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.
“There would be no information exchanged between the governments to which she is referring.”
OK, is this guy that stupid.
Boy oh boy, I believe they have another think coming on that one!
I sent this email to Michelle Rempel yesterday (and something similar to Lizon). I suggest others blast them as well. They need to know that we will NOT GO DOWN QUIETLY. Thanks to Canadian Cop whose eloquently worded questions for his own MP, I have also used in my emails.
The Honourable Michelle Rempel,
I was born in the USA while my Canadian parents lived there temporarily, and returned to Canada at age one where I have lived ever since. Until recently, my birth in USA meant nothing to me and was merely an interesting fact of my birth. My understanding is that effective July 1, the details of the joint accounts that I hold with my spouse (whose only US connection is through his marriage to me) will be sent to the IRS via the CRA.
My spouse is the breadwinner of our family of five, and earned most of the money we have in our joint accounts. He is livid that our private financial information will be sent to the IRS who will then be allowed to share it with any other 3 letter organization they see fit. Also, he is extremely worried that I will receive a penalty notice in the mail that could potentially be higher than our actual savings, since I have been unaware of my ‘US taxpayer’ status for the 50+ years I have lived in Canada.
Please do not suggest any amnesty programs, as I am not interested in complying with an obviously immoral AMERICAN taxation law that deems birth in USA to confer taxpayer status. If I had known this years ago I would have formally renounced US citizenship (which I had always been told I was “lucky” to have). At this point in my life, the expense and complications would run into the 10’s of thousands and I am just an average middle-class Canadian (notice I do not refer to myself as American).
I find it shameful that the Conservative government is actually going to assist the IRS in pursuing an AMERICAN taxation law that contradicts international norms. What is next? Once the IRS has a detailed inventory of the assets of Canadians it considers its own, do you think it won’t do some more arm twisting to actually collect on the penalties assessed for non-filing of ‘foreign bank account reports’? Since most Canadians with a US birthplace have NOT been filing FBARS (even many who file US tax returns are not aware of FBARS), USA will have a penalty bonanza!
I have the following 10 questions for you regarding FATCA which I hope you will think about:.
1. Do you consider me to be a Canadian who was born in the US, or a “US person” living in Canada?
2. Based on the fact I am Canadian, have worked only in Canada, and do all my banking in Canada, do you consider my bank accounts “offshore” and the business of any foreign government?
3. According to the Master Nationality Rule, a Canadian living in Canada is only Canadian. Do you believe this, or do you believe that a Canadian living in Canada can also be American or Eritrean, and thus be subject to the laws of those nations while in Canada?
4. Do you believe that might makes right (i.e. the US can do what it wants inside Canada, because of its might, but Eritrea cannot) or that Canada should stand against all foreign marauders?
5. Do you support the Canadian Charter of Rights and Freedoms and its guarantees to protect people from unlawful search and seizure and to not be discriminated against based on national origin?
6. Do you support the FATCA IGA, which assists the IRS in a fishing expedition which, while allegedly aimed at tax cheats, will actually result in a massive by-catch of honest, law-abiding Canadians (and we know what becomes of the by-catch on a fishing expedition)?
7. If you answered “yes” to 5 and 6 above, how do you reconcile that, considering the IGA violates the protections guaranteed in the Charter?
8. Do you honestly believe there will ever be reciprocity, when all the US is promising to do is “pursue legislation to provide reciprocity” or do you accept that Canada will get nothing from this except to maintain the status quo (i.e. avoid economic sanctions)?
9. Do you believe Canada is a sovereign country, and should not acquiesce to the extortionist demands of foreign powers?
10. Would the Conservative government be so quick to sign an IGA that violated the Charter rights of any other group except “US persons”, or is the political calculus that Americans are unpopular enough that trampling on their rights will have little political fallout?
I sent this email to Mr. Lizon last night. No reply yet. I will start working on Ms. Rempel tonight.
Dear Mr. Lizon:
I read your recent comments about FATCA in the House of Commons. Please see below the letter that I submitted to the Finance Dept. about FATCA:
Tax Policy Branch March 10, 2014
Department of Finance
Canada
Dear Sir/Madam:
I wish to voice my strongest objection to the proposed information exchange between Canada and the USA for tax purposes. This agreement allows Canada’s sovereignty to be surrendered to the United States by allowing the US to enforce (through the foreign American law “FATCA”) their system of citizenship-based taxation. The United States believes that it has the right to tax “US Persons” around the world. There are thousands of innocent hard-working Canadian citizens of (often distant) US origin who live in Canada, earn income in Canada, pay taxes in Canada and have no economic connection to the US. It is immoral and unjust that these people should be pursued by the United States IRS for taxes and penalties. It essentially amounts to extortion.
It is outrageous that the United States, which prides itself as being the home of “freedom, truth and justice”, would try to exert control over people around the world in this way. No other country, save for Eritrea, acts in such a manner and no other country would be allowed to act this way were it not for the economic clout that the US wields. It is very disappointing that Canada would plan to comply with this American aggression, breaking its own privacy laws in the process (having the CRA be an intermediary in the transfer of confidential account information still amounts to a loss of privacy). It is also a violation of Canada’s Charter of Rights and Freedoms, whereby Canadian citizens of US origin are going to be discriminated against on the basis of national origin.
It is sad that the current Conservative government is planning to betray many loyal Canadians. Compliance with FATCA will result in a weakening of Canada, as Canadian capital will be extracted from Canada and deposited in the US Treasury. The United States’ threat of a 30% withholding penalty on US source income should be tested on the basis of principle in upholding Canadian sovereignty.
I urge Canada to reconsider this planned complicity with the US and either reject the agreement or ensure that it is amended to only apply to residents of the United States with Canadian financial accounts. It is hypocritical for Canada and the United States to claim that this is a reciprocal agreement, as Canada does not practise citizenship-based taxation and the United States is not agreeing to provide financial account information on US residents.
Thank you for your attention to this matter.
Mr. Lizon, I am a Canadian citizen from birth who has lived my life in Canada. You don’t seem to understand that having private banking information being sent to a foreign government is a breach of privacy. You also don’t seem to understand that under section 15 of our Charter of Rights and Freedoms, discrimination on the basis of national origin is prohibited.
I see that you were born in Poland. Would you like it if the banks searched all their accounts for “Polish persons” and handed that information over to the Polish tax service for unjust double taxation, fees and penalties? That would be discrimination against Polish persons in Canada, a violation of our charter.
I would appreciate your reply, indicating that you understand the points made in my letter, and that you now understand section 15 of our Charter.
Yours sincerely, XXXXX