All posts by Blaze

More Renounce US Citizenship But Defy The Stereotype

A couple of familiar names are featured prominently in the Associated Press story More Renounce US Citizenship But Defy The Stereotype.
Carol Tapanila (aka Calgary411):

“You know, we are not rich people and we are not tax evaders and we are not traitors and I’m more than tired of being labeled that way,” Tapanila says.


John Richardson:

Decisions to renounce “are driven by a whole range of emotional considerations. … You’ve got anger, you’ve got fear, you’ve got a strong sense of indignation,” said John Richardson, a Toronto lawyer who advises people on expatriation. “For many of these people, this is not a tax issue at all.”

Peter Dunn (aka Petros at Brock) also tells his story.  Many of the other names are not familiar to us, but their stories are.
I understand this Associated Press story will be in many more American newspapers tomorrow.

We Intend to Commence Litigation Challenging Canadian FATCA IGA Implementation Legislation on Behalf of All Persons in Canada and Those Impacted by FATCA in the Rest of the World

Stephen Kish and Lynne Swanson have reviewed the legal opinion provided by constitutional lawyer Mr. Joseph Arvay on the constitutionality of the pending legislation “Canada-United States Enhanced Tax Information Exchange Agreement Implementation Act”.  This act is aimed at implementing the “Intergovernmental Agreement” (IGA) designed to make the “Foreign Account Tax Compliant Act” (FATCA) operative in Canada.
The opinion has also been discussed with Mr. John Richardson, a Toronto lawyer, with whom we now have solicitor-client privilege, and who will be part of Dr. Kish’s and Ms. Swanson’s “litigation committee”.
The lengthy opinion provides in detail the pros and cons of the arguments, and possible outcomes.
There are good arguments that the proposed legislation infringes at a minimum on constitutionally protected rights and freedoms.  Nevertheless, there are also arguments that the Government of Canada may employ to counter our position and, we emphasize, there is no certainty that litigation will be successful.  Further, any litigation will be hard fought and very expensive.  This litigation is not for the faint of heart.
Given the opinion of Mr. Arvay and discussion with Mr. Richardson, we advise that it is our intention to take all necessary steps to commence litigation against the Government of Canada once the IGA implementation legislation is enacted.  Moreover, the nature and impact of the unprecedented legislation on all persons in Canada and those throughout the world who will be impacted by FATCA demands that we exercise this option that is in the public interest.
Very significant fundraising will be required.
Stephen Kish
Lynne Swanson
Cross posted at Isaac Brock Society


Legal Opinion on Canadian Constitutionality of FATCA IGA Legislation Received Saturday April 12, 2014

Dr. Stephen Kish and Lynne Swanson today received a very lengthy and comprehensive legal opinion from constitutional lawyer Joseph Arvay on the constitutionality of Canada’s pending FATCA IGA legislation.
We are reviewing the document and will get back to you.
Lynne Swanson
Cross Posted at Isaac Brock Society by Stephen Kish.

How The U.S. Pulled Off The Great Canadian Privacy Giveawa

By Arthur Cockfield and Allison Christians in today`s Globe and Mail: How the U.S. Pulled Off the Great Canadian Privacy Giveaway.

For the first time in Canadian history, our federal government is preparing to provide a foreign government with sensitive personal financial information about hundreds of thousands of Canadians. It is doing so to stave off threatened economic sanctions, and is getting nothing in return.

Their article tells the “`sad saga“ of how the US managed to pull it off and makes a suggestion for an amendment to the enabling law that would allow reporting only on U.S. residents.

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….

    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.


    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.

FATCA in House of Commons Yesterday

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.

From NDP Mike Sullivan

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.
A response from Con Michelle Rempel:
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.
Hmmm. I wonder if Mr. Lizon would be so quick to say there is no breach of privacy if his private financial information was going to be submitted to Poland because he was born and raised there.
At least Michelle Rempel was honest. This is all about protecting the banks, not protecting Canadians.
Cons continue to dodge the Charter question

Lib Rodger Cuzner noticed:

 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?
Back to Con Wladyslaw:
 In the case of the privacy issues and whether or not the legislation is aligned with the charter, we are confident that it is.
I think that is the first we have seen the Cons actually answer the Charter question.  They are confident is aligns with the Charter. Of course, they have said that about a lot of other things on which they were wrong.


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.
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.
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.


Dear PM Harper: What's the Matter With You?

From renouncecitizenship:  @PMHarper: If you won’t stand up for Canada, give other MPs a chance to vote against FATCA.
Here are a few highlights:

What’s the matter with you? Are you the Prime Minister of Canada or an IRS enabler?…
You were elected to be the Prime Minister of Canada, NOT to be  the IRS representative in Canada…
Got a question for you Prime Minister:
Is Canada a country run for the benefit of the banks or for the people of Canada?…
Finally, now I’m just a dumb Canadian schmuk. I might not be able to think. But, I can smell. Prime Minster this FATCA IGA stuff smells bad, and the putrid stench of your government is all over this one.

Powerful letter.