298 thoughts on “Top Priority: Canada seeks input into FATCA negotiations with US”

1. *You know what’s really disgusting, is that I’m a Canadian citizen, born, bred and raised in Edmonton, Alberta, now residing in British Columbia (a true blue Canadian) and I’M FREAKING OUT OVER THIS FATCA/FBAR CRAP MORE than my American wife.  There are some Canadians (like me) who understand.  And yes, I know all too well…that despite my wife not owing one red cent to the United States, we have to live in fear of those FBAR forms and the potentially financially-crushing penalties for failure to file (in a timely manner).  I think of what it could potentially do to MY photography business and on top of that, what it could do to her potential for getting a better job.  The US government will be out there hat in hand if she doesn’t renounce her US citizenship or continues to run the annual gauntlet of IRS tax returns.  Her ailing mother is in the States and my wife hasn’t seen her or visited her (we haven’t had the money to do so or we would have) ever since she moved up here.  I know they won’t be able to touch my photography business, but I do rely on her help in getting the necessary equipment (namely a $10,000 lens) for wildlife photography.  So, yes, this FATCA/FBAR shit has the potential to destroy lives and will do so.  The entitlement attitude of the US Homelanders is absolutely reprehensible.   

2. @badger

   With all that money comes a lot of clout to make sure the IGA’s don’t deliver on reciprocity.

3. @bubblebustin, @Animal,

   …and will this Canadian Tax Evasion clean-up effort http://www.calgaryherald.com/news/politics/urged+take+nonsense+approach+evasion/7534784/story.html further creep into people’s minds, all filed under TAX EVASION, wherever — are those US expats really tax evaders?, etc.

4. @ Animal
   We’re in almost the same situation as you and your wife but with a twist. I had a toxic kryptonite (green) card which I was told was null and void and I believed that for over 15 years and then this year I discovered there is a form for returning it — I-407. I rant frequently at my unbelievably patient American husband (Canadian citizenship pending) but that of course isn’t fair to him. Anyway you expressed what I feel so often and I imagine you have sleepless nights too. It’s the uncertainty; it’s the anxiety; it’s the injustice; it’s the irrational, illogical, punitive and complex to the point of absurdity, US tax system! My husband only kept his US citizenship to make sure he could visit his elderly mother in the USA easily but she passed away in the Spring. Now however there is the extra complication of my husband’s very modest inheritance from her which sits in a US bank and we’re not even sure how to transfer it to Canada or whether we even should. He gave away nearly half of it to American relatives, with my blessing. The complexity just drives us nuts.

5. calgary411 etc –

   being hated on both sides of the border

   That’s a point that I’ve been honing away on least as far back as the post on anti-Americanism in Canada. Extraterritorial US persons are surrounded by granfalloons. Those warm fuzzy things alongside the eyes of the unwitting preterites who adore the Canadian state are … blinders.

6. *We can’t afford to run the gauntlet of the US tax system wondering if we’re going to get a family finances-destroying fine or not.  We only make about $36,000 an year joint. 

   The only thing that will work is the complete repeal of citizenship-based taxation.  And the only way we’re going to do that is by and complete world-wide tea-party against the over-reaching and extra-territorial legislation known as FATCA and its reporting requirement of FBAR!

   1. My wife did not vote Democrat (she avoided voting altogether in 2008).  I said that Obama would be the destruction of the United States wayyyyy back in 2008.  TRUE 

   2.  I said that the US would end up going after US citizens with the US debt situation and that Obama was going to be protectionist and destructive towards Canada and the rest of the world.  TRUE. 

   3. When OVPD came out, I said that the IRS was going to take a hardline and start using this as a form of income.  – TRUE

   4. I said that Ambassador Jacobson was not to be trusted – See how that turned out TRUE. 

   4 for 4.  Still think I’m running around saying “The Sky is Falling?”  bubblebustin? 

7. *Citizenship based taxation is the real culprit here.  They can tax their residents anyway they like.  They can create all the protectionist legislation they want.  WE should not be be affected.  We will be held to every arbitrary, irrelevant tax that they come up with.  Their view of Canadian mutual funds is a perfect example.  How does a Canadian exist in Canada, prepare for their retirement, prepare for their children’s education expenses without the use of solid Canadian investment products???

8. @Marie

   The best investment a Canadian with US citizenship can make is the $450 renunciation fee. Unfortunately getting there is fraught with massive expenses in order to become tax compliant. Many prefer to fly under the radar, and still contribute to these retirement savings plans. Only time will tell if this is a good tactic. For me, I prefer to take my lumps and exit.

9. @calgary

   Thanks to FATCA, my BS detectors go off when I read this kind of thing:

   “But Downe argues resources shouldn’t be an obstacle because history shows the government will more than reap the extra costs with more tax revenues. In 2005, the agency got an injection of $30 million to fight “aggressive international tax planning” which generated $2.5 billion in four years.”
   
   Read more: http://www.ottawacitizen.com/news/urged+take+nonsense+approach+evasion/7532761/story.html#ixzz2C7dBE1SV

10. @Animal, far be it from me to wish to calm fears, as I am one who really wants people to take this issue seriously.  However, that said, I think that it is important to maintain one’s happiness by not allowing US tax issues to overwhelm us.  If you are really not wealthy and don’t have much income, I think you can afford to be at your ease for two reasons:  (1) The US won’t go after your money because it is not low hanging fruit and it’s not worth the trouble; (2) the US can’t go after your money because it must go through the Canadian government to get it.  Why do you think that I talking to reporters using my real name?  Because I’m not afraid.  Take courage.  You are here, and the jurisdiction of the United States, as you point out in another post, stops at the border.  Now the only thing to be really afraid of is an invasion, but in that case, you, me and 30 million other Canadians will all be paying attention, and we expats won’t be alone anymore.

11. *Kudos, Bubblebustin.  The $450 renunciation fee probably is the best investment.

12. *

13. I called Mr Shoom and left a message to expect a submission from me, in spite of the Globe and Mail’s quote from Minister Flaherty that an IGA deal with the US government is soon. 

14. Kudos to JustMe for posting the link to that excellent submission to the Australian government concerning their negotiations with the US for an IGA, also linked on the ACA website.  For anyone who missed it, here’s the link:

    http://americansabroad.org/files/8513/5266/9983/Aus_Treasury_FATCA_submission.pdf

    I’ve printed this PDF and am forwarding it to Mr. Shoom at the address provided on the November 8 Finance webpage calling for “additional comments” on the Canada-US negotiations.  In my letter, I re-iterated my point that Canada should never give the US financial information on any Canadian citizen resident in Canada, since to do so would in my view be a violation both of our Charter of Rights and Freedoms and also of the Privacy Act.  I then mention the attached letter to the Australian government, saying that this letter raises a number of points that I think are equally valid in Canada and expresses those points more eloquently and coherently than I can.  I urge the department’s careful consideration of these points, if they haven’t already seen and considered them.

    It wouldn’t hurt for other readers of this thread to do as I did.  The more “additional comments” they get, the better, and this is a relatively painless way to hit them with some very interesting points.  Do however add some of your own in the cover letter.

15. Some considerations/suggestions when following Tim’s advice re calling the Department of Finance to ask/express/demonstrate interest re the submission process re FATCA:

    – Ask how long the submission process/public consultation (if this even really is one) will last ? I would bet that you’ll get a less than definite answer as per a date. You could ask why the Department of Finance notice gives no timeline or deadline, whereas the Globe article has the unattributed quote saying ‘nearing a conclusion’?

    – Ask what steps have the Federal government and the Department of Finance taken to give Canadians meangingful or substantive notice that FATCA exists as an issue – AND to publicize this current opportunity to comment – the answer is NONE re this submission process – other than the notice that just appeared on the Department’s website – which not many ordinary Canadians make a habit of  checking every day. Also, notice by e-mail subscription is not sufficient notice – again, how many ordinary Canadians would even know that FATCA exists, and that the ” “two sides are nearing a conclusion” to the issue” ? The quote re the ‘nearing a conclusion’ is courtesy of the Globe and Mail, Report on Business, Fri. Nov 9.

    This is a very telling point, and possibly good ammunition when cc’ing or contacting opposition members like the NDP and Liberals – is this another example of circumventing the democratic process in Canada – by slipping an agreement of this lasting magnitude under the public radar? Any agreement with the huge significance of FATCA, which cedes Canadian sovereignty – even through an IGA – ‘intergovernmental agreement’ – is another step on a slippery slope into being another US state. Since when do real sovereign countries – as Canada should be, cede to ‘foreign countries’ reporting or any other authority – even indirectly (via IGA arrangement) – over all or most of the financial accounts and assets of all, or even 1 million or more of their citizens ? 

    Canada already compromises the security of our Canadian savings via the gaps in the Canada US tax treaty – which allows the US to refuse to recognize, and to actively punish with IRS fines – our legal Canadian government created savings vehicles – RDSPs, RESPs, TFSAs, and now PRPPs, (and burdens RRSPs with annual elections) as ‘foreign trusts’. This is already an outrage, and entirely unacceptable – that Canada has not firmly demanded that our legitimate Canadian savings be exempt from US reporting, taxation and penalties. Given how serious that deficiency is already in the existing reciprocal tax treaty with the US, how could the Department of Finance and the federal government possibly claim with any truth, that entering into an IGA, and enabling FATCA would not result in exponentially further harm to Canadians and the Canadian economy?

    And, don’t forget the US ‘savings clause’, the US position that it’s treaties are all open to contradiction or override by Congress, and it’s lack of any truthful or true commitment to any useful reciprocity or information exchange.

    Those in Quebec might also see it as an affront to their sovereignty as a founding nation – having the Harper government enter into FATCA, and binding Quebec as well, without consultations.

    And, what about the First Nations organizations? In the US, they are already in conflict with the IRS because of arguments over sovereignty and the claims of the IRS based on US concepts of US citizenship vs. First Nations sovereignty vis a vis the US government (ex. see this http://lawprofessors.typepad.com/nativeamerican/2012/08/follow-up-on-taxing-indian-country.html http://indiancountrytodaymedianetwork.com/ict_sbc/stop-irss-indian-treaty-violations, vs this http://canada.usembassy.gov/visas/information-for-canadians/first-nations-and-native-americans.html  .

    Some other things to consider:

    – what type of public consultation / public education process is required when an agreement of this type is entered into? Is there a mandatory notice period?

    If not, does that constitute an abuse of federal powers if they enter into an agreement that affects the very broad categories of assets and bank accounts, and insurance and pension plans, etc. of ALL CANADIANS – via the extraterritorial laws and desires of the US, which even if it is restricted to ‘reporting’ ‘only’, is directly supporting and enabling US domestic enforcement and thus infringement on Canadian sovereignty? Should the US claims on duals elevate the burden of US status over the function and rights conferred on Canadian soil by being born or naturalized a Canadian?

    Would the Harper government and Minister Flaherty be happy to have Canadians perceive them as enablers of US arrogance, and having given the US any rights or powers whatever over the Canadian held and Canadian generated assets belonging to Canadian citizens and residents? Talk about ‘giving away the bank‘! How’s that for a legacy?

    Actually, maybe that’s a good heading for submissions: “FATCA in Canada: Giving away the bank; (and the pension plan and the credit union and the insurance plan, and Canadian family savings……….)”

16. @Not-a-FATCAnatic

    Re: “Ask what steps have the Federal government and the Department of Finance taken to give Canadians meangingful or substantive notice that FATCA exists as an issue – AND to publicize this current opportunity to comment – the answer is NONE re this submission process – other than the notice that just appeared on the Department’s website – which not many ordinary Canadians make a habit of  checking every day.”

    Comment: You betcha.  They clearly have kept this under wraps as long as possible, and only are going through the formal comment process (with minimum publicity) at the last minute.

    Re:  “This is a very telling point, and possibly good ammunition when cc’ing or contacting opposition members like the NDP and Liberals – is this another example of circumventing the democratic process in Canada – by slipping an agreement of this lasting magnitude under the public radar? Any agreement with the huge significance of FATCA, which cedes Canadian sovereignty – even through an IGA – ‘intergovernmental agreement’ – is another step on a slippery slope into being another US state. Since when do real sovereign countries – as Canada should be, cede to ‘foreign countries’ reporting or any other authority – even indirectly (via IGA arrangement) – over all or most of the financial accounts and assets of all, or even 1 million or more of their citizens ?“

    This in my opinion needs to be the heart of the message for Canada: if FATCA (or an IGA for implementing FATCA in Canada) is such a good thing, why are they sliding it in as discreetly as possible.  Precisely because they (the Government, and industry that have pushed them in this direction) know damn well is it simply bowing to a US diktat, and that wouldn’t play well with everyday Canadians.

    In case it’s of any interest, I am working on a short (one-page) appeal, statement (not sure what to call it – something that could be placed as an online ad) for Canadians to contact Minister Flaherty and their MPs to call for a halt finalizing an IGA with the US, and, if that fails (because of the time factor) to secure their MPs’ pledge to oppose its approval in parliament.   While direct submissions should be made, this needs to be public and, frankly, a bit confrontational.  I hope to have something for IBS comments in a day or so.   Suggestions are welcome on where something could be posted for max attention, where to direct Canadians for more information, and how to focus people’s attention on it.

17. @Schubert,

    The author, Moby, posted it too a bit earlier. Thanks to Just Me and to ACA for highlighting Moby’s submission. It is important for all to read. I think Moby’s hard work that he generously shares with us is brilliant and shows a way to do this without discrimination to one nationality and the sovereignty of a nation. It also highlights the absurdity of it all. If it is to be, it should be a two-tiered, user-pay system. Where have we heard those terms before, but in this case, it so aptly makes sense (to me).

    Also, look at the comment just below from Not-a-FATCAnatic and reply from Jim Jatras.

    Again, why the HHHH is the Canadian media not picking up on this story?

18. @calgary411

    Re: “Again, why the HHHH is the Canadian media not picking up on this story?”

    At the risk of sounding like a broken record, the answer has three words: money, money, money.   The impacted institutions and the Government, who have the resources either (1) to fight FATCA or (2) discreetly to surrender to it while pretending to fight it, are in a position to set the narrrative.   Anyone who’s had any experience with mass media know that stories rarely result from intrepid reporters dragging the truth into the light of day.  Instead, almost always they pick the low-hanging fruit of the narrative that’s being peddled by those willing to commit the resources to their side.   Right now, that’s not “Ottawa is throwing in the towel to Washington,” since nobody’s willing (yet) to pay to market that story.  So instead, the story is “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),” blah, blah, blah.   Just move on folks, nothing to see here.  

19. IMPORTANT DEVELOPMENT: I just got a call back from Mr Shoom, a very nice younger sounding man. It sounds to me that there’s no doubt that Canada is currently planning to enter into an IGA. I asked him how close Minister Flaherty is to making an announcement about it and he said that it would likely be by the end of the year. I strongly urged him that a sufficient amount of time be given to receive more public input and that the government make sure that this gets out to all Canadians as it will be a cost borne by all taxpayers. He said that the above announcement would have gone out as a press release to those media outlets that subscribe to receiving them. I said it is not a good idea to enter into an IGA when there are those in the US government who would like to kill FATCA, and that there are many experts who believe that FATCA would be unenforceable without IGA’s. I talked about how FATCA will impact USP’s in Canada and how it will create two kinds of Americans in Canada, one who is undetectable by the banks vetting process, who can still enjoy RRSP’s, TSFA’s with impunity, and those of us with more outward ‘indicia’ who will be targeted. I told him about the couple I know who’ve put all their assets in the non-American spouse’s name and how the targeting of USP’s will result in divorces and possibly even suicides as people will feel abandoned by both the US and Canada. He was interested when I told him how I touched on many of my concerns in the Pre-2013 Budget submission I made and he said he’d look it up. Again, my greatest emphasis was on not entering an IGA, as it there is a growing consensus that FATCA would not be enforceable on its own and its survival is dependant on IGA’s and how the Canadian government should watch developments in the US more closely. He is very approachable and more than just a paper pusher. He may become our next best friend. Call him.

20. I posted an outline of the UK IGA in the forum under FATCA Issues. Just my reading. I’m not a lawyer.

    If you have a US place of birth, your account will US reportable (if it’s over $50k or your financial institution decides to report lower value accounts also) and the way to make it not US reportable is to provide 1) W-8 2) copy of non-US passport and 3) CLN. In the absence of a CLN, the Canadian financial institution must make a judgement on your explanation of a) why you don’t have a CLN or b) why you didn’t acquire US citizenship at birth. If you are a US citizen not born in the US, the procedures may be different.

    Canadians writing to their representative might want to highlight the unfairness of the provisions for making a US reportable account not US reportable and the disproportionate impact this would have on Canadian citizens. If FATCA does get enacted, Canada should protect it’s citizens by amending the wording to Annex I, II, B, 4 of the Model IGA to:

    1) Exempt Canadian citizens from the requirement to present a CLN because it places a grave burden to get one now on many Canadian citizens born in the US who took their oath to Canada many years ago at a time when a getting a CLN was not standard procedure;

    2) Provide a time-limited exemption ie any renunciation prior to xxxx should be exempt from presenting a CLN; or

    3) Cause Canadian financial institutions to merely have to collect a statement of why there is no CLN and not be asked to judge whether it’s reasonable

21. @bubblebustin, I called too. Reserving judgement.

    @James Jatras;

    I think we all would be very interested in your ” short (one-page) appeal, statement” – as we would benefit in seeing what you choose to highlight. We know it from our vantage points, and I’d like to see what you include and how you frame it.

    It sounds from bubblebustin’s comments that time is important, and perhaps just sheer volume of contacts and submissions rather than agonizing over the exact contents – apart from the message that Canada needs to just say NO FATCA – No IGA, nothing, nada. Otherwise, if they think we’ll accept any modifications, the US will just slippery slide out of it, or invent future work-arounds, etc. when we’re not watching. And our federal government would too – if their methods as demonstrated by the ‘deafening silence’ in public up to now, after the initial public statments by Minister Flaherty is any indication.

    If not preparing to bow to the US, then why no further public statements and defiance?

22. @Friends

    Another stupid question (I ask a lot of them):  I know how to post a comment but how do I post a new item?

23. Thanks, bubblebustin, for this important update. It is alarming the message you received “between the lines”. And, it is disgusting that we are led to believe we will be listened to, when indeed Canada is on its way to signing on the dotted line.

    I am waiting for my call back from Mr. Shoom.

    Thanks so very much for your comments to him and reporting here.

24. You have to get Petros to do his magic. I’ll send him an email in case he hasn’t seen this.

25. @Calgary

    You’re welcome. I just wished I’d had better news 🙁

    I have the impression that he, like most Canadians, is still unaware of the hardship this will cause so many Canadians.