14 thoughts on “Is this still true — safe haven?”

1. Nice to know that there might be a safe haven for some.

2. Do they have >$175 Million in assets? If they do, it appears from me form very cursory read of the IGA summaries that they do, but I could be wrong. That is where I would check..

3. Yes, but I need to INVEST for my future. I believe they just pass you on to another brokerage firm which is no safe haven at all. A simple savings account just doesn’t cut it.

4. Last I heard, Alterna Savings deals with QTrade for all investments other than savings-account TFSAs and Alterna’s term deposit certificates. If you check QTrade’s website new account applications, I think you’ll find they are asking if you’re a US citizen as part of the application. QTrade has had a “qualifying agreement” with IRS for about ten years I think, so if you’re a US person they’re no haven for you. I doubt many Alterna depositors have chequing or savings accounts in excess of $50,000 and for now and for a few years yet, I don’t think anyone’s TFSA can be over $50,000 even if maxed out. But you aren’t going to retire on a TFSA under $50K for very long.

   The crunch may be what happens to credit unions, which I believe are governed under provincial not federal jurisdiction. Ontario hasn’t signed an IGA, and I don’t know whether or how the feds can force provincially-regulated institutions to comply, especially credit unions which under at least Ontario charter can’t even have assets in the US AFAIK. We’ll have to see how this plays out.

   Expect to see a very large queue for CLN appointments forming at all US consulates in Canada over the next few days … And if I were Harper and Flaherty, I wouldn’t be so cozy about their prospects in the next election.

5. Safe havens? When you start talking in those terms aren’t you confirming all the worst suspicions that the USG is using to push this false narrative about expats in the first place?

   If you hold USCship, they own you. If you are talking about your non-USC spouse that might be a different matter. My access to my husband’s income still doesn’t make it my earned income regardless of Uncle Sam’s wet dreams about it.

   But it seems to me that one should be a bit careful about talking safe havens while still a slave. Just my opinion.

6. Thanks Schubert. That’s exactly what I was told, but I couldn’t remember their name. I’m more intrigued by the IBS discussions about self certification of relinquishment of US citizenship. If that’s a go, we’re mostly free and clear of this crap.

7. I thought it was the U.S. citizen who had to worry and if the Canadian government signs an agreement to abide by FATCA and FBAR, any financial institution they regulate is required to be an agent of the IRS and report the citizen to the IRS. I may understand it wrong but that’s how I read it.
   WE here in the “prison” they call the USA, want all Federal Tax laws repealed and the FairTax passed. Citizen based taxation is a killer for any exports that need sales or engineering services.Our government is either the most inept in history or the most efficient at its destruction. Either is bad.

8. FairTax is a misnomer. It still is taxation without representation (whereupon the IRS and the US Government would want everyone to pay into including expats) which is what many Brockers despise and why they are renouncing in droves.

9. Fairtax is fair only for those who are resident in the Excited States of Amnesia – those who are using the systems and other benefits that they are paying for. It is “not FairTax” for those of us living outside of the United States who get absolutely no benefit from the US infrastructure.

10. No, Wilton, the banks will be giving certain account information to the CRA, which is the Canadian IRS in a manner of speaking and the CRA will give it to the IRS when the IRS gives the CRA certain banking information on Canadian citizens living in the US.

    It is strictly information sharing and the CRA will not be collecting on behalf of the IRS nor will Canadian banks. That will still not be legal here. And this has nothing to do with FBAR, which is not a tax form nor an IRS form but a State Department form.

    In fact, FATCA is not a tax form or a tax. It is data collection. Kind of like what the NSA does only everyone will know about it and it’s “legal”.

    I am sorry you feel caged. We here in Canada feel like fugitive slaves. I am not certain if the pain is the same. I do know that Sir John A didn’t bow down to the Fugitive Slave Act but Stephen Harper did bend over for FATCA.

11. Just saw this recently. Don’t know much about it, but I look at everything through a FATCA CBT lens now.

    Perhaps readers could look at this and see if they think it poses a problem to the potential of a ‘safe haven’ for accounts with some credit unions who take up Flaherty’s offer (see below).

    Worth questioning if anything would be different re FATCA provisions and credit unions if some take this option being offered by the Federal government, which seems to open them up to “expansion as a federally regulated financial institution…” . See below:

    “….Currently, credit unions are regulated exclusively by the provinces. Nonetheless, some credit unions have expressed an interest in growing beyond their provincial borders. Expansion as a federally regulated financial institution would allow consumers to benefit from greater choice and more innovative products.

    To enable credit unions to incorporate and continue federally, on December 19, 2012, the Government of Canada implemented a legislative framework. The legislative model is based on the framework applicable to banks, weaving in unique cooperative elements for federal credit unions. Legislative amendments reflect internationally recognized cooperative principles for credit unions, including: each member has one vote; services are primarily for members; and membership is open while bonds of association2 are permitted.

    A number of credit unions have expressed interest in the federal framework. However, they also identified challenges in moving from provincial regulation to federal standards, stemming from differences in federal and provincial deposit insurance coverage, as well as insurance networking rules….”
    http://www.fin.gc.ca/n14/data/14-010_2-eng.asp

    http://www.newswire.ca/en/story/1294937/national-credit-union-association-welcomes-temporary-transitional-support-measures-under-the-federal-credit-union-framework

12. I am not familiar with Canadian law, but regarding credit unions chartered and regulated by a province, would that province be even allowed to sign an IGA with a foreign government?

    Here in the US for example international relations can only be done by the Federal government. A state could not enter in an agreement with a foreign government.

13. For anyone in Ontario, who is in the creative arts of any type, there is this credit union which is quite small. I plan to open accounts here asap:

    http://www.creativeartscu.com/index.cfm?page=home

    From what I can ascertain, they only have about $5Mill in assets, so there is quite a bit of room before it gets to the requisite $175Mill

14. @JB, regarding jurisdiction (provincial vs. federal) over credit unions in Canada: I found a sample explanation (though it is a bit dated) that seems to imply that the division of powers is not completely clear cut in all areas in terms of treaties, and using the example of NAFTA, discusses the relative powers of the provinces and the federal government regarding international treaties and jurisdiction: http://publications.gc.ca/Collection-R/LoPBdP/BP/bp324-e.htm

    BP-324E
    NAFTA: IMPLEMENTATION AND THE
    PARTICIPATION OF THE PROVINCES
    Prepared by:
    Daniel Dupras
    Law and Government Division
    January 1993

    I posted that Finance Canada notice about the offer being made from Flaherty – to assist Canadian credit unions to expand – and opt to be regulated federally rather than provincially http://www.fin.gc.ca/n14/14-010-eng.asp , because I was concerned that opting to expand and be federally regulated would leave the credit union and their members even more at risk from FATCA. If they expanded, and were able to attract more members outside their home province, it would increase their holdings, and if they consolidated to amalgamate several other smaller credit unions, and thus their total holdings grew even further, they could exceed the threshold to be considered a ‘small’ credit union under the slightly (?) less onerous terms of the FATCA IGA? It sounded as if being federally regulated – and growing larger might make them subjected to more stringent rules similar to the banks.

    Also, being provincially regulated (and staying so) perhaps means that the provinces like Ontario would retain a greater stake, interest and jurisdiction in relation to the federal government about at least some aspects of the treatment of credit unions and their members under FATCA or under any future extraterritorial US demands (which seem to me we should anticipate) than they would if the credit union opted to become a federally regulated entity. For example; “….In Ontario, credit unions are regulated through a comprehensive framework that involves the provincial Ministry of Finance, the Financial Services Commission of Ontario (FSCO) and the DICO. FSCO regulates registration of credit unions and caisses populaires under the Credit Unions and Caisses Populaires Act 1994. FSCO is responsible for ensuring that credit unions operate in accordance with the requirements of that Act….” http://www.central1.com/about-us/credit-union-system

    Just my initial thoughts. This is not an area I know anything particular about. But, being provincially regulated, I am wondering if the provinces gave their tacit blessing to a FATCA IGA behind the scenes, and so did not make any fuss regarding their provincial powers over credit unions. Or perhaps they don’t understand FATCA either – and did not anticipate what it would mean for this area of provincial regulation.

    Another provincial issue that FATCA impacts is the fight that could be an important election issue in Ontario http://www.carp.ca/category/advocacy/campaigns/cpp-time-to-act/ http://rabble.ca/blogs/bloggers/roger-annis/2014/02/ontario-seeking-to-upstage-federal-government-on-pensions-provinc – which centers on the creation of a made-in-Ontario supplement to CPP – which would be a much better thing than Flaherty’s favoured PRPPs, because even just under US CBT, PRPPs are IRS reportable AND ‘taxable foreign trusts’, but probably an Ontario provincial public retirement pension plan would be protected from US extraterritorial taxation similar to the treaty treatment of CPP – which PRPPs would likely not be (even RRSPs and RRIFs are not US tax exempt unless annual treaty election and 8891s filed for every single registered retirement account (this is not advice, but merely cited here for additional history of the punitive and tortured background of the IRS treatment of RRSPs, see: http://taxblawg.files.wordpress.com/2013/02/sheppard_intertaxjrnl_2-4-13.pdf ‘IRS Introduces Two Unique
    Remedies for U.S. Persons with Unreported Canadian Retirement
    Plans and Accounts’ By Hale E. Sheppard, Esq., 39(1) International Tax Journal 11-20 (2013).).

    One Credit union at least, is owned directly by the province of Alberta.
    http://en.wikipedia.org/wiki/ATB_Financial “Alberta Treasury Branches, doing business as ATB Financial,[2] is a financial institution and crown corporation owned by the Province of Alberta. ATB operates in Alberta only, providing financial services to 680,000 Albertans and Alberta-based businesses. ATB has 167 branches and 130 agencies, serving a total of 242 communities in Alberta. Wealth management services are offered under the name ATB Investor Services or ATBIS. ATB has more than 5,300 employees.

    Headquartered in Edmonton, Alberta, Canada, with total assets of C$32.0 billion, ATB is the largest Alberta-based financial institution.

    ATB is not a chartered bank, and unlike all banks operating in Canada, ATB is regulated entirely by the Government of Alberta, under the authority of the Alberta Treasury Branches Act, Chapter A-37.9, 1997, and Treasury Branches Regulation 187/97…..” http://en.wikipedia.org/wiki/ATB_Financial

    So, how can FATCA rule over ATB when it is “is a financial institution and crown corporation owned by the Province of Alberta” ? How can the Ministry of Finance force a CROWN corporation owned by a province to comply with an extraterritorial US law like FATCA? At one time there was some talk that FATCA would not apply to FIs which were owned directly by a government body. I don’t know if that is the case under the current FATCA IGA, but this is what I remember reading: “…17. Are any foreign financial institutions exempt from
    FATCA withholding on their income?
    Yes. Certain foreign financial institutions are exempt from FATCA withholding. The Statute provides that a withholding agent does not need to perform FATCA withholding on payments where the
    beneficial owner is:
    •
    Any foreign government, any political subdivision of a foreign government, or any wholly owned
    agency or instrumentality of any one or more of the foregoing;
    •
    Any international organization or any wholly owned agency or instrumentality thereof;
    •
    Any foreign central bank of issue; or
    •
    Any other class of persons identified by the Secretary for purposes of this subsection as posing a
    low risk of tax evasion….”
    from: http://www.pwc.com.au/industry/banking-capital-markets/assets/FATCA-FAQs-Jul11.pdf.

    I don’t know if that is reflected in the IGA Canada just signed, but it might be worth looking into.