As many of you may have gathered by now, I’m not a Tory, I’m a “Dipper” (NDP supporter) from way back. But I am beginning to like Jim Flaherty. Certainly more than any other Tory in recent memory (with the exception of Jim Prentice, for whom I also have great respect, after his stance for the free vote on gay civil marriage in Canada a couple of years ago).
In today’s mail (remember Canada Post?) I got a three-and-a-half page reply from Flaherty to three emails I’d sent last month. Actually not “snail” mail, it arrived the day after it was dated (but then, I live in Ottawa). It may be a new standard reply now, and others may have received one recently, but there’s a passage in it that I haven’t heard before, on FATCA, which I’d like to pass on, with pride and hope.
I won’t quote or post the whole letter, because much of it is the same as we’ve heard, but there is interesting (for me) new wording and tone that renews my faith in Flaherty. Here it is, minus the paragraph breaks but otherwise un-edited. (I’ve added a couple of asides in parentheses and have underlined three sentences for my emphasis.)
“A related piece of US legislation causing similar concern (my note: similar to the concerns about FBAR and tax filing requirements, also discussed in the letter) is FATCA, which is proposed to come into force on January 1, 2014. To be clear, Canada respects the sovereign right of the US to determine its own tax legislation and its efforts to combat tax evation — the underlying objective of FATCA. In fact, our two jurisdictions co-operate to prevent tax evasion. But FATCA has far-reaching extraterritorial implications, as it would turn Canadian banks into extensions of the IRS and would raise significant privacy concerns for Canadians. We strongly believe this is unwarranted. Canada is not a tax haven and people do not flock to Canada to avoid paying taxes (me: boy is that an understatement, I did my CRA tax return this afternoon – yowch). In addition, we have existing ways of addressing these issues with the US through our bilateral Tax Information Exchange Agreement. We strongly believe that to rigidly impose FATCA on our citizens and financial institutions would not accomplish anything except waste resources on all sides. As such, the Government of Canada has and will continue to express its strong concerns relating to FATCA with the US government. We are actively seeking a solution that both countries will find agreeable.”
The rest of the letter is a repeat of the protections against FBAR penalties, for all Canadian residents, and protections against collection of any US tax liabilities incurred by anyone in Canada who was a Canadian citizen at the time the alleged liability was incurred. And the usual (less impressive) references to the December 7 “guidance” that shows the US has “listened to our concerns,” which I think is a bit overly optimistic. Plus a repeat of the one-page fact sheet about requirements and where to get advice (get a tax advisor, see these websites …). And a repetition that CRA will NOT collect FBAR penalties on anybody, nor US tax liabilities incurred when the victim was/is a Canadian citizen.
But I like the tone of the sentences in the quotation above, especially the underlined sentences. Go Jim, Go!
Stay tuned; we’ll see what the mutually-agreeable result is, if any. But I don’t sense that Flaherty, and by extension the current government, is going to be any kind of pushover on this discussion. “It ain’t over until the fat lady sings.” And as recently as yesterday, our Finance Minister is still standing firm on this.
I’m remiss, there’s another paragraph that says Flaherty is listening to the anquish many people have expressed in letters to him, and on this forum:
“Faced with the knowledge they have an obligation to file US tax returns (even if they most often do not actually owe any taxes), we appreciate that many dual citizens want to fulfill that obligation. But we also understand that the threat of prohibive fines for simply failing to file a return they were never aware they had to file has become a frightening prospect causing unnecessary stress and fear among many honest, hardworking individuals.”
That was on the first page; the FATCA quote above on my post was on the second page.
As an American living in the US I think all Canadaians should be proud of the stand being taken by your finance minister.
Just a few minutes ago I heard on TV a replay of President Obama’s statement in a speech made early in his administration apologizing to the world for past acts of “arrogance” on the part of the US, without identifing what these acts were. He assured his listeners and viewers in that speech that those days were a thing of the past now that he is president.
Nevertheless in March 2010 he signed FATCA into law thus obligating every foreign bank and financial institution in the entire world to identify which of their account holders are “US persons” and to provide detailed reports to the IRS on these persons and their accounts, by name address, Social Security number, etc., plus information on the deposits into and withdrawals from each of these accounts. And those banks and financial institutions that fail to do so will be penalized by a 30% withholding tax on certain money transfers from the US.
To me this about the biggest example of bullying arrogance you can possibly imagine. Where oh where is your commitment to stop this arrogant behaviour, Mr. President?
Great, Shubert.
Thanks for standing strong, Mr. Flaherty. And, I am glad you acknowledge your letters from the many anguished people — telling us you are listening.
We are, in turn, waiting and listening for what comes next. Our appreciation for all you’re doing on behalf of the US persons in Canada, both citizens and residents.
@schubert1975
There was an article that recently published on the website of the Financial Post that I think is somewhat telling of the current governments view on banking matters. What it discussed was that in fact the recent crackdown on mortgage lending activities by OSFI(the entity that regulates banks in Canada) in fact appears to implemented on the direct orders of Flaherty and the PMO/PCO who made it absolutely clear to the public servants at OSFI that they want absolutely no “problems” in Canada’s banking system.
http://business.financialpost.com/2012/03/21/ottawa-leaning-on-bank-regulator-over-mortgage-disclosure-analyst/
I gave up… that’s probably why I don’t post much of anything anymore. My life is where I am at, and my wife, and my kids…
I AM American. I was born and raised in the US. But my wife and little boy are here. I have no choice.
Why didn’t the founders of the FATCA work to have small “fries” like me excluded???? The US is the US with lotsa issues and problems. I will gladly pay$450 to be “clear” of the US because that is the equivalent of 2 psychologists’ appointments.
I won’t even get started on Semitic blood. (no, nobody in my family is israeli, but we have strong ties to the Middle East.)
I hope the US works out its issues.
@Rogersaid: “Just a few minutes ago I heard on TV a replay of President Obama’s statement in a speech made early in his administration apologizing to the world for past acts of “arrogance” on the part of the US, without identifing what these acts were. He assured his listeners and viewers in that speech that those days were a thing of the past now that he is president.”
The arrogance of Obama administration, the uncalled for aggression/attack on innocent expats (who are also known as tax cheats and traitors living abroad) and economic reforms to transforming the USA into a socialist welfare nation is temporarily suspended until November 3rd of this year.
@ Roger Conklin
It is heartening for us on the north side of the border to hear from neighbours to our south, such as you, that you understand and share our concerns and outrage over FATCA and the draconian FBAR and other penalties. It encourages me to think that not quite all of the US has been taken over by the lunatics in the Washington DC asylum.
And yes, though I have my concerns about several unrelated policies of my current Canadian federal government (most of which BTW have little or nothing to do with Flaherty or his Ministry per se), I am indeed proud of the stance my Finance Minister and his Department are taking on these issues. I am sure that US-born and US-parented residents of certain European countries wish their countries’ politicans had half the comprehension, spine and balls that Flaherty has. But then, we live next door to the elephant, and we’re all used to pushing back when it’s obvious that the time has come (again) to do so.
@schubert1975
For better or worse I wonder if the “other issues” the current government is facing in fact make this a good opportunity to publically push back. The Conservatives poll number always seem to go up when they seen as taking the Canadian “nationalist” position and go down when the start screwing around with all the stuff their hardcore base is interested, the dirty tricks etc.
Wow the Canadian government’s been trying to get the US government to be reasonable for almost 2 years now. It might take a change of administration before we see any progress.
At the end of May, the Canadian Institute is putting on a FATCA compliance seminar in Toronto, and I wonder if it’s worth any (or many) of us attending. The speaker’s list is all bank and insurance folks, but with an update from Flaherty’s department — not Flaherty himself, obviously, or they would have trumpeted that in 78pt boldface at the top of the agenda. I’ve attached a link here to the agenda:
Notice that there is an entire session on how institutions can get around privacy concerns. In fact, this whole agenda is heavily-weighted on the “how to comply” front with nary a word on how not to. I’m sure (well, kinda) that this will get media attention — at least from the Globe — so it will be a good idea to watch that too.
I could get media accreditation for this (spent my whole life as a reporter) but I’m not sure I can get to Toronto that weekend — in fact I’m pretty sure I can’t. Anyone in the centre of the universe interested in this?
OK — I thought I’d attached a hyperlink. Is there a trick to that? copy & paste: http://www.canadianinstitute.com/FATCA/agenda
@Arrow
I think you will probably hear more significant news at the end of April with closing of comments on the proposed FATCA rules. You will be probably see an official submission from Flaherty then.
@all
Not sure this is the correct thread for this or not. At the suggestion of a lawyer who deals with Charter Rights and Privacy issues, I had sent a letter to our Privacy Commissioner, Ms. Jennifer Stoddart about 10 days ago. I have just hung up from someone in her office who phoned to thank me for the letter. However, she said, although the Privacy Commissioner is ‘monitoring the situation’, it is not something that her office can address. Her words indicated this is a matter of the Canadian Bankers Association and our Federal Finance Department and treaties that Canada has with another country. I told her that I understand that our government has yet to make a decision regarding FATCA, but my concern and the concern of many others was that the ultimate decision might be against the Charter Rights of many Canadian citizens. Again, she repeated that it was not a ‘Privacy or Charter’ issue. I told her I was very disappointed to hear this but did thank her for the call.
@tiger
I am not sure what she is saying is correct in fact the privacy commissioner has already gotten involved with the issue. In the response the governmnent made to the NDP last week the Minister of Industry Christian Paradis stated the Privacy Commissioner is involved in discussions with the Department of Finance on this issue. Someone doesn’t seem to have their message straight.
@tiger
If you wish you might want to get back in contact with that lawyer I suggested. Again I don’t think its time to lawyer up but it does seem as if someone if trying to avoid the issue which is pretty remarkable because the privacy commissioner is usually quite willing to run head first into these type of matters.
@Tim, Perhaps the Privacy Commissioner has chosen at this stage in the game to be very private about what is really gong on. Here’s hoping!
@Roger
To be fair to them their most recent public claim is that they need to analyze the draft rules before they can make any conclusions. I am not sure in fact they can really do anything until final rules are released.
Here is an article from last summer specifically mentioning the privacy commissioner.
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20110624/RBTAXESPRIVACYMCKENNAATL
@Tim
As you know, Blaze and I and Somerfugl did speak to the lawyer you suggested. He was the one who suggested we write Ms. Stoddart. The response this afternoon from her office really had me confused. As the lawyer said, it isn’t a privacy issue yet because there is no answer yet on what they will do regarding FATCA. But surely, if our government ‘bows down’ to the IRS and presents them with a tray of information regarding certain Canadian citizens, then at that time there is a violation of charter rights. The words on the phone today were most definitely ‘ the privacy commission is monitoring the situation’. Perhaps, Roger is correct and the ‘privacy commissioner has chosen at this stage in the game to be very private about what is really going on.’
My prediction is you aren’t going to hear much until closer to April 30th. I do think it is beneficial though the more individuals send letters to Flaherty and Privacy Commissioner Stoddart the better letting them know as citizens you are aware of the situation and expect appropriate action.
@ schubert
Thanks for posting this. It’s the kind of thing we need to focus on at ISB.
For a variety of reasons, I have tried to say off Brock and away from IRS issues this week. However, I received a call similar to Tiger’s this afternoon, so I’m jumping back on for a bit.
@Schubert, Others: I received the same comments about FATCA in a letter from Flaherty a couple of weeks ago. Unfortunately, he does not still does not seem to be willing or able to state firmly and clearly that Canadian banks must adhere to Canadian law and that Canadian law will not be changed to accommodate a foreign government. Canadians need to hear that from him now.
@Tiger, Tim and Others: I also received a call from an “agent” in the Privacy’s Commissioners office. My sense was she is one of many in a call centre. I’m not certain the Commissioner even saw our letters.
In any case, she said essentially what Tiger was told. She said “there is nothing we can do under privacy legislation.” She said this was because this was “foreign legislation.”
I said that is exactly the point. A foreign law in infringing on the rights of Canadian citizens to privacy in banking in Canada. She said this is the result of a “trade agreement” between the Ministry of Finance and the US and the only party who can deal with it is the Finance Minister.
I knew then something was not right (and became somewhat) and insisted there is not trade agreement which deals with the issue. She continued to insist it is a trade agreement and said we should deal with the Finance Minister. So, clearly, I was dealing with someone who is uninformed. When I asked her if she was certain there was a trade agreement or if she was speculating, she seemed less certain and again referred me to Finance Minister.
When I asked about my rights as a Canadian citizen, she insisted I am a “dual citizen.” When I again pointed out to her she was incorrect, she said the Americans still consider me a US citizen. She had no information upon which to make that determination. (Now, it looks like it’s not only U.S. civil servants who give answers that suit them when they don’t have the full facts or information.)
The agent ended the conversation by suggesting I contact a lawyer. I told her a lawyer had suggested I contact the Privacy Commissioner.
When I pointed out the Privacy Commissioner has already spoken publicly about this, the agent didn’t have much response.
I must admit I was not as polite as Tiger. I did not thank her for her time before I hung up.
So, it looks like it’s all back to Jim Flaherty. I will let the lawyer we consulted who suggested the Privacy Commissioner know the outcome of this.
@Blaze
You definitely ‘think’ on your feet better than I do. I ‘thought’ of all sorts of questions after I got off the phone but too late. I have to admit that when I thanked her for her time, it was said through tears and the caller was well aware that I was crying. As was my youngest son, who I immediately phoned to share the disappointing news.
I am so very tired of all of this and I have no doubt most of us on this site are just as tired of it.
@Blaze
This sound like some really bogus information. What exactly is the trade “agreement” they are talking about. I don’t think whoever received your letters was very competent at the Commisioners office.
It sounds like the woman at the Privacy Commission was making stuff up as she went along.