The exact text is:
NEGOTIATION OF AN INFORMATION EXCHANGE AGREEMENT WITH THE UNITED STATES
November 8, 2012
Negotiations are being held between Canada and the United States on an agreement to improve cross-border tax compliance through enhanced information exchange under the Canada-United States Tax Convention, including information exchange in support of the provisions enacted by the United States commonly known as the Foreign Account Tax Compliance Act (FATCA).
The purpose of this bulletin is to inform persons whose interests are affected by the provisions of FATCA that the Government is actively seeking a solution to issues raised by such provisions. The Government of Canada has received input from many individuals and groups in relation to the implications of FATCA.
Persons wishing to offer additional comments concerning the negotiations may send their views to:
Department of Finance
17th Floor, East Tower
140 O’Connor Street
Ottawa, Canada
K1A 0G5For further information contact:
Kevin Shoom
Business Income Tax Division
613-992-2980
I strongly suggest that the Isaac Brock Society make a formal submission. I am happy to volunteer my contribution to this – and I hope others will too. I note the following comment on this topic by Jim Jatras.
Canada seeks public input into #FATCA negotiations with Form Nation fin.gc.ca/treaties-conve…
— U.S. Citizen Abroad (@USCitizenAbroad) November 8, 2012
Time out for a message from @MopsickTaxLaw
“Commissioner Shulman Retires After Five Years of Service as Commissioner
Mention retiring
Commissioner of Internal Revenue Doug Shulman and some Americans abroad
see red and misdirect their anger at him over FATCA and the IRS’s new
focus on FBAR-only audits and enforcement. Last week he gave his
goodbye speech and listed what he considers to be his accomplishments
over his five year tenure. Six of seven items listed by him are soft and
gooey government “management-speak”- type things like sensitivity to
the work force and the techno-challenges the IRS faces, but front and
center was surely the single thing Mr. Shulman wants to be remembered
for: the IRS muscle flexing in the international enforcement arena.”
@just me
Americans are really confused as to whether Canada is conservative or liberal aren’t they, when they make comments like “where big government, same sex marriage and universal health are a part of everyday life”, yet encourage disappointed Romney supports to move here. I suppose I like being an enigma to them though. Let them wonder how we manage to have universal health care, a sound banking system and good public education, when their taxes begin to soar above ours.
Perhaps a juxtaposition of US and Eritrean policies on citizenship based taxation and Canada’s (and the UN’s) position towards Eritrea should really be capitalized upon.
The hypocrisy of Canada denouncing Eritrea while searching for ways to accommodate the US is really embarrassing.
@ Jim,
This would seem to contravene s. 15 of the Charter of Rights and Freedoms, discrimination based on national origin. If so, and the Conservatives were to override this by invoking s. 33, the Charter’s “notwithstanding clause” – for the first time in history – in order to acquiesce to the wishes of theUS
@pacifica777
Exactly! The question is, who in the Canadian parliament (I assume we’re talking about the Opposition) and media would be interested in taking up this issue, if for no other reason political advantage?
@Pacifica777
No, an agreement would not discriminate based on national origin. It would discriminate based on citizenship. Although citizenship is not listed in Charter S. 15 the first case the Supreme Court of Canada decided under S. 15 agreed that citizenship classifications were included in S. 15. (@Tim one of the lawyers who was involved in this case is the lawyer you recommended last year.)
So, an agreement that would allow the government to turn over the banking information of US citizens only would be problematic. That said, there is S. 1 of the Charter that could save it. I.e. the government can override a Charter right if it is in the interests of a free and democratic society.
I suggest that a court application should be organized now, waiting in the wings to go forward.
On the private sector side the banks are caught by the provincial human rights codes. Ontario’s specifically prohibits discrimination based on citizenship.
To put it another way:
For the government of Canada to enter into an agreement with the US to turn over the banking information of US citizens could either:
1. Require the Government to invoke the notwithstanding clause (very difficult because this would involve throwing dual citizens under the bus); or
2. A constitutional amendment.
For the banks to require this information for the IRS puts them in conflict with provincial human rights codes.
This is going to get very very interesting! I don’t think FATCA or an agreement is going to happen in Canada. The government and the banks are barred from it.
@Fromthewilderness
I think we need to be careful with the US and Eritrea comparison. There are differences. The UN opposition to the Eritrea taxation of citizens abroad is based (correct me if I am wrong) on a levy that is specfically earmarked for various bad activities. In other words, it is NOT an objection to citizenship-based taxation per se.
The proper comparison would the thuggish attitude and practices toward its citizens.
*renounceuscitizenship
In terms of Eritrea. Yes and no. One of the issues is the financing of various bad activities by the Eritrean government but Canada in particular has said that is not the only reason for criticism.
Pacifca77
FATCA is actually both discrimination on citizenship and on national origin. There is a two step process to complying with FATCA. First all persons are asked their place of birth. Those born in the US if they want to claim to not be a US citizen must then provide a CLN. Those who are US Citizens and don’t have a CLN must provide a form W-9 and have their banking information reported to the IRS. Those who aren’t born in the US and are not US citizens are exempt from all of the requirements.
@All
Another possible legal challenge would be to argue that FATCA violates aspects of NAFTA (North American Free Trade Agreement). I don’t know a lot about this argument. @Tim had mentioned that he had tried to contact Professor Cockfield at Queen’s without success. The reason I mention him is because I believe that his (Professor Cockfield’s) position is that the NAFTA route might be worth exploring. In an earlier post, I saw that Queen’s was making him available for speaking on this topic. This is an avenue that could and should be explored. He has the status to possibly really be heard on this issue.
http://arthurcockfield.com/
http://isaacbrocksociety.ca/2012/09/07/queens-law-professor-discusses-matters-of-interest/
@ recalcitrant — I agree and the final line of my “input” is … The USA is the odd man out with its unjust citizenship based taxation and it is time for Canada and the rest of the world to make it clear that the correct path the USA needs to follow leads to resident based taxation.
@Renounce
This was the link I think you meant to post…
http://mopsicktaxlaw.blogspot.com/2012/11/commissioner-shulman-retires-after-five.html
Even Steve sees GATCA in the works, under the name of ‘automatic information exchange’…
If FATCA is a clear violation, why is the Federal government embarking on this fishing expedition? It’s like being under age in a liquor store knowing you’ll be carded when you get to the cash register. What’s the point? Are they hoping they’ll muster enough enthusiasm for FATCA that would support changing our laws? Not likely!
Just found this:
FATCA Intergovernmental Agreement With Canada is in the Works‘The announcement does not include any details, such as whether any relief is being discussed for the hundreds of thousands of U.S. citizens resident in Canada who have not been complying with their U.S. tax obligations. The talks appear to be in their early stages, as is evident from the fact that Canada is not mentioned at all in a separate announcement released by the U.S. Treasury Department on the same date.’
http://www.dwpv.com/en/Resources/Publications/2012/FATCA-Intergovernmental-Agreement-With-Canada-is-in-the-Works
@all- when it comes to the FATCA generated questions the fundamental issue is that they are all focused on disclosing one’s nation of origin or citizenship. There are people who come from some nations citizenship and national origin are one in the same thing. When I say this I am thinking about people who come from countries like Japan, South Korea, Norway or Sweden, where the national populations are homogenous.
The other thing is that the FATCA related questions are about an issue that Canada has no interest in whatsoever. This is unlike the aml/kyc questions which are there in order to combat international criminal activities such as drug trafficing, which is something that Canada does have an interest in combatting.
Lastly since when is it that America gets to pass judgement on the whereabouts of its citizens? What is the difference between the the South African pass system of Apartheid and having to be in possession of a W-9 pass document from the IRS which says you have permission to do business with a none U.S. bank that does not have to report to the IRS?
Canadian financial institutions do business under a Canadian corporate charter and do not have any legal obligations to report anything about their Canadian resident customers to the IRS.
Below is the link to my submission to the Australian Treasury consultation process. I’m publishing this for the first time today due to the Australian Treasury not having published all the consultation submissions (as I think they should have by now).
I’m publishing it in case there is some useful content/arguments that can be recycled into the Canadian submissions you guys are considering. I remember the difficulty in trying to figure out the core arguments to put forward, and the even greater difficulty in articulating the arguments with all the the inherent nuance and complexity of the issues. I wish you all well in taking the fight to the Canadian govt.
http://bit.ly/XqZLOM
*Simple fact. If you are a dual citizen; you are protected by the Charter. If you’re not a Canadian citizen you aren’t. Period.
My “input” wasn’t as comprehensive as what most Brockers are able to put together but it will get into the mail by Monday. Sure hope the IGA isn’t a done deal and the request for additional comments just a cynical pat-pat, there-there, you see we really do value your opinion–NOT. I waffle between logic and justice will prevail and oh no, they’re going to throw us under the bus.
@Moby,
I am off to read your submission. I just want to thank you for your great generosity in sharing this with fellow US Persons Abroad. It will be useful to those of us who are Canadians right now. It will be useful to US Persons Abroad wherever they are in the world when they wish to submit the similar case to their governments.
I almost feel like a plagiarist in using others’ thoughts but know we are all working toward the same goal for the large community of us. You have my respect for all you have gone through, Moby, and my thanks for assisting us.
@Calgary411
Amen to that. Thanks Moby. I hope all the Canadians download his submissions and plagiarize away, if appropriate. Need to garner every argument you can.
No worries. “Steal with pride” is what I say 😉
Moby, your submission is brilliant on so many counts. I was especially interested in your entirely different slant to the absurdity of FATCA for all (and the costs for even those in no way US Persons in a particular country). I read with interest your proposal that in order for a country to not breach their own privacy laws and single out / discriminate against one segment of citizen/nationality population, those who believe it is in their interest to deal with the US financial system could enter into and absorb costs for individual agreements with financial institutions that choose to be FATCA compliant. For those to whom this arrangement with the extra-territorial USA makes no sense and they wish not to give their business to a FATCA compliant financial institution, there would be an alternative FATCA non-compliant financial institution — a TWO-TIER SYSTEM and a USER-PAY system — like a toll to pay for a bridge by those who want to cross it.
If your submission does not knock some sense into thick heads, I don’t know what will. I’m off to continue reading, but I just wanted to say thanks for that particular new slant / point of view.
Thank you Moby, I am giving myself the weekend as snail mail doesn’t move anyway so I’ll give yours a peruse…remember plagiarism is the sincerest form of flattery!
Keep you ears open next week. I got connected in again during this week to Talk of the Nation, and the screener told me that the issues I brought up were being scheduled for discussion this coming week. If you catch it, you can indeed get connected if you call in early. The blip I got in was during a period when they had not been asking for callers.
@Mark Twain,
Excellent outcome from your debut on Talk of the Nation! Neal Conan kept his word. Keep us posted in case we miss catching the segment on which this will be discussed. I hope Talk of the Nation will do a thorough and fair story on FATCA and US Persons Abroad. Thanks, Mark!
I really think Moby’s submission to the Australian Treasury should be an attached Exhibit to a submission prepared on behalf of all at Isaac Brock. It is too well done to waste. A different approach to what FATCA means for the whole world of 7 billion as not only would US Persons Abroad be affected by the enormity that FATACA IGA reciprocity agreements would impose.
And, what about a country like China who is not likely to bow to the citizenship-taxation extra-territorial wishes of the US? Whose bad dream was this?