Dear ______:,
Thanks for sending the Green Party announcement regarding the U.S. Foreign Account Tax Compliance Act (FATCA). I have asked our National Revenue Critic, now Murray Rankin, to fill me in on the latest.
The NDP is very concerned that the Harper government is currently participating in negotiations with the US over an Intergovernmental Agreement (IGA) for the implementation of FATCA in Canada. As you know, such an agreement would likely require Canada to enact laws and regulations that would require Canadian financial institutions to comply with FATCA. The NDP has serious concerns both about the lack of transparency and consultation during the negotiation process and the potential infringements on the rights of Canadians.
If implemented, the IGA would likely require Canadian banks, investment funds and other financial institutions to disclose annually to the U.S. Internal Revenue Service (IRS) accounts held by American Citizens, which includes dual citizens in Canada. Failure to disclose account information could result in a withholding tax applied to U.S. income earned by the institution or by account holder. The US’ stated policy goal of FACTA is to aggressively target American citizens who are improperly shielding assets in offshore accounts, with no consideration of the nature of existing Canada-US tax cooperation and the fact Canada is by no means a tax haven for Americans.
Essentially, FATCA would allow the United States to bypass the exchange of information between the IRS and the Canada Revenue Agency and instead get information directly from Canadian financial institutions. Apart from the extraterritorial enforcement dimensions to FACTA referenced above, there are widespread concerns that this exchange of information could potentially violate existing Canadian privacy laws.
New Democrats have repeatedly raised concerns over FATCA with the Conservatives and demanded that the government act on its responsibility to protect Canadian citizens from this improper and unreasonable intrusion of a foreign government.
New Democrats have also been fighting for the Conservatives to finally get serious when it comes to tax havens. But this does not mean rolling over and playing dead in the face of a misguided effort of the US to, in effect, treat Canada as a tax have. Just as we believe the Canadian Government has a responsibility to protect Canada’s tax base, we understand the United States’ desire to protect their own tax base — but this cannot come at the cost of the rights of individuals in our own country. We are demanding answers and transparency from the Conservatives on FATCA, and will not support an agreement that violates the privacy rights of individuals.
Again, thanks for contacting us on this. Please be assured that my New Democrat colleagues and I will continue to stand up both for fair taxation and for privacy rights, as well as for an approach to tax havens that is both aggressive and, unlike FACTA, reasonable.
All best,
Craig (Scott)
MP Toronto-Danforth
AFAIK this has consistently been the NDP position on FATCA since their BC caucus began pushing on the issue more than a year ago. It is comforting to know this still is the NDP position, as it also is the position of the Greens. The Liberals and Conservatives are choosing their words on the issue, when they speak at all, a lot more guardedly than I am comfortable with.
The Liberals are irrelevant. Murray Rankin represents Victoria BC of all places and is Denise Savoie’s successor. We need the NDP(as official opposition) and the Greens(because Liz May is an “independent” under HofC rules which gives who certain abilities in terms of proposing amendments to the full house). May can force an up or down vote on FATCA even if the government buries it in a larger piece of legislation by introducing an amendment to strike out that part of the legislation.
Went to his FB site and left the following:
Thank you for the support of those who are being assailed by FATCA, Craig. My own personal position on this is: My wife pays taxes to Canada, each and every year properly with no intent of evasion. She will not continue to have her income (which should go to the support of our family) taxed by a foreign nation to which she has no further ties to other than the citizenship, which she will be dropping very shortly by applying for Canadian citizenship. Legislation or no legislation, if the government (in this case, the United States Government) is not willing to represent those who pay taxes, is not willing to provide the services for which we (those who live in foreign lands) pay taxes to said government (through the IRS), and is not willing to turn anything but a deaf ear to those disenfranchised citizens, then they have absolutely no right to OUR money.
@ Joe Smith
Your response from Craig Scott was almost word for word the one I got … http://isaacbrocksociety.ca/2013/02/16/email-blitz/#comments. My favourite line is this: “We are demanding answers and transparency from the Conservatives on FATCA, and will not support an agreement that violates the privacy rights of individuals.”
My biggest concern is that the Harper government will get around a parliamentary debate on FATCA somehow and impose an IGA on Canadians by virtue of its majority. I think we have got to keep FATCA on their minds (Greens, NDPs, Libs and Cons) at every opportunity we can find. Here’s an opportunity for the Green Party (my comment is the only one, so far, about FATCA) … http://www.elizabethmaymp.ca/survey
@Tim and maybe others
For purposes of clarification, I think we should understand that the Government of Canada can enter into an IGA with the US without taking it to Parliament. The opposition parties can of course raise the matter in question period or introduce legislation that would prohibit such an IGA.
Over at the Maple Sandbox, Tim and Blaze have some recent comments which address my concern that an IGA will just happen somehow without parliamentary debate and consent. It sounds like this won’t happen although if Flaherty gives FATCA implementation authority to the CRA as part of the Spring budget I wonder if that would get lost in the debate. Budgets are big and wordy and parties and MPs have priorities so where would FATCA rank in those? Obviously I don’t understand Canadian politics like Tim does.
http://maplesandbox.ca/2013/whats-new/#comment-4506
go for it. If you win, it will be the Place I move to
@Em Thank you for the reference. I should check Maple Sandbox more often than I do.
@all
I received this letter from Alex Atamanenko’s office last month (NDP-BC Southern Interior) in response to the anti-FATCA bulletin I’d sent them in November that included a request he give his input to the Dept of Finance on FATCA:
“Hi -,
Thank you for forwarding this information to our office. I’ve forwarded the message on and think it must be having some influence on the Minister of Finance, because he has not signed on to the intergovernmental agreement in the first round. That’s not to say the Harper Government won’t cooperate with the IRS. I’m trying to stay current on the issue and appreciate your input.
A must apologize for my delay in responding, we were having a staff changeover in mid November and struggling a bit to keep up with all the correspondence.
Gail
GAIL HUNNISETT
Constituency Assistant | Adjoint de circonsciption
Alex Atamanenko, MP | Alex Atamanenko, député
New Democratic Party | Nouveau Parti démocratique
______________________________________________________
(T)250.365.2792 | (TF)1.800.667.2393 |(F) 250.365.2793
ndp.ca | npd.ca
CEP | SCEP 232”
Alex has been very outspoken about FATCA in the past, but is as clearly in the dark as we are about how our federal government will choose to respond. Our financial institutions are between a rock and a hard place, but then so are many of our citizens. How will Canada choose to define itself?
In the summer of 2011 I wrote a paper outlining the problems with FATCA, which I had learned about only in June of that year. I sent it to Atamanenko, who was hugely supportive and asked my permission to redistribute it (which I of course gave). As I recall, one of his staffers was a “US person” at risk. The NDP also participated in a public program in Ottawa last winter.
@ bubblebustin
That’s a good response from Mr. Atamanenko. I received one of the best replies from him when I did my 300MP e-mail blitz.
http://isaacbrocksociety.ca/2013/02/16/email-blitz/comment-page-1/#comments
I really hope he’s right about having had an effect on the IGA process. Since it obviously hasn’t been stopped then slowing it down is helpful. If it gets slowed down enough then maybe stopping it becomes possible. If FATCA and an IGA are NOT part of the Spring budget bill then that will be a good sign. (Fingers crossed.) If FATCA and an IGA are part of the bill then it will give Mr. Atamanenko, Ms. May and others who are on our side something concrete to shoot at. We have to make sure it remains a priority with them and keeping them apprised of our feelings on the issue will surely help to keep FATCA on their minds.
Based on some digging later today I don’t think there will be any legislative changes before the Parliamentary Finance Committee until late April at the earliest. I also believe for other reasons Flaherty’s budget will delayed into April. The reasons for this are as follows:
1. Tony Clement has already tabled the “estimates” so the federal civil service(Schubert’s old colleagues) essentially already have their budget. The provinces already have a pretty good idea of their federal transfers too.
2. Ontario is delaying their budget until April do to the recent leadership change. The feds tend to like to do their budget close to Ontario’s to avoid any last minute changes that could effect each other.
3. The mess in the US(other than FATCA). The is going into sequester tomorrow night and their might be a US government shutdown as of March 27. Hardly a great time for Flaherty to bring down his own budget.
4. A badly kept secret in Ottawa. Flaherty has significant health issues. His wife Ontario MPP Christine Elliott wants him to step down. Also if their is an Ontario election and Tim Hudak and the PC’s win Elliott will probably become Deputy Premier or Ontario Finance Minister. Big conflict of interest. Already believed that Flaherty will do whatever is necessary to further Elliott’s career.
@ Tim
I know you mentioned that Ted Menzies could be Jim Flaherty’s successor but I still don’t have a clear picture of what his stand on FATCA would be if he became Finance Minister. His reply to my e-mail seemed a tad defeatist to me. It was almost as though he was saying FATCA is a FACT and Canada just has to find something sugary to make the medicine go down. I hope I’m wrong though. Anyway changing to a new Finance Minister would slow things down don’t you think? I keep hoping that slow will lead to full stop but perhaps that’s wishful thinking. OTOH, a new Finance Minister would be able to toss out Flaherty’s promise about the CRA not collecting from Canadian citizens. This is very hard to suss out.
Tim, the sequester impact probably won’t be felt until the end of this month or beginning of April b/c, as I understand it, most govt, agencies have to give 30 days notice for lay-offs though furloughs might happen sooner. If the early part of the sequester is a fizzle in terms of how many home landers feel the pinch, the GOP will not be moved to bargain at all (a big fear of the Dems and the WH, which is why they are fear-mongering hardcore right now) and a shut down might happen.
A US govt shut down would be a mess, but the states will already be in a tizzy b/c they have to have their budgets set this month. Reason being that school districts have to have pink slips or contracts to teachers by the beginning of April. So much ugly could happen this month and into April.
If it gets bad down South, how will that effect Ottawa’s stance on FATCA or cooperation in general. do you think?
CRA collecting on Canadian citizens on behalf of the US is not going to change any time soon. A Flaherty to Menzies transition would not be that big of a deal. Menzies has been Flaherty’s associate minister for a long time and involved with all this “stuff” too.
What I was trying to say earlier is I don’t think any legislation to implement FATCA in Canada will be introduced until late April at the earliest. There are “other” alternatives to a “Model 1” IGA such as a Swiss Model 2 IGA but would require provincial cooperation(because of the changes required to provincial privacy laws). Do any of you see Adrian Dix and the BC NDP going along with FATCA. I don’t think so.
There is a very real possibility this all gets pushed off to the fall. At the point thought the clock will strike dangerously close to midnight January 1 2014. As one observer of this put to me right now US Members of Congress and Canadian MP’s are in a major and very dangerous game of chicken. Repealing FATCA would be political suicide in the US for US politicians but voting to go along with FATCA would be political suicide in Canada. Which side flinches first.
I’ll just make note that I don’t think many of the NDP MPs realize yet Flaherty will have to table legislation to implement FATCA. I suspect Flaherty does knows this and knows once the NDP finds out that legislative changes will have to be made blood will flow down the steps of Ottawa. Flaherty will be crucified.
@ Tim
Thanks for that bit of clarity. As for flinching, I know who I want to flinch first but it’s a David versus Goliath situation and real life doesn’t follow a mythical script.
“IF” the government didn’t have to actually change the law to implement FATCA it would probably be a done deal. Its the need to “change” existing Canadian law that is what I think is making them choke. I also think there will be a more serious attempt to introduce US legislation to require US banks to reciprocate FATCA reporting requirements. I highly doubt it will pass but some time over the next month you will probably see more awareness of FATCA in the US. I don’t know what will come of it.
Here’s what I don’t understand. The CRA already passes account info – existence and probably interest – to the IRS on USP’s, so why is FATCA needed for Canada at all?
a:
CRA only passed account info on US “Residents” not US Persons resident in Canada whose tax info is reported on normal CRA domestic reporting forms(CRA doesn’t and can’t legally ask your citizenship or where you were born so they have no idea what specific Canadian residents are USP). To implement FATCA Canadian law would have to be changed to allow CRA to ask Canadian residents whether they were born in the US or are US citizens.
So we’d have to indicate that on our Canadian tax forms? Or is the plan to let the banks find out, report it to CRA? This is all very nit-picky in a doesn’t make sense way. Is it also a way to get at non-USP spouses and get tabs on kids?
It is amazing how deaf and silent the Canadian government (and the US and other governments) are to their citizens concerns and hardships resulting from FATCA. Canada needs to protect the rights of its citizens – and dual Canadian US citizens living in Canada are as much Canadian citizens as any other non dual citizen.
Perhaps wishful thinking in my part, but maybe things will get so bad in the US that any move like DATCA that would have a negative effect on the economy will be shot down, taking FATCA with it.
@NorthernShrike
Good on you. My MP, John Weston (Con) also has a close staffer who is married to a USP. I’ve had some lengthy conversations with her and she was pretty freaked out.
http://www.fin.gc.ca/notices-avis13/2013-03-01-eng.asp
March 1, 2013
MINISTER OF FINANCE TO HOLD MEDIA AVAILABILITY
Minister of Finance Jim Flaherty will hold a media availability today, Friday, March 1, 2013, to speak about the Canadian economy and global economic events.
The media availability will take place at 1:00 p.m. in the lobby of L’Esplanade Laurier, East Tower, 140 O’Connor Street, in Ottawa.
FOR FURTHER INFORMATION:
Kathleen Perchaluk
Press Secretary
Office of the Minister of Finance
613-996-7861
Jack Aubry
Media Relations
Department of Finance
613-996-8080