I found some interesting comments in Hansard by Halifax MP Megan Leslie on FATCA made on Febuary 27th. They actually came up in the context of Canada Panama relations discussing how the US was claiming to go after tax havens such as Panama using legislation such as FATCA but instead FATCA is being used to go after lawful Canadian citizens. I have posted the comments below:
Panama’s complete lack of taxation transparency has even led the OECD to label the nation a tax haven. As another parentheses about tax havens, we have recently seen the U.S. trying to crack down on tax havens. It loses about $100 billion a year to offshore tax evasion and avoidance. Canada loses about a tenth of that or $10 billion a year. The U.S. is trying to crack down on these tax havens by making sure that people are tax compliant and introducing new legislation like FATCA, for example. The problem is that they are actually scooping up the wrong people. They are not going after the folks who are tax avoiders or are ferreting off this money and trying to hide it, but are hitting ordinary citizens, like ordinary Canadians.
In my riding of Halifax, there are many people who have immigrated to Canada from the U.S. and are dual citizens, as well as people who are American by accident, whose parents were American citizens and whose offspring are therefore considered American citizens for tax purposes. They did not know they had to file taxes over all these years and are now finding out that they may face tens of thousands of dollars’ worth of fines. The phone was ringing off the hook in my constituency office from these folks calling and saying that they were scared, too scared to find out what their rights were and too scared to find out if they are considered U.S. citizens and do not know what to do.
As a result, we held an information session on rights and filing obligations, how the amnesty works, and those kinds of things. Myta Blacklaws in my Halifax office organized this information session. We booked a room for 60 people but when we managed to fit 125 people into that room, we started putting people into a second room. It was unbelievable. It was standing rooms only, as it were. This information session was led by a woman named Blair Hodgman, an immigration lawyer, and some tax accountants were also present.
It is really stressing people. People are scared and under a lot of pressure. Yet the NDP has been asking the Conservative government to take action to start discussions with the U.S. about what is going on, why regular folks are being penalized and that this is not what we are going after with the tax haven legislation, that this is not the intended effect and that we should be reasonable.