From Hansard June 5, 2014
Peter Julian (NDP) “Mr. Speaker Words fail me…
The worst part of this closure motion, this time allocation motion, is the provisions of the bill. We are talking about FATCA, whereby a million Canadians of American origin would simply be flushed away by the current government. They would have no constitutional protections, no privacy protections. Even though we pushed for them at committee, the government refused to adopt them.
Mr. Speaker, I have a question on Part 5 of Bill C-31, specifically on the issue of FATCA and its application to registered savings plans, RRSPs, registered education savings plans, and registered disability savings plans. Those plans have matching grants provided by the Government of Canada, funded by the taxpayers of Canada, that are intended to go to people with disabilities or to young people to save for their educations. Under FATCA, earnings from those deposits made by the Canadian government would be taxable by the IRS.
Does the Minister of State (Finance) believe that this would be consistent with the intentions of those programs and that it would be appropriate for the Canadian taxpayer to be funnelling money to the IRS and the U.S. treasury?
Second, has the government calculated how much money would be going to the IRS from the Canadian treasury as a result of FATCA and the provisions of this bill?
Kevin Sorenson (Conservative): Mr. Speaker, during question period and at other times FATCA has come up a number of times. I feel, though, that the member’s question was somewhat misleading, because as Canadians listened to that question, they believed that all Canadian taxpayers would now be forced to reveal their savings and their income to the IRS or to the United States. That is untrue.
The member should know, and he does know, that the FATCA legislation was created and imposed in the U.S.A. It was enacted unilaterally to target American citizens living abroad in other countries, many of whom were Canadian citizens as well, many of whom have dual citizenship. As long as they continue to be American citizens, the United States legislation dictates that Canada must comply.
Let me say this. Our former finance minister, Mr. Flaherty, was troubled by the original legislation brought forward by the Americans, and I know a lot of Canadians had concerns with it as well. That is why this government negotiated a better deal through an IGA, an intergovernmental agreement, that would prevent certain things from being revealed to the Americans. Those would be things like RRSPs, tax-free savings accounts, or disability savings plans. All those were not included because of Canada’s strong intergovernmental agreement with the U.S. on FATCA.
Mike Sullivan (NDP): Mr. Speaker, the implementation of FATCA would have serious implications on children in the member’s riding.
The implementation of FATCA, according to James Jatras, who was a former U.S. diplomat, would have the purpose of nullifying Canadian protections under the Bank Act, the Personal Information Protection and Electronic Documents Act, otherwise known as PIPEDA, the Canadian human rights code and, especially, the Charter of Rights and Freedoms.
These people are not just resident Americans. At least a million of them are Canadian citizens. Many of them live in her riding.
Claims that the personal data of Canadians would not be forwarded to the NSA and other intelligence agencies are laughable. Some of those persons are children.
What would the member opposite like to suggest? The bill somehow does not protect the safety, security and personal information of these people, including children.
Jeff Watson (Conservative): Mr. Speaker, I appreciate the member did not pay attention to my intervention, but I will try to answer his question on FATCA nonetheless.
I will not speak to what the U.S. motives are in all of this. It is its own sovereign decision as to whether it wants to start looking at dual citizens abroad, for example, but I will say that if the government did not act, the U.S. rules would still be in place. In fact, they would be far more stringent than what is coming out as a result of an agreement we made on that particular issue.
I think we have done some amount of service to dual citizens on this side of the border by doing the best we could to obtain an agreement, for example, that would exempt certain classes of investments altogether from consideration, so this is a marked improvement relative to what would have been in place had there been no agreement.
Jinny Jogindera Sims (NDP): We also have the government rushing to sign agreements. For example, it seems to have lost the concern it had around privacy issues when it was in opposition. Canadians care very deeply about the privacy issue, but once again we are giving away valuable information through the IRS and FATCA. The justification is that because the government may suspect someone could be doing something, it has a right to surveillance without any kind of legal right to do so. The attitude is, “We are the government, and we now have that right”.