Q Canada opposes the planned U.S. Foreign Account Tax Compliance Act (FATCA) aimed at American tax evaders in this country. Explain your concerns?
A FATCA is the poster child for the problem of extra-territoriality. One can understand the rationale. They want to cut down on tax evasion. Fine. We understand that and are sympathetic to that. It’s the way they have chosen to go about doing it which is a real problem. It’s hugely unworkable. It extends U.S. territoriality into Canada. It threatens to erode Canadian sovereignty. Ultimately … FATCA would have turned individual banks, individual financial institutions, into arms of the IRS [Internal Revenue Service] in the United States. If FATCA came through in its current form, before a Canadian citizen could open up a bank account at a Canadian bank, you would have to prove you were not an American citizen.