Although both the US government and the Canadian government seem to believe that little can go wrong if and when Canadian financial institutions begin reporting on the banking and investment accounts of all deemed “US Persons for taxable purposes” in Canada. The draconian penalties assessed by the United States for even the smallest mistake is reason enough to believe that Canadian financial institutions are likely to err on the side of extreme, and even paranoid, caution.
A good example of what could happen can be found in a recent report Canada’s Privacy Commissioner issued about another agency in Canada tasked with the job of keeping an eye on suspicious activity in the banking sector.
According to a post in The National Post:
The federal agency responsible for monitoring financial institutions for evidence of nefarious activity is still collecting and keeping personal information it should not have, even though it was warned to stop gathering such data four years ago, the federal privacy commissioner says.
A new audit of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) — the department responsible for monitoring consumer bank accounts across Canada for signs of terrorist fundraising or fraud — has found information is collected and kept seemingly without reason.
Despite having been told four years ago to cease and desist, FINTRAC is still amassing, and saving, information about the banking transactions of ordinary Canadians to the tune of 165 million files and counting.
Why?
More than 300,000 organizations and government departments, including all of the major Canadian banks, report suspicious activity to FINTRAC. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act contains severe penalties for organizations that fail to report suspicious monetary activity. As a result, organizations send far too much information about trivial matters and activity that is in no way suspicious, Bernier said. They also send personal data, such as social insurance information, that isn’t required.
While the US seeks to assure countries with whom it is currently attempting to negotiate IGA’s for FATCA implementation in 2014, the more likely scenario of a FATCA regime is over-reporting and over-identifying of possible “US Persons” rather than the simple double-check on the earned income of Americans living overseas to prevent “tax evasion”.
FATCA is just as likely to become the recipient of massive amounts of personal data – some of which it isn’t even looking for – that will be kept indefinitely for purposes yet to be named.
This whole affair has certainly turned me into a fiscal conservative (not social conservative; there is a difference)…to hell with big government and CBT!! As soon as government gets big enough to tax away all your money, they will!!!
This from CBC
FINTRAC under scrutiny
A government agency that collects financial information of money launderers may also have your financial records – and lots of them
http://www.cbc.ca/player/News/TV%20Shows/The%20National/ID/2414366357/
This was bound to happen. If a government agency gets some information, they grab it and go for more. Knowledge is power, remember. Look at NSA and GCHQ and their massive data grab and storage. It might impede the US-EU trade agreement and the attempt to share tax info. There’s resentment being openly expressed about the ‘five eyes’ programme (US, UK, Canada, Australia and New Zealand). The UK is silently acquiescing to EU statements and new policy discussions, because of course they are part of the problem, standing shoulder-to-shoulder with our friends in the US. Blair’s poodle has morphed into Cameron’s what? Sheep dog? It has to affect FATCA implementation, and perhaps a rethink on IGA’s.
@ Yoga Girl
To answer your question—YES, it’s inevitable.
But there is hope….
and you can’t make this stuff up….
They are too incompetent to accomplish their FATCA mission…
IRS Pays Billions In Bogus Refunds—But Legit Refunds Still Get Audited
So, these guys give away $13.2 Billion a year on average in EITC fraud, and yet they are in charge of the global FATCA round up of all U.S. Persons living everywhere on the globe.
They are not compliant with the White House demand (Executive Order) that this stop.
Is is willful non compliance, or benignly (incompetently) non willful? Will there be any consequences for their failures? Do we have a FBAR penatly in under used Statutes we can pull off the shelf and hit their leadership with?
Apparently not. Executive Orders are toothless when it comes to the IRS.
Yet, they are put in charge of the FATCA mission is to extort 100s of thousands of financial institutions around the world to be compliant or the IRS will require withholding of 30% of their U.S. sourced income. And who will monitor that? The same guys asleep on EITC fraud, I guess.
This FATCA effort (according to Congresses Joint Committee on Taxation) will result in less than a $1 billion a year ($8.5 Billion over 10 yrs) supposedly lost in offshore tax revenues? According to Senator Max Baucus, this IRS management with their FATCA tool will “root out tax cheats once and for all!” http://bit.ly/V6Aee7 Is that a knee slapper or what?
Talk about misplaced resources and attention!
No, you can’t make this up. 🙂
@Just Me,
That’s sweet. Came from Rangel. This guy wasn’t declaring the income from his Dominican Villa. Seems that cost him $10k in back taxes and penalties. He obviously didn’t want anyone else to get off so easily and wants 27.5% of the Villa assets from other people.
David Jacobson said — that’s reason enough to question.
http://www.theglobeandmail.com/news/national/harper-an-unattractive-target-for-the-nsa-intelligence-expert-says/article15090483/
When Snowden, a former NSA contractor, began leaking materials to the media earlier this year, David Jacobson, then U.S. ambassador to Canada, was emphatic that the spy service wasn’t training its mighty surveillance powers on its northern neighbour.
“The United States does not spy on Canadian citizens,” Jacobson said.
Some raise concerns about the reality that a good deal of Canadian Internet traffic is routed through the United States, providing potentially easy access to American intelligence.
Canadian privacy commissioner Jennifer Stoddart said in June she would look into any implications for Canada posed by the possible large-scale U.S. snooping exposed by Snowden.
It wasn’t until after I posted this that my husband reminded me that I am already in FINTRAC’s system.
FINTRAC also keeps records of foreign citizens who own Canadian property, so I was “reported” when I was added to our home’s title.
But judging from the article, it appears that any US money transaction is basically up to the discretion of the bank to judge as reportable or not and it appears they err excessively on the side of caution. There is little reason to believe they same wouldn’t happen under FATCA and that in addition to the information FATCA requires, the banks might send information that isn’t required as they already do with FINTRAC.
This is the problem with surveillance societies – eventually everything is suspect and everything is deemed the government’s business and right to know.
And once your government, or someone else’s, has your information, they will invariably begin to think up ways to use it to the advantage of government.
While it annoys me that some people with means are able to avoid paying taxes through questionably and even illegal means, I don’t think the money lost is more important that maintaining the liberties and freedoms of your country’s people. I wish more politicians understood this and that their real job is to preserve it. The social good and order need not trample citizens.
However, our current government(s) have bought into the whole idea that maintaining some sort of “fairness” on the economic scale and providing funding to fix social ills that are really outside the bounds of what government can control are more important than simply making sure that “peace, order and good government” is achieved.
It starts small and innocent. Just collecting information and holding it can’t harm anyone. Yeah and looking at history that is how every despot started. Just information, then gun registration, then demonizing one group or another, collecting guns, burning the seats of representative government, then taking certain groups to camps. Does anyone think I am talking about Hitler, well I was but Roosevelt fits most of the above and he would have been a dictator had his health been better. Socialism is the first step toward dictatorship and collecting the wealth from those who earned it to buy votes from those who benefit, is way down the line toward dictatorship. Us old guys remember what caused all the problems in our youth and Socialism was the rage with presidents from Wilson to the present. Be afraid—be very afraid.
@Neill, good old Charlie Rangel is also the chief architect of the ‘exit tax’. If you cut him open you would find that he is composed of nothing except spite and hypocrisy. He is an ass.
Canada has always had aspects of “socialism” in its government in the form of “the good of the many outweigh the needs of the few/one” and I don’t think necessarily it leads to totalitarianism or even to dictatorship, but it’s – as you point out – a slow creep that bears carefully watching and continual evaluation.
The trouble with our governments (and I think this is largely true in most first world nations) is that those who govern do not share the same world view or reality experiences of those they govern.
Take the rally of “it’s all about the middle class”. The middle class in its true form is not something people like Justin Trudeau or Stephen Harper know much about because they have either never lived it or escaped it so long ago that the plight of those who basically live from paycheck to paycheck and utilize credit cards and lines of credit to exist are foreign to them. They don’t know what we think, feel or really what’s most important to us.
Government (and the people in it) so quickly become cocooned in the mindset and pov of government that they come to believe that this is how citizens look at the world too.
Although, on the disturbing flipside, they do recognize that consumption and the facilitation of consumption is an effective means of controlling populations and coercing/bribing them.
Awk, I am veering off-topic.
Any agency or set of rules designed to thwart the rights of citizens to have personal information that they share with the govt or not is usually perverted into a tool to subjugate citizens in some way to the will of the government for reasons that really don’t bear up under close scrutiny.
@Neill…
Nothing like a reformed “real Tax Cheat”, to turn vengeance on everyone else. I would have had more sympathy for his Dominican Villa problem, if he didn’t immediately jump on the FATCA train to “get” everyone else.
@Calgary…
Another naive “Expert” “I just don’t see Canada on their radar screens.”
That is what the Experts thought about FATCA…
I would not trust them one iota, but this guy is like the FATCA Compliance Complex, a co-facilitator of the U.S. propaganda. No need to look behind the curtain. Just trust us.
@Yodagirl,… Well said…
This is the problem with surveillance societies – eventually everything is suspect and everything is deemed the government’s business and right to know.
And once your government, or someone else’s, has your information, they will invariably begin to think up ways to use it to the advantage of government.
Just saw this comment in an email… Time to pull out the jokes..
It looks like the KGB and the STASI changed their location and moved to the US !
We can go back to the old jokes about the Soviet Union (and apply them for the USA ) such as : “you’re not watching television, she watches you”, etc….
@ Just Me
Yodagirl? Actually she writes with the wisdom of Yoda so it was a good slip of the typing fingers you made there. 🙂 I’m hoping Jon Stewart’s writers are rummaging through the dustbin of KGB/STASI jokes right now and getting ready to recycle them with an American twist.
FYI – The NSA scandal is raising a lot of attention in Europe and there is an insightful post from a commentor pseudonymed Sabati –> http://discussion.theguardian.com/comment-permalink/28319690
I just happened to catch the Whitehouse press briefing today on CNN. Withing Jay Carney’s mind-numbing blah, blah, blah was the statement that the US spies on its friends for their friend’s own good.
Do we “trust them on their blue eyes” as Sophie In’t Veld asks? HELL NO!
bubblebustin, you know what they say about “friends” like that.