“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.
Of course it’s a mess! FATCA is a mess. FATCA is 500 pages of nonsense so anything that is based on FATCA will also be of equal nonsense.
You might find this new article interesting:
http://www.advisor.ca/tax/tax-news/feds-bury-fatca-law-in-budget-bill-148502
Mr. Berg is being disingenuous when he says that the IRS and the U.S. Treasury aren’t enforcing FATCA but that it is the banks. The banks are collecting the 30% withholding as they are directed to according to the FATCA guidelines as issued by the Treasury and the IGA. If they were to fail to collect the fees the government would quickly take the money out of bank’s own accounts.
Would it be outrageous to suggest that a FATCA mess is a deliberate strategy of our government to stonewall its effective implementation?
@ArcticGreyling
Much as I’d like to believe the mess is deliberate sabotage by the current government, I think it’s more likely the mess is a combination of incompetence and being rushed after realizing at the last minute that FATCA wasn’t going away and it wouldn’t fly with the government’s banker buddies to risk 30% penalties to the banks in the US while gambling on the faint hope that the Republicans can repeal FATCA and make the repeal stick if Obama vetoes the repeal. To much risk, too many unknowns, so they cobbled together a mess.
Or maybe it’s a mixture. Who knows? Will we ever know? If it is sabotage, there’s no way they’ll admit that, and anyone who could leak that would get fired PDQ plus would be doing everyone in Canada a massive disservice, would realize that, and for one or both reasons wouldn’t likely leak it.
My idle speculation for whatever it’s worth. I’m still never going to vote for the Tories after this (not that I ever did, but sure won’t ever now, no matter how “inexperienced” or “lacking judgment” anyone says about Trudeau or Mulcair or anyone else. Even if the Tories are experienced and do have judgment, what they’re doing is unacceptable to me. Being good at being awful is not a recommendation to get me to vote for someone.
NDP MP Charlie Angus, in the Timmins Today
“When I am being contacted by 80-year-olds who have lived in our country for half a century that they are being told to turn over the details of their life insurance policies, this is an unfair intrusion.”
http://www.timminstoday.com/2014/03/27/canadians-deserve-answers-american-foreign-account-tax-compliance-act/
@ Schubert….
If it is sabotage, which I expect it is, of course the government is not going to brag about it. Governments don’t have to work very hard at looking stupid. Most people assume that they are wasteful and incompetent.
I don’t think that’s the case here. I think our people want to drag it out as long as they can. I also think our people realize that Obama would veto any attempt to repeal it, so the more they can drag it out by making themselves look foolish, the better it is for everybody. If they can drag it out until he leaves office, so much the better.
As far as the Cons go, they are, on this issue in my opinion the best of a bad lot. We have all seen Trudeau’s apparent indifference to all of this, and the NDP has never been electable federally. The Cons have been walking a fine line, but when the going got tough 3 years ago on the OVDI, Flaherty stood his ground. I doubt that Trudeau even knows or cares what FATCA is. He comes across to me as a milquetoast that the Americans could really push around.
The more the government can drag this out also provides more time for people to educate themselves. I don’t think we have seen the worst from the Americans yet. Their country is in serious decline, and they will get desperate. Nothing would surprise me. For example, is it outrageous to suggest that they will bully foreign banks resident in the States (TD has a big presence there) to extract fines out of their account holders in Canada? It may seem preposterous, but years ago what they are doing now would have seemed preposterous.
Yes! Let’s drag it out. Let’s make the Americans look more and more like the pariahs that they are. If we make everything work smoothly, people just might assume that it’s ok, that it’s no big deal.
Above all, we need to vigorously campaign against people cooperating with banks in Canada in providing information that is unconstitutional. Anecdotal evidence I have seen suggests that banks at the branch level are going along with the idea of obfuscation. Every banker I have talked to agrees with me. They don’t want to bothered. If the account holder is a legal resident, they are turning a blind eye.
It’s there, at the information gathering stage that we need to really stonewall them.
Berg doesn’t hesitate to assert that:“…… all right minded people would agree that life under the IGA is much better than would have been without it….”:
http://isaacbrocksociety.ca/2014/03/31/more-on-feds-bury-fatca-law-in-budget-bill-w-no-mention-in-press-release/comment-page-3/#comment-1355320
Democrats Abroad member and rising star in the Compliance Industrial Complex defines ‘right-minded’ as those who welcome the FATCA IGA – And, what does he call those who are not?
Artic Grayling I definitely think the Conservatives did a better jobs than liberal. Compare our agreement with both European FATCA and the 1995 US Canada tax treaty.
Most people also do not realize that if USA impose that 30% withholding it would devastating to the Canadian economy. We export bulky commodities to USA they sell high tech stuff through China. (apple etc)
Blaze is there any plans to include a constitutional challenge to 1995 Canada USA tax treaty? This treaty does unofficially recognizes the USA tax laws in Canada and allow collection from permanent resident and Canadian citizen if they did not relinquish earlier. Canadian citizen are protected by the fact that Canadian courts will not collect taxes for a foreign government under the revenue rule but there is always a slim possibility it can change.