The following response to the Isaac Brock Society appeared in a comment.
I am with the CBA and we have been following your discussion. We certainly understand the concerns that you have with FATCA. However, you seem to be under the impression that Canadian banks are planning to willingly go along with the FATCA requirements and this is certainly not the case. In fact, the Canadian banking industry agrees with your concerns and we have been and will continue to fight to change the extraterritorial reach of FATCA and lessen the impact it will have on Canadian banks and their customers.
We have information on our stance on FATCA on our website:
http://cba.ca/en/research-and-advocacy/47-regulatory-enviornment/598-foreign-account-tax-compliance-act–
For more than two years, the CBA and the Canadian banks have raised our concerns with the IRS and the US Treasury Department and have also done so through our membership in the International Banking Federation. We have also had discussions in Washington with IRS and US Treasury officials and Canadian Embassy officials. In May, the CBA made a presentation in Washington at public hearings before Treasury and the IRS and our president spoke out against FATCA in speeches in Calgary and Vancouver this spring. Here are the links:
http://cba.ca/contents/files/presentations/pre_20120515_irsfatca_en.pdf
Last week we also submitted an opinion piece with our concerns about FATCA to the Washington Post and we are waiting to hear back about whether it will be printed.
In Ottawa, we have raised concerns with officials from the Department of Finance, the Minister of Finance and the US Embassy. Finance Minister Jim Flaherty has supported our position and expressed his own concerns publicly and we appreciate the support from the Minister and his officials. And we are not alone in fighting this legislation. Governments and banking groups from around the world share your concerns and ours. You can find more documents here:
If banks were required to identify US persons under FATCA, they would not be doing this willingly. However, they may have no choice as FATCA is currently written because the non-compliance would have a much larger impact on more of the financial institutions’ customers. The penalty for being unable to comply with these complex rules is very severe for both banks and their clients. The penalty includes a 30 per cent withholding tax on all U.S. source income flowing to the bank and its customers, and a 30 per cent withholding tax on the gross proceeds of the sale of U.S. securities by the bank and its customers, and withholding on some portion of so-called “foreign pass-thru” payments. According to Statistics Canada, as of 2010 Canadian direct investment in the United States totalled nearly $250 billion. As outlined on our website, banks would only provide information to US authorities with a customer’s consent (http://cba.ca/en/consumer-information/40-banking-basics/597-us-foreign-account-tax-compliance-act-fatca-information-for-clients).
There is nothing in the Canadian Bank Act or the Access to Basic Banking Services (ABBS) Regulations that prohibits a bank from closing an account. The ABBS regulations give reasons why a bank can refuse to open an account for someone, but they don’t give any restrictions on closing an account. You can find information here: http://laws-lois.justice.gc.ca/eng/regulations/SOR-2003-184/page-1.html
I hope this is helpful in explaining why Canadian banks would comply, however reluctantly, with FATCA if it became necessary and why Canada’s banking industry, with the support of the federal government, will continue to fight for changes to the FATCA legislation. As your concern seems to be the requirements under FATCA, you may wish to add your voice to the growing opposition to this legislation by raising these issues with the US Treasury, the IRS and the U.S. embassy in Ottawa.
Maura Drew-Lytle
Director, Media Relations and Communications
Canadian Bankers Association
The following comments were received:
Joe SmithDear CBA
Are your member banks prepared to give up close to 1,000,000 bank customers and terminate their businesses?
@ Joe Smith
We are working hard to get changes to FATCA to lessen the impact on bank customers in Canada. While we are still hopeful that some changes may be made, the banks and other financial institutions also have to start preparing for its implementation even though they are reluctant to do so.
@Joe Smith, thanks for posting this. I just saw that I received the same email.
Joe SmithDoes anybody have updates on Credit Unions planned approaches? This could be a tremendous windfall for the cooperative movement if they pick up 1,000,000+ accounts, mortgages, loans, RRSPS and RESPS as well as tax-free accounts..
Tim@Joe Smith
While she is technically correct on the application of ABBS(re closing vs opening) effectively over a large portion of the population ABBS blocks closure. If someone was closed out legitimately one institutions they could simply go to another and demand to opened under ABBS effectively negating the point of the FATCA regs. The Washington Post part of the story is news to me and a good sign. The foreign pass through payment issue is in total violation of Canadian law under several court rulings.
Blaze@Maura: It seems you are cofirming our worst fears that there is nothing to prevent a bank from closing an account. This to me says Canadian banks may very well (even if reluctanlty) demand to know place of birth, request permission to provide information to IRS if that place of birth is in US and be prepared to close an account if that permission is not given.
Despite your protestations, this says a foreign law will take precedence over the rights of Canadian citizens and residents when push comes to shove.
Your comments are also in conflict with the following comments in a letter from a Vice-President of TD to DOT and IRS.
“If an FFI closed an account because such information was not provided, the purpose of ABBS rules would be frustrated and, in addition, the FFI would be subject to fines. Each violation of the ABBS requirements would subject the financial institution to a penalty of up to 200,000. Even if an FFI could close the account of an uncooperative account holder, an FFI could not refuse to reopen an account for such an individual if adequate identification under ABBS were again provided.”
Would you please clarify for us the following:
1. Is the information you provided correct or is the information in the letter from TD correct?
2, Under what legal authority would a bank be able to ask it’s customers where they were born or if they hold citizenship of a foreign country?
As I I told you in my e-mail, I have been in contact with a prominent Canadian lawyer. My bank can expect legal action of they ask me my place of birth or make a request to transmit private financial information to a foreign government.
You may be assured we are making our views known to government officials on both sides of the border.
In the meantime, your response is making my employee credit union look better and better.
Tim*
@Joe Smith
The latest from the Credit Union movement is a letter from Central One to US Treasury.
http://bsmlegal.com/PDFs/Central1.pdf
Basically they call to exempted completely. They also indicate that a significant number of individual CU’s will refuse to comply and thus Central One will have major problems. Central One also seems to indicate that if a solution is not reached soon the Canadian Payments Association and the Bank of Canada will get involved.
badger@Maura Drew-Lytle;
Thank you for your comments. I appreciate your interest in our concerns. As individuals, we have been speaking with our banks and credit unions and comparing notes. Some have also corresponded with some of your members. We have also written to Minister Flaherty, and other political representatives, as well as the Privacy Commissioner. Some have contacted US politicians, and the ACLU.
I appreciate the presentations that the banks have made – and I have read the presentations where available on the net, as have several others here. Opposition to FATCA in any form or origin is welcome. But, I’d quibble a bit about the nature/form/motivation of some of the opposition, since some of the CBA member’s investment affiliates have advocated not against FATCA itself, and the impact on clients, but in opposition to the ‘compliance burden’, and costs, thus are advocates for a government-to-government reporting approach to take the onus, costs and heat off themselves. It would help to deflect negative attention away from financial institutions and investment firms if they could point to government as the source of the implementation instead. If the Canadian government does agree to do that, there would of course be a cost – which would be paid for by all Canadian taxpayers. And since we all pay taxes to Canada, whether we also hold US taxable status as well, everyone in Canada will share in implementing the costs – with zero benefit. Whereas, banks, insurance companies, etc. will continue to have unimpeded access to US markets, with less direct cost borne by their shareholders. This is where our interests diverge quite a bit – I don’t want FATCA at all, and have no interest in settling for a less expensive version.
For example I don’t have the full article below, but I think this illustrates my point;
“FATCA Partners” agreement would limit compliance burdens, Canadian trade group says Feb 14 2012
by Emmanuel Olaoye
“Ian Russell, president of the Investment Industry Association of Canada (IIAC), said the changes would be a “very positive step” for Canadian firms if Canada signed on as a FATCA partner.
“It would resolve the problems of conflicts in privacy laws. We are obliged to provide information to foreign….” http://www.complinet.com/global/news/news/article.html?ref=152318 The IIAC has a member list here: http://www.iiac.ca/welcome-to-iiac/about-us/iiac-members , and you will see that there are members who have relationships with major Canadian banks.
I think I’d be more inclined to appreciate the efforts that banks have made, without as much criticism if they had tried to alert their customers in ways that would help marshall popular and political resistance against FATCA – rather than only post information on a website they would have no reason to look at. I note that banks aren’t alone in that. Pension plans have not followed up on the suggestions by affected account holders to notify their members of the pending crisis either. I haven’t seen any full page newspaper and media ads to that effect – unless I missed them. There has been surprisingly little coverage of FATCA domestically or in the US.
Re your comments:
“However, they may have no choice as FATCA is currently written because the non-compliance would have a much larger impact on more of the financial institutions’ customers. The penalty for being unable to comply with these complex rules is very severe for both banks and their clients.”
From the CBA site, this is the broad group of mostly Canadian citizens who will be affected:
The CBA site says the affected would include:
- A citizen of the U.S. (including an individual born in the U.S. but resident in Canada or another country, who has not renounced U.S. citizenship);
- A lawfulresident of the U.S. (including a U.S. green card holder);
- A person residing in the U.S.
- You also may be considered a U.S. person if you spend a considerable amount of time in the U.S. on a yearly basis. For example, some Canadian “snowbirds” may be considered U.S. persons for U.S. tax purposes. If you are unsure, contact your tax advisor.
- U.S. corporations, estates and trusts are also considered U.S. persons.”
Many of those above will also be dual Canadian/US citizens by birth or naturalization. Some may hold US only citizenship – but be decades-long permanent residents.
The CBA no doubt is working from its own estimated statistics of how many accounts would be affected – that would just be good business planning. I’d be interested in knowing what numbers you’re using. I think that it is at least an estimated million or more US taxable ‘persons’ in Canada (not just citizens, but duals, snowbirds, greencard holders, etc. Correct me if I’m wrong?
All the persons in the categories above would suffer directly from Canadian bank and financial institution collaboration with the FATCA regime. Those deemed by the US to be ‘taxable persons’ living in Canada, all have families, and many have single-citizenship Canadian spouses or other relatives who may hold joint accounts with them. Even if not jointly held, one member of the household – say a breadwinner – who is refused banking, has their account closed, or suffers a 30% witholding, will affect an entire Canadian family. Add to that all the Canadian business accounts that could be affected. And mortgages, and savings, pension, life insurance – and other types of accounts – since the list of what FATCA includes is longer than any small exclusions. That’s a lot of angry customers and a lot of affected accounts and assets.
Some FATCA compliance sites have advised their clients on ways of keeping this low key – so as not to alienate account holders during the process of implementation. I’ve been wondering if that is why when I look at the list of presenters at FATCA hearings in the US, we hear so little from them here at home. One pension plan opined that there was no need to get members upset – in the hopes that they’d be exempted from complying with FATCA. Problem is that people can’t make their objections known in a democracy unless they’re told what is brewing before it is too late. I would have thought that Canadian citizens and residents could be partners with their financial institutions in approaching our government with our concerns if we’d been alerted when this was first proposed.
How will joint account holders, and beneficiaries fare in this – when only one of them is a US taxable person with a FATCA obligation? How will banks treat this situation? I’m assuming that even the single-citizenship Canadians will have to prove that they are not American?
Account holders will have a choice? Won’t we be considered ‘recalcitrant’ then? What is the result of being recalcitrant? “If you do not complete IRS Form W-9 or provide your consent to disclose information to the IRS, your financial institution maybe required to withhold a tax of 30% on any U.S. source payments1 that you receive and send this money to the IRS. Also, your financial institution may refuse to open an account or may be required to close existing accounts.”
You say that banks will be forced to do this because of the impact on all their other clients. Well, who will be paying for the expensive systems to implement FATCA? Only those deemed US persons? Or will it be shared amongst all the other account holders – except that they won’t know that they’re paying for it will they?
Interesting comment you made re; no prohibition on banks closing an account.
“There is nothing in the Canadian Bank Act or the Access to Basic Banking Services (ABBS) Regulations that prohibits a bank from closing an account. The ABBS regulations give reasons why a bank can refuse to open an account for someone, but they don’t give any restrictions on closing an account“
That may be true, I don’t know. Does that make it any more palatable for the account holder – that it’s not actually prohibited? If the reason for closing an account hinges on identifying birthplace, US citizenship (for duals, placing US above Canadian citizenship held simultaneously – often through birth on Canadian soil), or merely US connections (ex. marriage to a US person – on joint accounts and investments). Could that be discrimination? We are in Canada. Shouldn’t Canadian law supercede US laws in our sovereign country?
It may be that the US will win, and FATCA will be imposed on us if our federal government gives in. Savings and assets are of paramount importance to most people – and that means we’re hardly likely to forget this episode in history. Neither will our non-US friends and family when we share with them what happened – even if it becomes legal to do.
If a million or more of us and our joint account holders and beneficiaries end up under the bus as a minor but unavoidable bump in the road, do you think that we will forgive and forget? I don’t think so. Some might be thinking that if and when credit unions – (who operate for and by their members), are also forced to cooperate, that we’ll have no alternatives, and thus we’ll have no choice. This may very well be the case. Perhaps we’ll have no good alternative other than a house full of piggy banks, but we’ll certainly remember who co-operated first, and who started to collaborate before it even became in force here in Canada.
We are fully compliant with the laws in Canada – our accounts are transparent, and are registered and reported with our SIN#s, post-tax earnings, we pay tax on any interest – the CRA already knows everything we have.
Canada is not a tax haven.
nobledreamerThe whole situation gets more depressing by the moment. I can’t imagine the IRS and/or Congress giving a hoot about the importance of Central 1′s ability to service the Canadian system, or whether the CBA wants to comply etc. They only care about what they want and since they can hold that 30% witholding threat over everybody’s heads, there seems to be nothing anyone can do. Unless all the governments were prepared to take the hit and tell them they wouldn’t comply. It is truly hard to fathom that one country can hold that much power over everyone else.
I wish my CLN would arrive. Among all the other negatives, I could not imagine being told I couldn’t have a bank account.
@Tim
perhaps I am missing something but I don’t see a section in the letter from Central One that indicates a significant number of individual CU’s will refuse to comply. Could you point this out to me? I would be thrilled, as all my $$ was moved to CU the minute I heard about FATCA.
*Joe Smith
Additionally this is non yet in force language in regards to Federal Credit Unions that in the future will be able to incorporate under the Federal Bank Act.
(c) membership in the federal credit union is wholly or primarily open, in a non-discriminatory manner, to persons who can use the services of the federal credit union and who are willing and able to accept the responsibilities of membership;
(2) Paragraph (1)(c) is subject to any restrictions in the by-laws of the federal credit union on the classes of persons to which membership may be available, as long as the restrictions are consistent with applicable laws with respect to human rights.
Withdrawal and TerminationWithdrawal of membership
47.05 (1) A member of a federal credit union may withdraw from the federal credit union at any time by giving notice in accordance with the by-laws.
(2) A deceased member is deemed to have given notice to the federal credit union of their intention to withdraw on the day of their death.
(3) The by-laws of a federal credit union must set out the rights of a withdrawing member.
Expulsion
47.06 (1) A member of a federal credit union may be expelled from membership, in accordance with the by-laws, by a resolution of the directors on the grounds set out in the by-laws.
(2) The by-laws of a federal credit union must set out the rights of members who are expelled under subsection (1), and those rights must include
(a) the right of a member to receive advance notice of any meeting of the directors at which the board will consider a resolution to expel the member;
(b) the right of a member not to be expelled without being given an opportunity to make representations on the matter at the meeting of the directors;
(c) the right of an expelled member to appeal the decision of the directors at the next meeting of the members; and
(d) the right of the expelled member to be reinstated as a member of the federal credit union if, at the next meeting of the members, the members, by ordinary resolution, set aside the directors’ resolution.
(3) The by-laws of a federal credit union must set out
(a) the procedures to be followed by the directors to provide the advance notice referred to in paragraph (2)(a); and
(b) the procedures to be followed relating to the appeal referred to in paragraph (2)(c).
(4) If the directors pass a resolution expelling a member under subsection (1), the federal credit union must, within five days after the passing of the resolution, notify the member of the directors’ decision by registered letter addressed to the member at the member’s recorded address.
Inactivity
47.07 No by-law may provide for the expulsion of a member by reason only of inactivity of the member in relation to the business or affairs of the federal credit union.
Redemption
47.08 No by-law governing the withdrawal of a member from membership or the termination of the membership of a member may authorize a redemption of membership shares in contravention of section 485.
Termination by members
47.09 Unless the by-laws provide otherwise, the membership of a member may be terminated by a special resolution of the members. Section 47.06 applies, with any modifications that the circumstances require, to a termination by the members.
Winding-up proceedings in respect of member
47.1 Despite subsection 47.06(1), a federal credit union may, by written notice to a member, terminate the membership if the member is a body corporate and winding-up proceedings have commenced with respect to it.
This “parable” posted elsewhere may dramatize this outrageous issue…
Meet Peggy & Sue: sisters and Canadian citizens. They live in Alberta,
work for same Canadian employer… and both bank and invest at a Canadian bank
down the street in their hometown. However, Peggy was born in Michigan while
their parents were graduate students. She moved to Canada as a youth, became a
Canadian Citizen at 20, and has not lived or worked in the US since. She
understood she would relinquish US citizenship by becoming a Canadian, but did
so anyway with full intent. As far as Peggy’s concerned, her ethnic origin as a
so-called “US person” is an accident of birth; Canada is her home, and she’s as
Canadian as sister Sue.
Our sisters live, work and invest in Canada. They don’t own US stocks, and
never bought an Arizona condo. Now they each have almost identical RRSP’s,
TFSAs and Canadian mutual funds. They opened these accounts 20+ years ago, and
their bank has no record of Peggy’s US birthplace or Sue’s Canadian birthplace.
Suppose their bank now asks “where were you born”? An odd question after a
twenty-year relationship – and they both say so! Bank says that if one of the
sisters is born in one certain foreign country, it will now serve her in a
significantly different and adverse manner – including account closure – then
the other sister. So both sisters refuse to provide the information, and
inform bank its actions seem like discrimination based on “nationality, origin
or place of birth”.
@Wondering and Maura: I will add to the “parable.” Peggy and Sue are both married. Peggy’s husband John was born in Canada and has lived in Canada his entire life. Sue’s same sex spouse, Anna, was born in the Netherlands. Anna is a permanent resident of Canada, but is not a Canadian citizen.
Both couples have RRSPs, TFSAs, RESPs for their children, non-registered savings and investments and mortgages at the same bank. All four individuals have their employment income directly deposited to their accounts. CRA income tax receipts are issued yearly for RRSPs and RESPs, as well as T5s for any income from non-registered funds held at the bank. All four have always paid their income tax to Canada.
John is adamant his joint accounts with Peggy are none of a foreign government’s business. Sue and Anna have nothing to worry about, even though Sue’s spouse was born outside of Canada and is not a Canadian citizen. They also are not prepared to suddenly provide information about place of birth to a bank where they have been customers for so long.
In addition, Peggy and Sue have joint power of attorney for their mother who has Alzheimer’s. Her accounts have been at the same bank for 50 years.
Is their bank really prepared to demand all four provide information on their place of birth? When they fail to do so, is the bank really going to close all the accounts? What is the legal authority in Canadian law for demanding the information and proceeding to close the account when the information is not forthcoming?
Although this situation is a “parable,” it is literally one of one million common stories of individuals in Canada, plus their families. It is important CBA advises us how they plan to handle such cases.
@Wondering and @Blaze
Great parable. Might be a parable but as you said Blaze, it all could be true. Sure hope we get an answer from Maura.
@Blaze, but they’re not going to handle it. As per Maura, they’re going to leave it up to the individual banks to deal with, and obviously, then, whatever fallout occurs from that.
*The problem I have with the CBA is I don’t doubt that they don’t like FATCA but they seem to be “frozen” about what to do about it. They can’t seem to decide whether the “reputational” risk of being for it in Canada is worse than the “reputational” risk of being against in the US.
@Tim
I am sure that CBA does not like FATCA just as many countries/financial institutions etc don’t like FATCA. Since the Americans do not seem willing to ‘back down’ from FATCA and all these agencies/institutions/countries still desire to keep the Yanks happy and continue to do business with them, I really believe that some form of FATCA is in everyone’s future. In the long term I can not help but believe it will prove to be a disaster for the world economy. And perhaps someday, someone much wiser than anyone presently in the US government,, will come to the conclusion that it has been a huge mistake and change it. But I am not going to hold my breath.
@Tim: The information we have received so far seems to indicate CBA will take the path of least resistance–i.e. they will not “willingly” be FATCA compliant. But, for financial reasons, they are prepared to capitulate and betray fundamental rights of Canadian citizens who simply had the misfortune to be born south of the border.
I am still stunned CBA continues to take the position they have the right to even ask about place of birth and threaten account closure for refusing to give that information. This is not the Canada I have known for 40 years nor the bank I have done business with for 35 years. Of course, that bank and their superb customer relations disappeared when Canada Trust was taken over by TD. Perhaps this is the next step.
I have, however, found outstanding customer relations again at my local credit union. I have recently transferred further significant funds to the CU. I won’t hesitate to transfer more, leaving only a small chequing account at my TD branch five blocks from my home for convenience if TD does not soon reassure me my finances are safe from intrusion of a foreign government. So far, neither TD nor CBA has done that–and 2013 is just over five months away.
As Maura has told us, banks must prepare for the implementation of FATCA. We, too, must do the same–prepare by continuing to contact attorneys, elected officials and various organizations to make sure our banks don’t literally sell us out.
@blaze
You are so right. There should be no compromise.
*Blaze
FYI, The current CEO of TD Bank was the final CEO of Canada Trust as an independent bank.
As a general matter it is my belief that credit unions will continue to be a increasing “competitor” to the chartered banks especially as the ones out west(Vancity, Servus etc) convert into Federal charters(I am also pleased to say Flaherty’s Federal Credit Union legislation gives FCU members all of the same rights as under provincial legislation) and are able to expand in Ontario and Quebec. The downside of Credit Unions is they don’t tend to offer “investment accounts” like the chartered banks and lifecos do.
Do I think the Canada of 40 years would have done more to protect its citizens probably, but I also think that Jean Chretien and Paul Martin should have done more in their time. Canada in the 1990s to be fair was broke and one percieved way to get the books in balance was to “cooperate” more with the IRS notwithstanding the impact on Canadian soveriegnty. It was during Chretien’s time that the “QI” program for example was started. A part of me feels Flaherty should do more but another part of me sympatheses with the fact he has to undo seventy years of Canadian government policy of accepting the US having taxing rights over its citizens resident in Canada.
@Maura and the CBA;
Further to the parable courtesy of @Wondering and @Blaze;
Keep in mind that our federal and provincial governments regularly urge all of us to plan responsibly for death and disability by maximizing our individual savings – through using the very same registered accounts that the IRS refuses to recognize, and which make them toxic to hold if you are a deemed ‘US person’. The reporting is so complex that tax preparers charge handsomely to prepare them. The confiscatory penalties for any inadvertent error or omission – due to the complexity and confusion about the highly technical IRS rules, are the usual units of $10,000. or a significant percentage of the value of the instrument in question. Our banks and financial institutions consider them ‘savings’ accounts or term deposits and market them to us, the Canadian government highly promotes their use by us, and neither party warns us that they’re only a good deal if you aren’t owned by the IRS.
Who is likely to have the most savings of this kind? Seniors who’ve been saving over their lifetime, and children – about to use the RESPs bought on their behalf. Lost to the IRS – with no benefit to our families or to Canada.
*What is the government telling our banks if anything? What they should be telling the banks is Canadian laws must be followed in Canada. Then remind the banks that the US is a foreign country, and sometimes doing business in a foreign country can be risky.
*Everyone should watch the video interview I linked to below of CBA President Terry Campbell. While unrelated to FATCA I totally agree with his position on the Volcker Rule and its extraterritoriality. What I find interesting is at 6:55 when BNN interviewer Howard Green suggests the maybe we need to “disconnect” the US and Canadian financial systems CBA President Campbell does a big song and dance about NAFTA. Well I know several people that back in the day(1988) were heavily in involved in politics and strongly in support of the Canada US Free Trade Agreement(when many opposed it). While they continue to believe it was the right decision at the time they now think it really isn’t worth the paper its written on and the US will interpret it as they please. I hope the CBA has the courage to go to a NAFTA arbitration panel about Volcker and extraterritoriality but I am not holding my breadth(Even if the CBA wins the US could just ignore it like softwood lumber). Overall the CBA needs to decide whether its going to be the Canadian Bankers Association or AMERICAN Bankers Association
http://video.ca.msn.com/watch/video/volcker-rules-impact-on-canadian-banks-02-15-12-1-00-pm/jv7i9dli
*The other things I’ll mention is this idea that the US is the ONLY foreign country Canadian Banks have an oppotunity to do business in is completely bogus. For example right now the current govt of Canada and the current govt of Israel are VERY close to each other. In fact several top Israeli politicians have said they consider Stephen Harper a closer friend of Israel than Barack Obama however, there are no Canadian banks doing business in Israel and no Israeli banks doing business in Canada. I have also seen on several Israeli political blogs commentors saying that Israeli High Tech companies should shift there North American operations away from Silicon Valley to Kanata outside of Ottawa in protest of what they see as Barack Obama’s anti Israel stance(Additionally favoring Cdn FM John Baird who represents Kanata and Ottawa West).
@ Tim
“For example right now the current govt of Canada and the current govt of Israel are VERY close to each other.”
WAY too close for my liking. If Harper gets any closer to Israel we’ll find ourselves sending multi-billion dollar “aid” packages to Israel just like the USA.
*The downside of Credit Unions is they don’t tend to offer “investment accounts” like the chartered banks and lifecos do.
NOT TRUE,
*Joe Smith
Yes and No. In the context of FATCA I don’t know of any credit union that “directly” offers investment accounts. They generally have a third party “affiliate” offer them to their members. For many this is a company called Q-Trade which in turn is really controlled by a company called Penson Financial which is an American company. I suspect Q-Trade and Penson will be complying with FATCA notwithstanding the stance of credit unions. I also suspect that Q-Trade and Penson have no obligation in their agreements with various credit unions to accept ALL respective credit union members notwithstanding FATCA.
*Joe Smith
In fact Q-Trade is already asking its customers to sign a waiver of client confidentiality to the IRS.
https://www.qtrade.ca/_pdfs/forms/qi/Waiver_of_Client_Confidentiality.pdf
Perhaps you could get your credit union’s management to have a conversation with Q-Trade management. I will also note on the main Q-Trade application form the section about waiver of US citizen privacy rights is real easy to miss.
Thank you for this. I deal with Q-Trade so this is VERY timely. I have not been provided with this and if I did I would refuse to sign.
Forwarded to my adviser at Alterna and to my MP and hoang.mai@parl.gc.ca who is handling this for the NDP
@Joe, Tim: It all comes back to how will they know a place of birth outside of Canada. As I understand it, a foreign birth certificate is not acceptable ID for establishing an account.
So, again, what is the Canadian legal authority of Canadian banks or credit unions to demand to know place of birth of Canadian citizens or residents? If they can’t do it for someone opening an account, how can they do it to long-standing customers–and then threaten to close their accounts if they refuse to provide it?
Will Canadian banks next demand affluent Canadian snowbird clients complete the IRS convoluted form to determine if they are, in fact, “US persons?”
Finally, what legal standing does the term “US person” have in Canada–especially relating to a Canadian citizen?
I realize Canadian banks are living their own nightmare relating to FATCA. But, I’m not going to crawl into bed with them to ease their nightmare to create an even greater one for myself.
Thank you for posting your comments, we are listening.
I should clarify the CBA’s role in the banking industry. We are an industry association representing 54 banks operating in Canada. However, we are not a regulator and have no oversight powers over banks and we do not set industry-wide policies or procedures for banks to follow. This is not our role. What we do is, when there is an issue that impacts the banking industry, we work with the banks to make the industry’s views known to governments, policy-makers, the media and the public to ensure that we have effective regulations of banks for the good of the banks, their customers and the economy as a whole. With FATCA, we are pushing to get changes to limit the impact of the legislation on banks and their customers.
The CBA cannot answer specific questions about what individual banks would do in individual customer situations with regards to FATCA or any other issue. And because the regulations are still being developed, no one has any clear answers at this point.
We have worked with other financial industry associations to provide as much information as we can about what financial institutions may need to do if FATCA is implemented as currently written. You can find that document here and we will update it as more information becomes available:
http://cba.ca/en/consumer-information/40-banking-basics/597-us-foreign-account-tax-compliance-act-fatca-information-for-clients
I draw your attention to the following line from that customer information: “If you have an existing account and there is an indication that you may be a U.S. person, or if you are opening a new account, your financial institution may ask you to provide additional information or documentation.”
The banking industry shares your concerns about FATCA and we will continue to work to lessen the potential impact of this U.S. legislation on Canadian bank customers. We encourage you to continue to make your concerns known to politicians and policy-makers on both sides of the border, particularly in the US as they are the ones that will make the final decisions on the FATCA requirements.
Hmm. Very interesting there is still still no answer about the legal authority of a bank to ask for place of birth or legal authority for a bank to close an account for refusing to provide that information.
Could it be because there is no such legal authority in Canada?
@Maura Drew-Lytle
‘With FATCA, we are pushing to get changes to limit the impact of the legislation on banks and their customers.’
At what point in the critical path of FATCA’s implementation will any attempts to change legislation become futile? At some point you will need to make more responsible efforts to reach banking customers than to post information on your web site. Is it not the CBA’s responsibly to give banking customers sufficient warning to prepare what’s expected of them? US citizens in Canada need time to have mortgages and investments transferred to more ‘US person friendly’ financial institutions. The CBA should be running releases in all major Canadian newspapers NOW, as to not blind-side your customers and leave you open to lawsuits for leaving your customers in the lurch!
@Maura Drew-Lytle,
Will the CBA be addressing FATCA in a submission to the Canadian government’s Finance Committee prior to the 2013 budget submission deadline of August 3rd?
http://isaacbrocksociety.ca/2012/07/20/more-correspondence-from-the-office-of-john-weston-mp-irs-is-a-budget-issue-for-the-government-of-canada-get-your-voice-heard-before-the-deadline-for-2013s-budget-submissions/