Elizabeth May and the Green Party of Canada have spoken out against the recently announced FATCA IGA between Canada and the US. On Monday, Ms. May raised the issue of Charter rights in Question Period. From Open Parliament, here is her exchange with Finance Minister Jim Flaherty:
Elizabeth May Saanich—Gulf Islands, BC
Mr. Speaker, I rise to ask a question today of the Minister of Finance relating to the Foreign Account Tax Compliance Act, FATCA.
On the U.S. side of the border, there are concerns raised that because the treaties have not been ratified through the U.S. Senate, these may not be legally binding treaties in any case; and on the Canadian side of the border, no less a legal expert than Peter Hogg, former dean of Osgoode Hall Law School, has written the advice that this very likely will violate section 15 of the Charter by treating some Canadians differently from others.
More than 30 years ago, I learned constitutional law in a textbook he wrote.
What will the minister say to its constitutionality?
Jim Flaherty Minister of Finance
Mr. Speaker, I was taught by Peter Hogg as well. I got an A in the tax course.
The question is an important one. It is important for about a million Canadians who also happen to be citizens of the United States.
The Americans initially proposed that there would be a 30% withholding tax and there would be direct reporting by Canadian banks to the IRS. We got rid of that. They have agreed that we will use our existing framework under the Canada-U.S. tax treaty, which has been successful.
No new taxes will be imposed. The CRA will not assist the IRS in collecting U.S. taxes.
This was followed-up by a statement on the Green Party web site today:
OTTAWA – The Green Party of Canada is calling for greater public and parliamentary scrutiny of a recently announced tax agreement between Canada and the United States, stating that it threatens the rights of Canadians and may even violate the Constitution.
On February 5th, Finance Minister Jim Flaherty announced that the United States and Canada had signed an intergovernmental agreement to implement the Foreign Account Tax Compliance Act (FATCA). This U.S. law requires all foreign financial institutions to report the personal financial information of ‘U.S. persons’ living abroad to the U.S. Internal Revenue Service (IRS).
“Although it contains certain exemptions, the agreement negotiated by Minister Flaherty fails to address the most significant threats that FATCA poses to Canadian privacy and human rights,” said Elizabeth May, Member of Parliament for Saanich-Gulf Islands and Leader of the Green Party of Canada. “This agreement also ignores the fact that Canada already has a robust information-sharing regime with the United States, and that Canada stands to gain virtually nothing from it.”
Under FATCA, Canadian banks will be required to search all Canadian financial accounts for the account records of U.S. persons and to report the findings to the Canada Revenue Agency, who will then provide the information to the IRS. In addition to being a significant privacy concern, this would likely be a violation of Section 15 of the Canadian Charter of Rights and Freedoms, which forbids discrimination based on “national or ethnic origin.”
Minister Flaherty and U.S. officials have set a March 10 deadline for public comments on the agreement, after which point the government will bring forward legislation to bring FATCA into effect. Said May: “This deadline should be extended to provide greater opportunities for the public to offer comments on the proposal – There is no reason why public input needs to be rushed on this issue.”
In Question Period Monday, May challenged the constitutionality of the provisions, as they violate s 15 of the Charter, the section that guarantees that all Canadians are equal under our laws. She cited the advice of distinguished Constitutional law professor, Peter Hogg, former Dean of Osgoode Hall Law School who has advised the Conservative administration that the FATCA is not likely to survive a Charter Challenge.
There are an estimated 1 million Canadians with U.S. citizenship or legal status who will be directly affected by this legislation; hundreds of thousands of their family members, employers, and business partners are likely to be affected as well.
Meanwhile, Olesia Plokhii at iPolitics (pay-walled) also covered the story today: