Today’s Toronto Star Commentary Section has our good friend, Jim Jatras, commenting on the situation in Canada:
“Canadian visitors to Washington sometimes wonder why their embassy stands at the foot of Capitol Hill.
The answer? To be close to where Canada’s laws are made.”
Case in point: on Feb. 5 Jim Flaherty’s Finance Ministry announced a so-called “intergovernmental agreement” to enforce FATCA, the U.S. Foreign Account Tax Compliance Act, in Canada.
Supposedly aimed at American tax cheats, FATCA was enacted in 2010 and is set to go into effect on July 1, 2014. But instead of singling out suspected tax evaders, FATCA creates an NSA-style information dragnet requiring every non-U.S. financial institution in the world (including banks, credit unions, and insurance companies) to report data on all specified U.S. accounts to the Internal Revenue Service (IRS).
How can foreign (including Canadian) institutions outside U.S. jurisdiction be forced to comply? Simple: economic sanctions. A Canadian bank deemed “recalcitrant” would be subjected to 30-per-cent “withholding” from all U.S.-sourced payments. Given America’s weight in global finance, the risk of such extrajudicial reprisal has terrified banks and governments worldwide.
Still, even FATCA’s advocates concede that direct enforcement is “wholly unachievable” due to privacy protection laws in many countries that don’t allow personal data to be sent to unauthorized recipients. Thus, the Feb. 5 agreement not only permits Canadian institutions to comply with FATCA despite privacy laws, but will require them to collect the information demanded and report it to the Canada Revenue Agency for transfer to the IRS.
The Harper government’s defence of turning the CRA and Canadian banks into agents of the U.S. government runs as follows:
The government and Canadian banks tried lobbying the Americans against FATCA, but that didn’t work. Threatened with 30-per-cent withholding sanctions, we negotiated the best deal obtainable to protect personal privacy, minimize costs and receive reciprocal reporting from the U.S.
The problem is, no part of this excuse is true:
Lobbying: By their own admission, the government’s and the Canadian Bankers Association’s “lobbying” consisted of a few meetings with U.S. officials and submitting a couple of commentaries to American newspapers, which rejected them. Nothing was undertaken remotely comparable to Ottawa’s saturation “GoWithCanada.ca” campaign touting the importance of Canadian energy.
Negotiating the best deal: The Canadian agreement replicates a uniform template finalized in all essentials in July 2012. Ottawa “negotiated” nothing but some minor exemptions that can be revoked by the U.S. at will. Even small concessions were vetoed, such as Canadian credit unions’ request to exempt institutions with assets under $1 billion, not the $175-million cut-off the U.S. Treasury Department deigns to allow for other countries.
Privacy: The primary purpose of the agreement is to nullify protections under the Bank Act, the Personal Information Protection and Electronics Documents Act (PIPEDA), the Canadian Human Rights Code, and especially the Charter of Rights and Freedoms. The people affected are not just resident Americans but at least a million Canadian citizens. Claims that Canadians’ personal data would not be forwarded to the NSA and other intelligence agencies are laughable.
Costs: “Experts” reportedly estimate that FATCA could cost Canada $200 million. But the Bank of Nova Scotia already has spent $100 million; the Big Five banks alone will spend at least $500 million. Canadian consumers will pour billions of dollars into the pockets of consulting, law, accounting and software firms.
Reciprocity: Ottawa already receives information on Canadian residents’ interest from U.S. banks. Information equivalent to what Canada must report to the U.S. would require new legislation from Congress — which powerful members of the Republican-controlled House of Representatives already have ruled out.
Canada’s capitulation to this expensive, invasive and anti-sovereign demand is unnecessary. Canada has many tools to resist FATCA, from World Trade Organization and legal challenges to reciprocal, dollar-for-dollar withholding of payments to U.S. institutions. A “no” from Canada could itself doom FATCA in light of growing U.S. domestic opposition. A FATCA repeal bill has been introduced by Senator Rand Paul, a leading 2016 presidential prospect. The Republican Party, which recently approved a resolution advocating FATCA repeal, will continue to control the House and likely will capture the Senate this year.
To their credit, New Democrats Tom Mulcair and Murray Rankin, Liberals Ted Hsu and Scott Brison, and Green Party leader Elizabeth May have challenged the Harper government on FATCA. Conservatives have done all Canadians a disservice by finalizing the agreement in secret. The least they can do now is to give it a full airing in Parliament, followed by lifting party discipline to allow Conservative MPs to help vote it down.
James George Jatras is a former U.S. diplomat and U.S. Senate staffer. Now a Washington-based government and media relations specialist, he edits RepealFATCA.com.
I wanted to comment on this but apparently you have to sign up for digitel subscription I did send it on to the Cdn politicians and friends and put on my FB page
Mr. Jatras “joke” about the Canadian embassy is so sad. My government, Canada, has put up the surrender flag. In 1812 we beat the Yanks. In 1969 Canada was not a wuss.
It seems this is all done for the almighty dollar and it is not our dollar but for the PC elite.
@ northernstar
I just signed up at The Star today but I didn’t realize I was signing up for a digital subscription. Oops. Hope I can unsubscribe later. Anyway it was so good to read such a sensible article after reading too many idiotic comments at Politico.
@ James Jatras
I hope you will post this article at repealfatca.com eventually too. Thank you for taking on this FATCA monster by word and by deed. I wish our Canadian gov’t hadn’t gone all wobbly in the knees but we will still fight on.
What kills me there is no response from the poli crats on t he emails I sent, on mr Jatras article and others. . Nothing!
@ northernstar
Before the IGA I got sporadic replies to my MP e-mails but since Feb. 5th the best I’ve gotten is an auto reply. It is disheartening. I don’t know which is worse — being blindsided by the USA or being betrayed by Canada.
@Em
Being betrayed by Canada is much worse, I never for one moment considered myself an American. My birth certificate was always a curiosity, now its a curse.
Em @ Disgusted
Finding out about FATCA and that it affects those with long-ago, long-expired green cards was a huge shock but I have to agree with you that when THE Canadian gov’t (it’s hard to say MY Canadian gov’t anymore) capitulated to the USA and signed the IGA, THAT was the unkindest cut of all. The IGA appears with some ambiguity to give me some protection but that’s not enough. I want the USA and now Canada to reject and repeal and then offer all of us an apology for putting us through this anxiety.
Excellent article. It would be nice to be able to post it at Politico.
@James Jatras – Please travelling to London, indeed the British Parliament’s new lawmaking body is also visible from the House of Commons, the new US Embassy site across the Thames near Vauxhall.
British MPs want to be able to see their new ‘bosses’ just out the window as well! The British Parliament has been relegated down the equivalent of a US State, no better than Kansas or Iowa.
As the joke goes about the 51st State (from the Yanks point of view). The UK has become number 52.
@all
I cried today on the phone with my son. I said I feel so awful that I am a criminal and a traitor in the eyes of the USA. I have been in Canada for over 4 decades and a Cdn citizen for 21 years. I did not take it lightly becoming a Canadian. It was a serious decision. I feel so betrayed by my Canadian government. They don’t answer my emails any more. I get only auto reply from Mulcair. I had a call for contributions to the NDP on sunday. I told the lady I would not be contributing until I find who votes how for FATCA. She was not familiar with FATCA.. Long story short. Her ex is an American and so are her kids. She now has FATCA in her family. How ironic. She was shocked.
Politico is so full of people who have envy of us. We have anger. . There is a difference.
@northernstar;
Don’t despair. You are in good company here. I admire all your efforts, and your determination. Hang in there.
It is a deliberate tactic to disarm truthful and legitimate criticism by trying to discredit us as messengers of the truth that the US does not want to hear. It is the US that is the traitor – to its own self-professed ideals, and by acting in a bullying, extortionate and needlessly harmful manner towards the rest of the globe and particularly towards all those it claims as sons and daughters, and citizens. So ironic that a country that professes to believe in government ‘of the people, by the people, for the people’ is now really a country that believes that people are to be harvested by any means, for the government, by the government. The US has by its continued deliberate and willful actions and speech cast us as outliers. And the more light is shed on the fallout of the FATCA and CBT situation, the more obvious it is that they have chosen to continue in the folly – no matter the cost to many many ‘benign actors’.
Good for you – I am certain that you’re not the only one who told the Federal NDP fundraisers that – especially back when the party leader hadn’t released any position on it and stonewalled FATCA related questions asked during ‘townhalls’. And it is good for them to know that is an election issue for us. Why is it that we are left as private citizens to fund a Charter opinion and challenge? Where are the other Canadians in political positions whose job it is to defend Canadian citizens and residents on Canadian soil?
It may be that this will come back to haunt the Harper party. I hope so.
@northernstar,
I like the phrase; “FATCA in the family”. Sounds like an inheritable and unwanted condition.
@badger
Thank you for your comforting words. You are so informed and also so considerate and inspiring.
Yes, that just came to me “FATCA in the family” it is a DIS EASE.
@northernstar – Don’t let Homelanders get you down. They travel on old broken down infrastructure, sub-standard public transport in many cities, pay to send their kids for ‘private’ schools because the public ones can’t teach, and they still buy into the ‘most powerful country in the world’ crap.
FATCA in some ways is a cancer. It must somehow be cut, poisoned, or burned out of ex-pat’s life. Cutting would be renunciation, poisoned raising public awareness abroad of this toxic issue, and burned getting the IGA ruled unconstitutional having a court throw it in a fire, and send it back to Parliament again.
Forget the Canadian Government, everyone must concentrate of poison and burn to stop FATCA’s advance, but most of all raise $$$$.
If there are 1M ‘US persons’ in Canada, and half gave a measly $5, you’d have a $2.5M war chest for the Charter Challenge and marketing.
In fact see if you can make it a charity, and let the Canadian Government give big donors a tax deduction so at least the Government subsidies the campaign against FATCA somewhat.
Further to correspondence below, I told Roger that I would send `A Letter to the Editor`. I have nothing to lose — my name is already out there!
My letter to the editor is now sent and I hope it will be published as a response to the James Jatras commentary. Thanks again, James!
@Don
FATCA is definitely like cancer in that not only does it infect the US person abroad, it infects their ‘foreign’ relatives as well.
I’m sorry for those who are feeling a loss of nationhood and representation, it’s been years since I felt that. When Canada became a petro-power in defiance of what we have long known to be the consequences, it sold out the land and everything connected to it – having done so, selling out the people who live on it was really just a punt. Now it’s best to focus on the tools the law provides.
I wanted to enter this but there is no way to sign up without paying.
We need to stand on guard for our Canada. All Canadians are affected by FATCA. This law is like a cancer. It affects the Canadians who are designated as American persons. This includes those not born in the USA but born to American born parents, green card holders – past and present, and some snowbirds and all their families. Just like Cancer can cause pain and financial hardship so can FATCA. All Canadians will be paying for its implementation and also giving up their privacy. I urge all Canadians to call or contact their MPs. There is still time. Parliament is accepting submissions up to March 11th, 2014. It is not a done deal. Keep in mind that most countries in the world have NOT signed this immoral IGA. Please go to the government site to submit your reason why FATCA should not be iimplemented. http://www.fin.gc.ca/treaties-conventions/notices/fatca-eng.asp
Who owns the rights to reprint this article in other papers?
We have ask Jatras.
I just talked to him thanks
@ Calgary411
The comment section of The Star works a bit wonky. I think it has a word limit and I had trouble doing a copy&paste too. Last night I tried 2 times to post a comment — didn’t appear until this morning and then TWICE! I would really like to see your excellent comment posted so here’s hoping it gets into the Letters To The Editor section and QUICKLY, while there’s still a warm glow of sanity from Jim’s opinion piece. Good luck!
@ northernstar
Your comment is too good to not be there. Would you like me to try to post it with a statement something like: “From a Northern Star to the Toronto Star: “…..” I believe the submission date is March 10th so may I change that?
President Obama believes in “the principle that a sovereign people, an independent people, are able to make their own decisions about their own lives,”
“So we stand on the side of history that, I think, more and more people around the world deeply believe in, the principle that a sovereign people, an independent people, are able to make their own decisions about their own lives,” he added. “And, you know, Mr. Putin can throw a lot of words out there, but the facts on the ground indicate that right now he is not abiding by that principle.”
“I think everybody recognizes that, although that Russia has legitimate interests in what happens in a neighboring state, that does not give it the right to use force as a means of exerting influence inside of that state,” Obama said.
http://www.nbcnews.com/storyline/ukraine-crisis/obama-strong-belief-russia-violating-international-law-n44091
Now I understand, FATCA’s imposition on Canadian citizens is different from what Russia is doing in overpowering Ukraine’s sovereignty!
@ always something
The trouble with Russia is that it didn’t think BIG enough. It should have been overpowering every nation’s sovereignty like the USSA is doing with FATCA. This is the USSA led era of the BIG lie, the BIG bailout, the BIG canard of “might makes right” and the BIG hypocrisy. The Ukrainian coup was financed and finagled by U.S. operatives (with the ever “helpful” Israel factor) — another one its special colour “revolutions”. Russia knows that and I think this may be where Russia draws a red line in the sand. The Russian bear does not like that the West is encircling its lair with offensive weapons.
I have forwarded to the Calgary Herald and the Calgary FastForward to see if they have any interest. I hope James OK`s that!
I`ve also just printed the article (and the CARP letter) for a letter to Myron Thompson, former Alberta MP. Also mention of the fundraiser.
@Em says
I’m sorry, I was being sarcastic. Sometimes pointing out the obvious hypocrisy helps emotionally, especially when among friends, but I realize does little to further awareness. We did send a donation to Charter Challenge, and following letter to Flaherty. Will post what happens in Calgary Consulate later this month.
@All–Thank you for your tireless resourcefulness in spreading the message of the deadly cancer of FATCA.
Submitted with signature:
Dear Minister Flaherty:
As folk wisdom states, ‘to understand a person, one must walk in their shoes.’ With Canada’s recent signing of the sovereignty-crushing IGA for FATCA legislation, I have been catapulted into the shoes of a ‘minority’. Because of FATCA, I have become a quick-study on the meaning of ‘minority’, which until now was an alien world to me.
Since we recently learned of CBT by the USA and the impact it will have on our life, we have felt the full force of being ignored by our government representatives. We have been vilified by the media as ‘tax cheats’- (what a comical description when i think of the thousands we dutifully sent to CRA). Some of those who hear our plight are astonished, dismayed, but in the end say, ‘well, we hope it will be resolved for you soon.’ Some pity us, others feel uncomfortable in our presence in case they catch what we have.
My Ukrainian father was a prisoner-of-war in Germany in WWII and was fortunate to immigrate after the war to South America and then to Canada in 1957. He felt to be the luckiest man alive to immigrate to a country that had a Charter of Rights and Freedoms to protect his human worth.
However, today, that Charter is meaningless to the Conservative government. By signing the IGA to implement FATCA, our Charter protection and privacy laws were flagrantly crushed. The most personal of information will be scoured from records, forwarded to the CRA, and then the IRS. In my senior years, because my Canadian citizen spouse has a USA birthplace, our peaceful life is about to be destroyed by FATCA. Our modest savings for our retirement while paying Canada’s high tax rates in our working years, will be plundered by the USA citizen-based tax law that CRA will enforce.
This is the ‘collateral damage’ you have caused by trampling Canadian citizens’ human rights. Personally, both the quality of our life and our living standard will be impacted beyond recognition. If the IGA is ratified, it is no exaggeration that living on Canada’s social assistance program will be the experience of many in the next few years. We are not in a financial position to hire cross-border accountants and lawyers to comply with US tax laws imposed on us in Canada, until our death.
Please advise how we are to live without a bank account. When our bank accounts are closed, how are we to convert our small pension to usable currency to live and pay our bills? Since you were the architect engaged to construct the IGA, I am confident you will have the answer to my question.
Looking forward to your reply.
Respectfully submitted,