Dear Mr. xxx,
Thank you for contacting me about the ongoing situation regarding the potential for Canadian citizens born in the United States to be pursued for US income tax by the IRS.
As you know, the situation is complicated and the legal status of Canadians born in the US, the threat of IRS action, and the possibility of real punitive action is still unclear. As a Canadian citizen born in the US, I can assure you that I share your concerns and am dedicated to defending the equality rights of all affected citizens.
I am dedicated to taking action on your behalf. I have sent correspondence to the Prime Minister on the issue. The government has taken the position I urged and is forcefully advocating that the US stop targeting law-abiding Canadians in pursuit of those US citizens hiding in the Cayman Islands.
In addition, I recently met with the US Ambassador to Canada, David Jacobson. He is also very much absorbed by the controversy. His main message to me was that I should share with my constituents his wish that we “stay calm.” He indicated to me that he understands the issues and is working closely with officials at all levels of government in the US and Canada to find a pragmatic solution to this problem.
You are not alone in this situation. Many are seeking a solution to the problem. I will keep you posted as I work to find a sensible approach. In the meantime, please keep me posted through my constituency office of any changes in your situation.
Sincerely,
Elizabeth May, O.C., M.P.
Member of Parliament for Saanich-Gulf Islands
Leader of the Green Party of Canada
Wow, really great to read this. Well, except for the advice to “stay calm”. We need 7 million people world-wide to make their voices heard. For all we know, the US Ambassador to Canada may simply be helping to come up with some IGA variant, whereas nothing I’ve heard of short of ending citizenship-based taxation by the US seems good enough for me.
Her comments are intriguing. I wonder what evidence she has to support her claim that “The government has taken the position I urged and is forcefully advocating that the US stop targeting law-abiding Canadians in pursuit of those US citizens hiding in the Cayman Islands.”
Also very interesting that she had a sympathetic audience with Jacobsen — not that I trust any US diplomat to say anything to counter what’s happening in the homeland. And he’s put out the “stay calm” line before, with precious little evidence from Treasury or the IRS that they give a rat’s *ss for the trials and tribulations of expats, in Canada or anywhere.
The info stream from the IGA talks has dried up in the last month or so; my bank contact isn’t responding to emails (that’s a little worrisome), but I just sent him another with a copy of May’s letter attached. Last concrete info I got was that all the bank/credit union folks were going to get the latest IGA draft in early April — and that’s when the veil of silence descended. I’m sure those guys will be getting nervous about where this will lead — because if there’s no IGA they’ve got some tough decisions to make about signing (or not) individual deals with the IRS. Also — even if there is an IGA — the legislative calendar is getting pretty tight (assuming Harper/Flaherty don’t find a way to circumvent the process).
It sounds nice but I wonder if she realizes that American pragmatic and Canadian pragmatic are not likely to be in the same universe let alone on the same page?
I’d like to believe better of my native land but I just automatically default to thinking the worst.
stay calm, your rectum tightens up too much when you get nervous, and it ruins the experience for me
@Yoga Girl, Mark Twain
LOL on both counts!
I downloaded (from Globe & Mail) and quickly speed-read/scanned the draft Budget Implementation Act tabled on Monday. Also did a keyword search of document.
There does not seem to be anything remotely related to a FATCA IGA contained therein.
Why exactly should I stay calm when the potential for FBAR fines has the potential to financially destroy my family? At $22,000 an year income, my family can’t afford to get hit with major $10,000/year FBAR fines.
Jacobson’s response is exactly what I would expect from a paternalistic tyranical government trying to fleece expats. Stay calm while we destroy you, because it is your destiny to be stripped of your wealth and our destiny to take it from you. Mr. Jacobson, I have one thing that keeps me calm, my blue passport–i.e., the one from Canada, and my CLN=Calm and Lost Nationality.
I just received my identical form letter as well. None of my questions, of course, were directly answered. I’m a bit disappointed, but not really too surprised. I think Parliament will be circling the wagons soon to both announce and then try to justify an IGA. Still hard to say how this will all play out.
Here’s what I wrote, back on February 1st:
From: [Deckard1138]
Date: Fri, Feb 1, 2013 at 11:12 PM
Subject: Question from MP Website: FATCA in Parliament
To: admin@elizabethmaymp.ca
Subject: FATCA in Parliament
Message: Hello Ms. May,
Thank you so much for the efforts that you and Erich Jacoby-Hawkins (who I had the pleasure to meet at the FATCA Forum event in Toronto on December 15th, 2012) are making to raise awareness of the very real dangers of FATCA and any IGA that Canada might sign with the U.S. government.
I would like to know more about how you think the growing anti-FATCA movement can best assist you in your efforts, especially in Parliament. For instance, would you be prepared to raise the issue in Question Period, or perhaps even consider a private member’s bill to clarify the status of ”U.S. Persons” in Canada to ensure that they receive equal protection under Canadian privacy laws and the Charter of Rights and Freedoms?
I would also hope that you might be in a position to reach out to other parties, especially the NDP, since they are the official Opposition. We have had some infrequent signs of interest from the NDP, including from Paul Dewar, but it has been some time since they have said anything substantive about FATCA and related issues.
I won’t take any more of your time right now, but please know that we are all so grateful for your support. At the same time, we fully empathize with you and support you in your own personal circumstances as a dual citizen. While our individual situations may vary, we are ultimately all in this together.
Best regards,
[Deckard1138]
Elizabeth May wants to be kept informed and she will keep us posted. Her email address is Elizabeth.may@parl.gc.ca. Hard to ‘stay calm’ under the circumstances and who would trust the reassurances from a US diplomat? The lack of real current information on the status of FATCA discussions is a real concern. Why the information blackout? Or do they just not know what to do?
Where is Joe Smith? We need him to repeat the 9 ‘I am calm because’ commandments again.
Well, got a response this time. Total frustration on the part of all FFIs in Canada. The heralded April unveiling of an IGA draft turned out to be a total non-event and there has been nothing since. FFIs are trying to get a meeting/conference call with the feds to find out what’s going on. They have been told an IGA is “still on” but are now getting very nervous about timing — the clock is ticking very loudly.
@Wondering — that’s encouraging, although once they’ve got it in hand it won’t take long to show up.
This is bad news for the FFIs, but good news for everyone else. And maybe (wishful thinking) it adds credence to Elizabeth May’s line about the feds being forceful with the Americans. We can only hope.
Come drone me.
http://www.rall.com/rallblog/
I would still view Elizabeth May’s public statements on this issue linked below as taking precedence over any direct correspondence(in absence of any conflict in position).
http://www.greenparty.ca/backgrounder/2013-01-28/backgrounder-canada-and-fatca
http://www.greenparty.ca/media-release/2013-03-13/implementation-fatca-likely-unconstitutional-says-leading-constitutional-ex
Those above statements were pretty harsh and pretty direct as regards to FATCA.
Second, as to perhaps what Arrow has been hearing. I have been heard that Harper and Obama are meeting in early June and FATCA will be ON the agenda in the discussion between themselves and their staffs. Supposedly Obama and Harper have avoided any direct discussion about FATCA to date.
I will also add that it is pretty much impossible at this point that any IGA will be implemented into Canadian law prior to the summer. Flaherty is simply out of time at this point. I even have questions about whether it will happen in the fall session of Parliament. The Budget Implementation Bill was dropped on Monday and there is absolutely nothing about FATCA.
True North Strong and Free! The timing of 1812 celebrations probably helps!
Check this out too
http://michaelpower.ca/2013/04/fatca-revisited/
The letter? It came to me via the office of Elizabeth May. I am not affiliated with the Green Party (but was a classmate of Ms. May’s at Dalhousie). Her office staff may have seen the previous posts and thought I’d be interested. I was. Peter Hogg, a well-regarded constitutional law expert, acting in a personal capacity, wrote the letter to the Department of Finance in response to a call for submissions. You can find it here.
While my previous posts wrote about the PIPEDA-related privacy aspects of FATCA compliance and were written before an inter-governmental agreement (“IGA”) was a gleam in anyone’s eye, Mr. Hogg addresses the IGA in the context of the Charter of Rights and Freedoms(“Charter”). In doing so, he based his comments on the American model FATCA IGA and how the procedures may result in a violation of the Charter’s equality section (s. 15) and raises the specter of liberty and privacy violations (sections 7 and 8). His view is that discrimination based on citizenship would be a Charter violation and his preferred approach is to limit reporting to US residents, which likely would not violate s. 15. All in all, the letter is an informative read and I recommend readers to have a look at it.
It will be interesting to see if the eventual form of the IGA heeds Mr. Hogg’s advice or plunges the Canadian government into the proverbial constitutional fire.
In March of 2012, I received a very similar letter from Ms. May. In fact the wording was almost identical. I have no doubt she is most sympathetic to the issues, especially as she is a ‘born in the USA’ Canadian. However, judging by the similarities of her words, I really don’t think much has changed in the year.
Tiger-
As I suspected her public statements are actually more up to date.
I thought Ms. May’s letter was pretty good. However, she seems to point a finger at Americans living in the Cayman Islands. That is not fair. ACA also seems to care only about expats living in the rich G20 countries. That is also not fair.
Millions of Americans live in the developing world (Latin America, Caribbean, Africa, Asia etc). They will be affected by FATCA and Fcukbar like everyone else.
Moreover, many countries in these parts of the world do not have high “income” tax rates per se. However, they have plenty of other high taxes such as VAT, customs, excise taxes etc. Moreover, many of the developing countries lack even the most basic public services normally found in G20 countries.
For example, the country where I reside has an UNEMPLOYMENT RATE of 40%, has RUNNING WATER and ELECTRICITY only 50% of the time. The roads are either full of potholes or unpaved. The hospitals are so poor and unsanitary that most people travel to another country for medical treatment for illnesses and injuries that are not even serious.
It is 100% correct to argue that expats shouldn’t be taxed from the Homeland because they don’t receive government services or benefits from the Homeland. However, it is exponentially worse for those expats who don’t receive much for government services or benefits at all, not even from the country where they are living.
So if people or organizations claiming to represent Americans abroad (like ACA) are committed to defending Americans abroad from the predatory homeland government, they really should be taking into consideration ALL Americans living abroad, not just the ones residing in the rich countries like Canada and Switzerland.
Power is out now, time to go fire up the generator.
Joe Expat
Will FATCA fall apart?
FATCA can wreck havoc on global financial markets. And the onus and responsibility is ultimately on the US to make it work administratively, even if it probably won’t pay back a dime, and will cost the rest of the world $100’s of millions in administration costs.
Meanwhile, only a handful of countries have initialed IGA’s – and the treaties necessary to make those work are stalled in the Senate.
And in Canada – which likely has the world’s largest population of US born citizens – any FATCA IGA would clearly violate the Charter by discrimination based upon nationality.
Now consider what else the US government has on their plate:
– impact of sequester cuts on all government agencies
– vast confusion about and ongoing resistance to the implementation of “Obamacare” – in which the IRS is mandated to play a key role, expanding its workload vastly
– growing $16+ trillion deficit
– divided and dysfunctional Congress
– an ultra-violent drug cartel war just across the southern border – and the newly changed Mexican government’s position to restrict and possibly uncouple their co-ordination with US law enforcement agencies
– a horrific epidemic of gun violence and the recent defeat of even the most minimal gun control legislation
– collapse and bankruptcy of municipal and state governments
– the record number of US households on the SNAP food stamps program – now more than 23 million or 1 out of every five households
Maybe “remaining calm” – while lobbying relentlessly – is the best advice.
Dear Joe Expat.
Thanks for that reminder that US Persons all over the world need to be represented, no matter the country they now reside in. We have discussed the important issue of the cost of FATCA in poorer countries before Jamaican FATCA Costs Math Quiz.
Your words ring true. Please remind us as often as you think we need it.
@ Joe Expat
When I read that I wondered if Ms. May meant to say “US citizens hiding money in the Cayman Islands” instead of “US citizens hiding in the Cayman Islands”. It makes more sense that way (to me anyway). However, she is a very sharp lawyer as well as an astute politician so I’m sure she chooses her words quite carefully.
I’m not keen on the part in ACA’s RBT proposal that would require certain countries to be designated ‘tax havens’. Like branding certain countries as the the ‘axis of evil’ therefore deserving of any hell that the champions of freedom can rain on them.
@Wondering…
You missed one… The skyrocketing number of Americans going on Disability payments as an alternate to welfare! 🙂 or is it 🙁
Good synopsis, however… I could add more, but you made your point well.