Cross-posted from USxCanada InfoShop
New Democrats Offer More Support Than Conservatives or Liberals Do?
Why has support for beleaguered American citizens been more apparent among New Democrats than among Conservatives? Should support for and defense of as many as a million Canadians be seen to fracture along party lines?
The 16 Sept 2011 letter that Finance Minister Jim Flaherty sent to several major US newspapers appears to be the only public representation that the Canadian governing party has made toward the United States on behalf of US citizens who are resident in and pay taxes to Canada. Internally, the Department of Finance and Canada Revenue Agency have stated that on the basis of the existing tax treaty, Canada will not enforce FBAR penalties at all, and will not enforce US tax liabilities incurred by persons who are concurrently Canadian citizens. This “relief” derived from interpretation, not action.
At the same time, the official opposition New Democrats have made multiple shows of strong support for the plight of a mostly jeopardized class that numbers well up into the hundreds of thousands. Available data indicates that no more than five percent of the group are fully compliant with US requirements.
• As the story first began to break in August 2011, Don Davies went to the media with the story.
• The NDP British Columbia Caucus has shared a strong letter (with signatures of 12 Members of Parliament) addressed to two relevant Ministers on 14 Oct 2011.
• On 17 Nov 2011 Don Davies posted his August letter sent to three relevant Ministers, together with the reply that he received.
• Alex Atamanenko and Jean Crowder have published op eds on the topic in their ridings.
• Denise Savoie has posted to her web site a statement of NDP position on FATCA.
• Megan Leslie recently sponsored a standing-room-only forum for her constituents in Halifax.
Meanwhile among the Conservatives in power, perhaps the only ground-level public expression of concern has come from John Williamson, whose New Brunswick constituency appears to be particularly affected.
This has troubled me for some time now. I wrote about this months ago to my Conservative MP, to Flaherty, and to Harper. I didn’t even get an acknowledgement of my letter, let alone a reply. I fear that a sell-out is in the works, some way of relaxing privacy laws to allow banks to send info off to the IRS. I hope I’m wrong, but the Tory silence on this is very worrisome.
And whither the Liberals? They seem to be MIA in this debate.
Thanks for this post; it shows that you’ve done a tremendous job of keeping up with important news story and archiving them. Everyone should have a look at your website.
I appreciate also the even-handedness of your post–because the Isaac Brock Society must be careful to gather as many lost sheep as possible, including those who are from all the major parties in Canada. We should be intentionally political but not partisan.
The actions of the United States threatens the status quo of its relations with Canada. The Conservative government has taken the specific action of refusing to collect US taxes on all Canadian citizens and saying that it would not collect any FBAR fines on any residents of Canada. These are strongly worded statements for which I am very grateful. I was encouraged to come out of the shadows about my knowledge of the FBAR requirement because of it. Now I know that my Canadian wealth is not subject to whimsical FBAR fines, I have the courage to hide in the open and in broad daylight.
I think it is very appropriate for the Loyal Opposition to be vocal–indeed even more vocal than the government. Their job is to criticize the government. For their talk doesn’t have force of law and does not immediately affect the relations between the United States and Canada.
Frankly, I think that the problem with the current government is that they desire to conserve the status quo, but they are beginning to see that it is impossible to do so, and hence, Harper’s strongly worded statement saying that we would diversify our client base for our energy products: I.e., if the US doesn’t want our oilsands, we will find someone who does. Desiring to maintain the status quo is not unpopular in Canada. The Isaac Brock Society has its work cut out to win the popular sentiment against the United States and the status quo. If at the point the Harper government sees that the popular sentiment has changed against all this trade that we have with the US and he sees that Canadians would rather starve with sovereignty than be wealthy with the United States telling us what to do, then he will have the courage to be more forceful with the Yanks, or he will lose an election. Our job, therefore, is to wake up all Canadians to the threat that we face, and convince them, “Today it is the US expats, tomorrow it is you too.”
I made up a comment on the blog of a Canadian investment blogger about his portfolio being overweight in US stocks, how that was dangerous because of the coming flight of foreign capital from the USA because of FATCA. His response: “Seriously, why do you waste your time commenting here every ten minutes? I don’t even read my blog that much. I could care less about FATCA, I am a Canadian.” You see, we have to convince the man on the street and create a groundswell of knowledge about our subject before we can expect the government of Canada to do much more.
I believe Elizabeth May(MP for Saanich and leader of the Green Party also wrote a letter making light of her own situation being born in the US and that when she became a Canadian citizen in 1974 he she did so with the understanding of renouncing her American citizenship but she now believes in her own situation the US may not accept that position. I will try to find a link to her letter.
In terms of pure politics this seems to be a major issue in BC which I suspect will give pause to the idea of the Conservatives doing nothing. BC has always been more Reform party territory not old Mulroney Progressive Co.nservative territory hence the famous Reform NDP switcher. So in some sense this issue is a pretty good opportunity for the NDP to get back BC voters who haven’t voted NDP in a while. While some will not like the sound of this if anyone is Quebec this a great issue to try to get the remaining Bloc Quebecois MP’s on. They can all make a big deal how a sovereign Quebec would never give into the US on this issue etc.
I would also recommenend someone get a twitter account and post a tweet everytime a new post comes up here under hashtag #cdnpoli #bcpoli and there a few others. I might to try to set one up latter today. A lot of politically important people in Ottawa monitor #cdnpoli frequently so its a way of getting their attention.
I can personally reinforce the experience with the NDP. I’ve sent multiple letters to Flaherty and Baird, as well as to both Liberal and NDP finance and foreign affairs critics, as well as to Denise Savoie (who is not my MP) and Paul Deward (who is my MP), both of whom are NDP.
From Flaherty I have since October 31 received only robo-acknowledgements from the Finance Department’s Ministerial Correspondence Unit, which I know from government service for several decades is required by policy, if not also by law, to at least acknowleged receipt. To date I have not received any reply other than acknowledgements from Finance or Flaherty.
I have received no response at all from Baird of Foreign Affairs.
I have received no response at all from either of the Liberal critics.
I have received mutliple email REPLIES, not merely acknowledgements of receipt, from Savoid, Dewar, and the NDP foreign affairs critic, as well as personal telephone calls from the staff of both of the latter two.
The facts speak for themselves. No this is not and should not be a partisan issue, it is a matter of justice and of Canadian sovereignty that should engage the Government and also opposition MPs of all parties. To date, in my personal experience at least, only the NDP has replied.
That being said, I do know of one Forum participant in Calgary who has written to a couple of Calgary MPs (who of course are Conservatives) and who HAS received thoughtful and informative replies from those MPs. So this isn’t just about the NDP, there are some Tory MPs who do seem to respond to their constituents’ concerns.
And I have heard that some folks who have written Flaherty have received replies from his office. Why I haven’t, I don’t know.
If anyone has received any reply from any Liberal MP on this issue, I urge them in fairness to report that on this thread. Because otherwise the inescapable conclusion is that the Liberals either have no sympathy or are so navel-gazing about their leadership problems they don’t “have time” for our concerns. But then the NDP is in the middle of a very lengthy leadership race with many candidates, and they manage to find the time … So that latter excuse is wearing very thin with me, from the Liberals, if in fact they aren’t responding. They sure haven’t responded to me, however.
I actually saw an interesting post on linkedins “FATCA Forum” from someone indicating that the US is backing down from a “hardline” implementation of FATCA due to vigourous opposition from foreign countries(I assuming Canada’s at the top of the list). However, talks on a FATCA alternative between the US and other countries are only starting this week now that Schulman et al are being forced to back down(Again this just a rumor of Linkedin). So maybe Flaherty is making some headway. However I do believe if a “deal” is reached it needs to be scrutinized heavily.
http://www.linkedin.com/groups/Has-any-one-else-heard-3731046.S.90444099?qid=1fa7a6d8-5e68-4047-b9cd-5013ddb0a546&trk=group_most_popular-0-b-ttl&goback=%2Egmp_3731046
I got immediate and courteous response from MP Mike Sullivan (NDP), born in in the US, http://mikesullivan.ca/ and from his constituency office:
” Hi ,
This subject interests me a great deal. However I’m away from my office so will give you a more thoughtful response when I return.
Mike Sullivan MP.”
“Mr. Sullivan is currently out of the country, so I am taking the liberty of providing an initial first response to you. Please be assured I will bring your email to his attention at the first opportunity, likely to be after his Caucus Retreat at the end of January.
…Mr. Sullivan is a member of the parliamentary Canada-US Association and I am sure will be interested in your concerns and in corresponding with you directly. Certainly, it is an issue that is of great interest to him, as he serves as the deputy critic on Persons with Disabilities.”
I have gotten acknowledgement of receipt from both my MP, Michelle Rempel, constituency office and from Finance Minister Flaherty’s office but, disappointingly, nothing more substantial and absolutely nothing at all from the US Ambassador to Canada, David Jacobson (three letters sent).
This is part of one response shubert1975 refers to from the constituency office of Honourable Diane Ablonczy (PC), born in Peoria, IL; presently re-appointed Minister of State of Foreign Affairs (Americas and Consular Affairs) in the new cabinet announced on May 18, 2011. (http://en.wikipedia.org/wiki/Diane_Ablonczy) :
“… regarding your questions and concerns with the U.S.Tax and “FBAR” filing requirements for U.S. Citizens in Canada. … In response to this issue our government has provided the following information that dual Canadian – U.S. Citizens may find helpful:
This fact sheet is intended for information purposes only and should not be construed as tax advice. It was not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding any tax or penalties that may be imposed on such taxpayer by the U.S. Internal Revenue Service or the Canada Revenue Agency. Taxpayers who think they may be affected by any of the measures discussed herein should seek advice based on their particular circumstances from an independent tax advisor with appropriate experience.
· U.S. citizens in Canada have to file U.S. tax returns: The U.S. government requires its citizens living abroad, including in Canada, to file income tax returns and associated tax forms – even if those U.S. citizens do not have to pay any U.S. income tax because they already pay Canadian income tax, and even if they have dual citizenship with Canada. This requirement has been in place since 1913.
· They may also have to file another U.S. form – the FBAR: Under the U.S. Bank Secrecy Act, U.S. citizens must file a particular form if they have a total of more than $10,000 in accounts at non-U.S. financial institutions. This form is the Report of Foreign Bank and Financial Accounts, commonly known as the “Foreign Bank Account Report”, or “FBAR”. The FBAR filing requirements have been in place since 1972.
· Failure to file FBARs can lead to large penalties: The U.S. can levy significant financial penalties for failure to file an FBAR.* There are potential criminal sanctions as well.
· The U.S. offers voluntary disclosure, but time is running out: U.S. citizens who have not been meeting their filing requirements for tax returns and FBARs can take advantage of the U.S. Offshore Voluntary Disclosure Initiative, and face reduced penalties. The deadline for applying was August 31, 2011.
· For more information (including penalties and consequences of non-compliance), please visit the IRS website: The U.S. Internal Revenue Service has information on its website concerning the FBAR and the Offshore Voluntary Disclosure Initiative. Visit http://www.irs.gov/businesses/small/article/0,,id=159757,00.html for information on the FBAR and http://www.irs.gov/newsroom/article/0,,id=234900,00.html?portlet=7 for information on the Offshore Voluntary Disclosure Initiative.
o For more information regarding U.S. citizenship, please visit http://travel.state.gov/law/citizenship/citizenship_782.html
· For advice, please contact a tax advisor: Canadians who think they may be affected by the U.S. filing requirements for tax returns or FBARs, or who may want to take advantage of the Offshore Voluntary Disclosure Initiative, should contact a tax advisor with experience in U.S. taxation issues.
· Please note FBAR is not related to the Foreign Account Tax Compliance Act (FATCA). FATCA is proposed to come into force in January 1, 2014. The Canadian government has and will continue to express its strong concerns with relating to FATCA with the U.S. government. We are actively seeking a solution both countries will find agreeable.
* Penalties imposed under FBAR will not be collected by the Canada Revenue Agency (CRA): The Canada-United States Income Tax Convention contains a provision which allows for the collection by a country of taxes imposed by the other country, including civil penalties. This provision does not apply to penalties imposed under laws, such as the U.S. Bank Secrecy Act, that impose only a reporting requirement (as opposed to those that impose taxation along with reporting requirements). Also, CRA does not and will not collect the U.S. tax liability of a Canadian citizen if the individual was a Canadian citizen at the time the liability arose (whether or not the individual was also a U.S. citizen at that time).
In regards to the Foreign Accounts Tax Compliance Act (FATCA), our government is aware of this law and Finance Minister Jim Flaherty has been actively lobbying the US government to except Canadian banks and financial institutions from this law.
Minister Flaherty argues that this law is highly problematic and places a significant financial and compliance burden on Canadian banks and their customers. He further points out that Canada is not a tax haven and is not a country that restricts the flow of information; as well the FATCA duplicates existing information sharing under an existing Canada-U.S. tax treaty. At this time the US government has agreed to delay the implementation of this law by one year until Jan. 1, 2014.
The Government of Canada continues to work with the United States on finding a solution that will work for both countries.
I will share your message with Ms. Ablonczy for her information. Ms. Ablonczy does appreciate hearing the concerns and opinions that are important to her constituents.
Again, thank you for taking the time to write and express your thoughts and concerns with this situation. I hope that this information will help to address these concerns.
from Executive Assistant
to Hon. Diane Ablonczy, MP
Calgary-Nose Hill
@ Tim or anyone — do you know what the process would be?
Re: “I believe Elizabeth May(MP for Saanich and leader of the Green Party also wrote a letter making light of her own situation being born in the US and that when she became a Canadian citizen in 1974 she did so with the understanding of renouncing her American citizenship but she now believes in her own situation the US may not accept that position. I will try to find a link to her letter.”
Would Government of Canada MPs born in the US automatically receive expatriation of their citizenship when they take office — and automatically receive their Certificate of Loss of Nationality from the US, per below:
Disposition of Cases when Administrative Premise Is Inapplicable
The premise that a person intends to retain U.S. citizenship is not applicable when the individual:
Formally renounces U.S. citizenship before a consular officer;
Takes a policy level position in a foreign state;
Is convicted of treason; or
Performs an act made potentially expatriating by statute accompanied by conduct which is so inconsistent with retention of U.S. citizenship that it compels a conclusion that the individual intended to relinquish U.S. citizenship. (Such cases are very rare.)
*Cases in categories 2, 3, and 4 will be developed carefully by U.S. consular officers to ascertain the individual’s intent toward U.S. citizenship.
@Calgary411
My understanding is that due to the likes of Charlie Rangel, Lloyd Doggett etc. there were changes to make it very difficult to renounce other than through the formal consular process. This was to avoid people running for office etc in foriegn countries and doing other acts to “relinquish” US citizenship in order to avoid the US “exit tax” payable on a forumal renounciation. There was actually a situation where someone got themselves appointed the ambassador to US from some small country to avoid the exit tax while still being able to live in the US. Note: overall this strategy of the US may not be legal under international law or in Canadian court but as of now it is poisition the US currently takes. Policy level position could concievable include cabinet members both provincially and federally or even a party leader like May however, the general goal of the US is to make it difficult for you renounce so it will be up to them how to determine.
I opened up a forum thread on Rabble.ca which is left-leaning NDP sympathetic political site. I didn’t say much about FATCA etc. I just mentioned I was curious as to how familiar people involved in the NDP were with it and what is current situation in Ottawa regarding it etc.
@Tim — Thanks for passing on your understanding of this.
Last week I had sent emails to Canadian MPs who were born in the US, asking, and I think I am allowed to pass on this response, from Hon. MP Diane Ablonsky’s constituency office:
“Thank you for your recent e-mail to the Hon. Diane Ablonczy, regarding your questions and concerns with the U.S.Tax and “FBAR” filing requirements for U.S. Citizens in Canada. Ms. Ablonczy is aware of the situation. However Ms. Ablonczy renounced her US Citizenship when she became a Canadian Citizen…”
I further responded: ” … thank you so much for your prompt response to my email. It is encouraging when that consideration occurs.
If Ms. Ablonczy has indeed renounced with her Certificate of Loss of US Nationality in hand, I congratulate her for her foresight or the legal expertise she was able to hire to advise her to do so. That is not the case for most other US persons in Canada. Can you confirm that Ms. Ablonczy received that very important document from the US, Certificate of Loss of Nationality?”
My original email (with the further replies above, to five Canadian MPs who were born in the US, as well as two Alberta MLAs born in the US, asked:
” …Have you been following all of the IRS instructions and inequitable treatment to US persons in Canada and abroad, for yourself and for your US person constituents affected?
Do you appreciate being painted with the same brush by IRS Commissioner Shulman as for real persons evading taxes that you are a tax evader?
Do you feel that you and your ‘US person constituents’ are second-class citizens in regard to your choices for retirement savings, RESPs and RDSPs (should you have a disabled member in your family), cost of tax preparation, and loss of privacy to the US of your financial holdings?
It is interesting that I have gotten acknowledgements of receipt of the email below from only my MP’s (Diane Rempel) constituency office and the office of Finance Minister Flaherty, with no discussion from them of what their positions are on this or if and how they are proceeding on an issue that affects about one million of their fellow Canadians.
US persons in Canada, not tax evaders, but hard-working, tax-paying people in Canada, are either paying huge sums for advice and help from US tax lawyers and accountants to bring themselves into compliance for back US tax returns and FBARs; threatened into entering into OVDI, which means they are saying they are criminals with huge penalties; hiding their heads further in the sand and hoping and praying that this will go away and they will not be affected, but then afraid to cross the border to visit aging relatives and family; or choosing to renounce their US citizenships, for some at a very great financial cost (a good portion of them “Accidental Americans”). The stress this is putting on families is staggering. Where is the outrage?
You may be interested at the inequities pointed out in this link, just released by the Association of American Residents Abroad: http://aaro.org/position-papers-2011?start=1
I would be interested in your views on this, personally, and for the constituents you represent. …”
I have heard from MP Mike Sullivan and his constituency office and from MP Diane Ablonsky’s constituency office (above). I am awaiting further responses from the other “US person” Canadian MPs and MLAs. Petros had suggested they be asked such questions — and, I agree, we should know how our fellow US / Canadian citizens who represent us feel and will act on these issues — for themselves and for their constituents. It was then pointed out to me that perhaps they fell under:
“The premise that a person intends to retain U.S. citizenship is not applicable when the individual:
1. Formally renounces U.S. citizenship before a consular officer;
2. TAKES A POLICY LEVEL POSITION IN A FOREIGN STATE;
3. Is convicted of treason; or
4. Performs an act made potentially expatriating by statute accompanied by conduct which is so inconsistent with retention of U.S. citizenship that it compels a conclusion that the individual intended to relinquish U.S. citizenship. (Such cases are very rare.)
*Cases in categories 2, 3, and 4 will be developed carefully by U.S. consular officers to ascertain the individual’s intent toward U.S. citizenship.
I would very much like to hear from them as our Canadian government representatives and as our fellow US citizens in Canada. I think it is their duty to weigh in on this important issue.
@Calgary411
I have gotten a few nibles on rabble.ca and I am going to wait and see how many more I get(I haven’t brought up yet any of the conflicts with Canadian law yet). I am also going to get a twitter account going and starting blasting #cdnpoli. Unfortionately it is going to by kind of tough until parliament gets back in session next week. I think one of the primary goals needs to be getting this issue in front of one of the parliamentary finance committees and have all the facts laid out for MP’s. Too much of this on going behind close doors of the banks and the Deparment of Finance with Manhattan project like secrecy(I think the US is pushing heavily on Canadian banks and Finance Canada to keep this story from MP’s). However, over all we are making progress, just need to keep up the pressure.
@Tim — I congratulate you for what you are doing. I think this is an important avenue for us to pursue — these are our Canadian government representatives, elected by us, and we have a right to answers and proper representation.