Canadians?). I don’t think there is a Canadian politician or citizen who wants to even think about trying that again.
    From the American perspective, remember the attempts at the ERA and what a disaster that turned into. (I’m proud to say Canada’s constitution has the equivalent of an ERA under Section 15, which is the primary Section which Joe Arvay and Peter Hogg are using).)
    All of this is to say, constitutions are our best hope for resisting the FATCA Attack.
    Great idea Jeff to pull together all the resources. I remember Geez wrote about FATCA violating the Brazilian constitution. Even Russia and China are saying similar things.

  9. @Blaze,
    Yes, I seem to recall Mr. Mopstick writing that other countries would change their laws to accommodate FATCA, a pretty presumptuous assumption for a lawyer to make, in my opinion.

  10. @WhiteKat: Steven has the common American attitude of presuming all other countries are inferior to United States of Arrogance. Their laws and constitutions don’t matter. US laws rule supreme on the planet.
    Unfortunately, this attitude is so arrogant, Americans don’t even realize it is arrogant. They think it is the natural order of the universe.
    I must say, however, a few American family and friends have said “Why do we wonder why everybody hates us?” when I tell them about FATCA.

  11. I see that Steven Mopsick is tired of hearing truth spoken, and has changed the site so that comments can only be made with a Google account.

  12. Citizens of Canada cannot rely solely on elected representatives to protect their sovereign interests. It may be necessary to fight implementation and enforcement of FATCA in court. Canada has advanced human rights legislation prohibiting National Origin Discrimination. And Peter Hogg has already laid the foundation for an argument.
    So take take FATCA to court.
    Sever the issue from taxation. It’s a human rights issue. Focus on the position that entire concept of “US person” has no legitimate standing under Canadian law and is discrimination against certain Canadians based solely on national origin. Also, banks and the Canadian government cannot be arbiters of US citizenship; they have neither the qualification nor the legal mechanism to do so.
    Concerned citizens can form a plaintiffs’ group. Find a legal champion. This is a high profile opportunity for the right lawyer. This will likely involve some cost, but it could be shared by many. A political party or local MP could participate by helping to facilitate. Use the excellent Peter Hogg letter as a starting point.
    Select the most blatant examples of harm: Canadians who’s only US tie is place of birth, with no other US economic tie: possibly border babies and retirees who are long-term Canadian citizens. Serve politicians, banks (and the press) with fair notice that actions against these Canadians could be discriminatory, harmful and unlawful, and will be answered with legal action.
    If government or institutions attempt to enforce FATCA, then there are grounds for action. This could include seeking an injunction against discriminatory activity in administration of FATCA while the case winds its way through the system

  13. @Wondering. Others: Tiger, Somerfugl and I consulted a prominent Canadian constitutional lawyer over a year ago. Joe Arvay was recommended by Tim.
    Joe advised us if banks violate Canadian banking, privacy or human rights laws, we may have grounds for a lawsuit against the banks. If the government changes the laws to accommodate the US, we have grounds for a Charter challenge against the government.
    At that time, Joe said “Don’t lawyer up now” because we don’t know what the banks or what the government will do, so there are no actual grounds at this time. CCLA agrees it is “premature for court action.”
    Joe has been on a sabbatical for six months, but in an e-mail from Joe last week, he said: “FATCA has been on my mind but I remain of the view that unless and until the Canadian government enacts legislation giving effect to it there is still nothing to challenge in the courts. Professor Peter Hogg, Canada’s foremost constitutional law scholar has been kind enough to share a letter that he recently wrote the Canadian government advising that it is likely that any proposed law that simply caves in to the US demand would be unconstitutional for various reasons but notably because it would violate the equality rights of Canadians whose place of birth was the U.S.”
    It is interesting that Peter Hogg had already shared that with Joe as I understand Pete and Joe have often been on opposite sides of Charter challenges, with Joe representing the plaintiff and Peter representing the government.
    I have repeatedly told politicians, the CBA, my bank, etc of Joe’s advice, of CCLA’s position and that I will not hesitate to take action if banks or the government violate my rights.
    I have also told them many more will join in.
    Joe has been contacted by another person since I contacted him. If the person is who I think it is, that person is not a Brocker or a Sandboxer, but is definitely prepared to fight FATCA.
    I have told Joe I could probably pull together a large group of people for a legal challenge to FATCA. I hope that won’t be necessary, but much of the ground work has been laid if we do need to do that.

  14. I am expecting an actual copy of Peter’s letter this week or next. I sent in an Access to Information request with $5. Finance Canada called last week and said they are returning the $5 to me.
    Because they have already disclosed the letter, they are treating my request as “informal,” so I don’t need to pay the fee.
    They will mail me a copy of the letter this week.
    That was amazing turn-around time. I am impressed at how quick, responsive and respectful the employee at Finance Canada was.
    I wish I had known a while ago that I could get a letter like that. I thought it would be treated as private information.
    @Tim: I hope you hear from the media. Are you optimistic or are they all still asleep at the wheel?
    @Outraged: Interest is growing. We will likely have a huge group. If and when it becomes necessary, I think we will be up and running in a flash.

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