Blaze and I have sought advice on how best to proceed with a legal challenge to Canada’s proposed IGA legislation to implement FATCA.
The advice received from legal people we consulted is that the first step should be to obtain a “warts and all legal opinion” on the merits of a challenge and that Joe Arvay, given his expertise and credibility, is the one to do this.
Please provide your comments and suggestions to this proposal, originally posted on Sandbox:
http://maplesandbox.ca/2014/possible-charter-challenge-legal-opinion-needed-and-funds/
“As most of you know, the possibility of a challenge under the Canadian Charter of Rights and Freedoms has been discussed for some time.
With the signing of the IGA and proposed legislation to override existing Canadian laws, we need to determine our next steps.
http://www.fin.gc.ca/treaties-conventions/pdf/FATCA-eng.pdf
http://www.fin.gc.ca/drleg-apl/2014/can-us-eu-0214l-eng.asp
Prominent Canadian constitutional lawyer Joseph Arvay has reviewed the IGA and the proposed legislation. He has recommended as the first step a formal legal opinion to advise if a challenge would have a reasonable possibility of success. In his letter to me (real name and address removed)
http://maplesandbox.ca/wp-content/uploads/2014/02/Mr-Arvay-Opinion-Letter.pdf
Mr. Arvay said
“You have asked for our opinion as to whether or not a challenge to any proposed legislation would have a reasonable prospect of success. Our initial review of the proposed legislation indicates that there may be a serious question as to whether it would withstand constitutional scrutiny once enacted. We question whether the proposed legislation is compliant with the Charter of Rights and Freedoms or whether it violates protections under the Charter against discrimination based on national origin or citizenship, against unreasonable search and seizure and against deprivation of liberty except in accordance with the principles of fundamental justice. We also question whether the proposed legislation falls validly under the federal jurisdiction over taxation, or whether it is in substance regulation of financial institutions in which case federal jurisdiction is limited to regulating banks but not provincially regulated financial institutions such as credit unions.”
IRSCompliantForever and I have communicated with four other lawyers. They all agree a legal opinion should be our next step before proceeding further.
Mr. Arvay’s letter also says
In order to answer those questions, a proper opinion needs to be prepared. We are prepared to prepare this opinion for a fee of $15,000 plus applicable taxes.
So, the cost for this legal opinion would be $15,000 plus tax, which would bring the cost for the opinion to around $17,000. To many, that cost for an opinion probably seems steep.
However, the four lawyers agree that this is a very reasonable cost and is far below what they would expect we would pay for a formal legal opinion.
To put the costs in perspective, we would need one contributor at $17,000 or 17 contributors at $1,000 each or 34 contributors at $500 each or 100 contributors at $170 each or 170 contributors at $100 each or a combination of those or other amounts. (Due to the administration, we would request donations of a minimum of $100 each.)
We should aim to raise more than that amount for contingency and administrative purposes.
There is agreement among those that we have contacted–including with a senior legal expert–that Mr. Arvay would be an excellent choice for a Charter challenge.
The next step is to decide a) Do people want to proceed with this? b) Do people want to retain Joe Arvay for a legal opinion? c) Are people willing and able to contribute to the costs?
Many individuals have asked if Canadian Civil Liberties Association could assist with the case. Abby Deshman has advised each case must go through an individual approval process. When CCLA becomes involved:
The general mode of operation is as an intervener, requesting the court add CCLA to the ongoing case as a friend of the court. Normally, the case is already going forward with the parties independently represented. As a non-profit, we unfortunately do not finance others’ legal cases, and in general are not in a position to represent individuals in launching legal actions.
Ms. Deshman, however, has advised it is possible CCLA might be able to provide some assistance with legal research.
Please advise if a) You agree we should seek this legal opinion b) if you would be able to contribute (we will request a minimum donation of $100).
Someone is researching ways we might raise and administer the funds if people do want to proceed and are able to contribute.
If the case proceeds beyond the legal opinion though the courts, the costs will, of course, increase greatly. We are not able to say exactly what the costs would be, but we expect they could be $100,000 to $250,000 or more.
You should note that after we receive a legal opinion, we will not be able to publicly share the details of the content or post it on line. This is for strategic reasons and to ensure confidentiality of the position the case may take before the courts.”
@ AnonAnon
Ever heard of a game called dominoes” 😉
I say YES both to A (get a legal opinion) and B (I will contribute).
I agree that this should be done soon before the CRA and FFIs get too bogged down in systems and reporting.
The idea of crowd-donating is something I (tech-not-too-savvy) wouldn’t have thought of but, hey, if someone knows how to work on this, all the better.
Perhaps not for the initial legal opinion, but if a constitutional challenge is to go forward, there should be a really strong push for support internationally (publlicized via American’s Abroad, Democrats/Republicans Abroad and other expat organizations, FATCA Daily, some on-line news agencies, etc). This could be seen as a watershed movement for other countries who have signed IGAs (as well as those who have not), and Canada probably has the largest number of US expats of any one country to draw upon.
Canada’s DA (and probably RA) has a well-developed list of US-citizen contacts; there could be telephoning-chains set-up after we get a legal opinion and decide we are moving to a court-challenge stage. At that point, larger media possibly could be approached.
We all know other US expats (or past expats) in Canada (and maybe elsewhere) that we could inform even at this initial stage. These folks may want to keep their US citizenship or maybe they want to renounce/relinquish (or maybe they have already done so) but still be totally disgusted by the whole idea of FATCA-invasion and would want to contribute.
Certainly, once a decision is made to go ahead, it could be mentioned at the various local meetings. We could even ask Elizabeth May to help – – what kind of legal resources might she and her party be willing to provide? Are there any other MPs (or MPPs) who are going to be directly effected (and affected)? The Citizen-Taxpayer Federation or other related organizations that could be approached for support? Can we get CARP Advocacy to understand this issue more fully?
And what banking and insurance privacy ombudsmen out there can we connect with? Who knows, we may even get the US Banking Assn to support this – – they, too, don’t want to deal with FATCA reporting reciprocity.
Just throwing out ideas as they come to me; I’m sure others have ideas of other groups/organizations too when the time comes.
Let us all know loud and clear where and when and to whom we should make our donations. I’m all in despite the fact that I will be renouncing in about 2 months.
Too bad we probably cant get a charitable contribution number…………. 😉
I’m sure you could raise the $15,000, or close to it, just by promoting it on the website alone, since most people who visit this site are directly affected by it. But for raising money on a continual basis for a long legal challenge, it might be a good idea to organize the Isaac Brock Society as an offline non-profit organization if it isn’t already – with a postal mailing address for sending checks and contact person, etc.
I’m involved with the ’cause’ and non-profit fundraising space online, and I might be able to help raise money in the US and possibly Canada as well. Not huge amounts, but a little something here and there, and also help to raise awareness.
I would be willing to contribute $100 for starters. If the Canadian Charter of Rights and Freedoms does not protect those who are law-abiding, what value does it have?
I am not an “affected person” under FATCA, however I do believe, on behalf of all Canadian citizens of whatever national origin, that the IGA absolutely must be challenged under the Charter, on the grounds that it sets a horrible precedent for creating a second-class of Canadian citizenship for all naturalized Canadians, no matter their national origin and no matter whether they have or have not retained their birth citizenship. I am willing to donate a few hundred dollars toward the first $15,000 for the legal opinion, but would not likely be prepared or able to continue donations toward the actual court challenge (in which I couldn’t be a plaintiff as I wouldn’t be affected). Please keep us informed about where and how to donate toward the legal opinion, if and when a fund for that is established.
RE: publicity
I would be willing to run another ad in my local newspaper again but probably not the full $400 half page alert I did earlier. I’m just not sure how many FATCA afflicted people there are in this area and our paper probably only reaches 10,000 at most. I could use our brevity Brocker, Yoga Girl, and others to help me put together something short and punchy. And then we have all our Brock tweeties and those who do facebook networking. I think it has to be made known as far and as wide as possible that we are willing to take on the Canadian government for signing this IGA. It feels so good to anticipate actually doing something other than just e-mailing MPs.
I would be willing to donate 100.00 to the process as well. Money talks! We need to get moving on this.
Count me in.
I’m in for $100.
After the legal opinion is received, will it be possible to share the perceived strength of the case, or at least give *some* indication of where we stand, rather just a “thumbs up” or “thumbs down”?
FWIW, I’m willing to throw in some money for the opinion.
I am in.
Some will want to contribute anonymously for various reasons. That would make online donations not work so an address to mail funds would be needed where a money order could be sent.
Thanks so much everyone. We’re on a roll. Please keep it coming. I think we will get there.
GwEvil is working madly to find a way to set something up and administer the funds.
AnonAnon: You asked how a Charter challenge to the IGA legislation would help to defeat FATCA.
I’m not a lawyer and it’s complicated, but I will try to explain as best as I am able.
The banks are covered by federal laws on banking, privacy and human rights. The federal Human Rights Act prohibits discrimination based on national origin.
The Charter does not apply to banks or other organizations. It applies to government.
Two years ago, Joe Arvay advised if the banks violate the laws, we may have grounds for a lawsuit against the banks. If the government changes the laws to allow banks to comply with the parts of FATCA that violate Canadian law, we may have grounds for a Charter challenge against the government.
If you review the proposed Canadian legislation to enable FATCA (click on the link in the post), you will see:
Inconsistent laws — general rule
4. (1) Subject to subsection (2), in the event of any inconsistency between the provisions of this Act or the Agreement and the provisions of any other law (other than Part XVIII of the Income Tax Act), the provisions of this Act and the Agreement prevail to the extent of the inconsistency.
Inconsistent laws — exception
(2) In the event of any inconsistency between the provisions of the Agreement and the provisions of the Income Tax Conventions Interpretation Act, the provisions of that Act prevail to the extent of the inconsistency.
Four lawyers have advised this means that where there is a conflict between the new law to enable FATCA and existing Canadian laws, the new law will prevail. (with the exception of the Income Tax Conventions Interpretation Act).
So, that could protect banks from a lawsuit or complaint under any of the Canada`s laws. (Remember, Canadian Bankers Association lobbied hard for this so they can say they are following Canadian laws when they begin to FATCA us)
So, it`s possible our only hope may be through a challenge under the Charter of Rights and Freedoms. That is why we need to get a legal opinion regarding this.
Thank again everyone. Let`s keep the momentum going!
Tdott,
The legal people tell us that the legal opinion cannot be disclosed to the opposition (the Government of Canada), but we will run your question by Joe Arvay.
Blaze and I would only participate in a charter challenge if we were advised that we had a “good” chance of success.
Don’t know if this has been noted before but I thought IBS might be interested to know all the ccurrent members of the House of Commons who were born in the US:
Ablonczy, Diane Reform Party Calgary–Nose Hill, Alberta
Hyer, Bruce New Democratic Party Thunder Bay–Superior North, Ontario
Hsu, Ted Liberal Party of Canada Kingston and the Islands, Ontario
May, Elizabeth Green Party of Canada Saanich–Gulf Islands, British Columbia
Sullivan, Mike New Democratic Party York South–Weston, Ontario
Found this on the following website:
http://www.parl.gc.ca/ParlInfo/Compilations/Parliament/BornOutsideCanada.aspx?Menu=HOC-Bio&Country=aa323487-7fe8-4d78-9f44-7f451aef5d79&Show=MP&Current=True
There are no US born Senators.
Hi I am not a US citizen or dual but I will contribute the initial $100 towards the suit. I can come up with more money as necessary. I think that it is shocking what is happening and what I call the “USization” of Canada.
Yes, yes, and yes! I agree we should seek a legal opinion and I will contribute $100.00.
Thanks to everyone for all your hard work. ISB is truly an amazing source of information, and has helped clarify a very muddled world for this dual US/Canadian citizen.
Also, on another matter, there is a new FBAR form (FinCEN Form 114) and it is to be sent electronically to the Financial Crimes Enforcement Network in Vienna, Virginia. Nice, eh? Anyone else feel like a criminal yet?
Yes I would contribute.
I agree with SerfingUSA that a federally registered non-profit organization should be set up if it is not already the case. It’s actually not that complicated and would have the immense advantage of contributions being tax deductible at both the federal and provincial level. Also, such an organization can join the Canadahelps.org Website which makes online giving (even automatic monthly gifts) very easy to do.
I was wrong – – Mexico has the most US expats (510,000), Canada is #2 (310,000) and UK is 4th (190,000). Now if all 310,000 contributed even $10………
http://voxxi.com/2014/02/22/mexico-list-countries-us-expatriates/
Count me in for $200. A big thank you to Blaze and IRSCompliantForever for all of your efforts!!
Petit Suisse,
Thanks for agreeing to contribute!
Setting up a federally registered non-profit organization might be a little tricky at this early stage as it appears that you need at least an incorporator of the organization, a board of directors, an address of the registered office, and expertise in providing financial statements in a certain way etc. One website says that it can take 6 to 18 months to obtain charitable status so that you can issue tax deductible receipts. If we are wrong on this, please let us know.
http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs04970.html
Blaze and I are not sure that we have the expertise, skills, or knowledge for this. Are there people out there who have this expertise and who would be willing to help?
Just an important point to add to what IRSCompliant posted. It is my understanding that we would not qualify for charitable status to fund a Charter challenge even if we formalize an organization.
It is really important people who are contributing understand they will NOT receive a charitable receipt for income tax purposes.
If anyone has any other information about that possibility, please let us know.
It may still be a good idea to have a formal organization to administer funds, have an official spokesperson. make decisions, etc. I recall Hazy suggested that idea a few months ago, but many preferred to remain informal.
If people now prefer to move to a formal organization, we really need people with the expertise and abilities for that.
I will contribute at least the minimum.
Draw up a list of other ‘US persons’ who a celebs in Canada. Wasn’t the Premier of News Brunswick born in the States? How about Mayors, and other lower down the food chain politicians? CEOs of companies, and perhaps that ex-Canadian US Senator Cruz? Who knows he might give a $100.
Canadian born entertainers, bloggers, radio personalities, heck if this bunch of people can’t raise a lousy $17000, it’s a sin.
Is someone going to publish a Paypal, or bank account number along with the action committee’s details. I hate to mention this but everything must be kept transparent. It’s not to say anyone would do anything, but it will strengthen the case to max out on collections. I’m sure the law firm could help set up the necessary apparatus to get this going.
Don,
That is something to be looked into. Something like this: http://www.lawsociety.ab.ca/lawyers/trust_accounting/trust_accountingquesitons.aspx
Thank you for all your efforts in this regard! Count me in for $500 to start with….
Thanks everyone for your help. We’re getting closer. We still need to figure out how to administer it.
It’s my understanding from Joe Arvay that they cannot accept payment from several different people for Law Society regulation reasons of they need to know who their client is.
That is why it would have been good if we had a formal organization, but we don’t.
We plan to keep everything as transparent as possible without revealing the true identifies of anyone who participates unless they want us to do that. Again, we are checking into various possibilities.
Please keep the ideas coming and keep up the momentum for raising the funds. I really think we can do this.
If anyone would like to reach out to high profile people who may be caught up in this, please do so.