98 thoughts on “A Letter from John Weston Regarding the IGA – We Need to Educate the MP’s”

1. Today I came across this page: FATCA Intergovernmental Agreement (Thomson Reuters).

   Under Model 1: “Under this agreement, FFIs in partner jurisdictions will be able to report information on U.S. account holders directly to their national tax authorities, who in turn will report to the IRS.”

   Under Model 2: “Model 2 IGA was designed to address potential conflicts of national and local laws that would make it difficult, for Financial Institutions in some jurisdictions, to comply with FATCA. […] In Model 2, financial institutions will report information directly to the IRS rather than their local jurisdictions.”

   Of course there are some other interesting bits in there, too.

   Can someone who knows more about this stuff than I do explain this in the context of the agreement Canada signed? Were there really negotiations involved or did Canada essentially take one of two options (models) given?

   I am asking because it seems the Canadian government (and John Weston in his letter, above) seem to be touting the CRA as middleman thing as some kind of grand achievement on their part. Of course I am skeptical.

2. (It is a Friday night, there is fresh baked bread, pasta and wine waiting for me and I am scouring the internet looking for info on FATCA IGAs. I wonder if soon I will be writing a singles ad: “Formerly content and happy Canadian, now distressed and lonely ‘U.S. Person’ looking for same…” 🙂 )

3. @Wren

   I would be in the same boat as u… but significant other kind of objects to me dating… geez… he is a wet blanket…lol

   My ad would look like…

   Formerly stress-free… maybe broke soon canuck… Looking for a NON-US Person who will keep me in the style I am use to… having 3 square meals a day… & a roof over my head… geez… I just realized I could be advertising for a jail cell… lol… ok.. back to the *medical* booze..

4. @Wren…
   As someone new to FATCA, understand you not being up on the development of IGAs..

   Basically Canada signed a Model 1, not any different than the very first signer, the UK… I haven’t done a word for word comparison, but I would be very surprised if there was anything different.

   In the negotiation, Treasury does NOT allow you to change the boiler plate of the IGA, or they would have to apply it to all signers of the IGA before you. So, generally nothing changes,

   It is in the annexes that they got their much trumpeted concessions with deemed compliant, exclusions for certain retirement accounts and the credit union exemption below $175M, which again, were pretty much standard fair in line with other countries…

5. Only thing Canada did was exclude reporting of RRSP’s and RESP’s etc. That of course makes virtually NO difference whatsoever since they will send all other financial data along to IRS which will put happy Canadians in IRS gun sights with or without IRS knowing exact RRSP balances. They will simply make a specific demand for that information once they start enforcement proceedings and, under the tax treaty, Canada will give it to them anyway in most cases. Canada was either hoodwinked and slow witted (I charitably choose to discount that possibility) or pretty much invited the US to hang themselves with overreaching. Finance has NEVER come out and said they have any credible view that the thing will pass Charter challenge. My conclusion is that they are virtually certain that it will not and will shelter behind the judge’s robes in not enforcing this crap.

   The US cannot complain since this would not pass Bill of Rights challenge either! Imagine if Congress were to pass a law obliging ALL US financial institutions to send to the IRS data on the place of birth and dual citizenship if any of ALL of their clients in the US with such data able to be sent on to such countries as the IRS administrative decides to send to (without oversight from anyone)? Imagine if no Americans could open a bank account or buy life insurance without providing detailed information on their place of birth, a sworn statement that they are not citizens of country X, Y and Z? Imagine of naturalized US citizens were told that their complete net worth statements, all aspects of their financial lives were to be shipped off to the country of their parents until they paid fines, penalties and an “exit tax” of all or substantially all of their net worth for the privilege of severing ties with a country they have not lived in for decades and, in some cases, ever? Imagine if the handicapped were told that any disability benefits they receive from the US must be reported to a foreign country who demands its “taste”? Imagine if US law OBLIGED US citizens to co-operate in all of this shakedown? I’m sponsoring an over-under contest for how many milliseconds such a statute would last once challenged in court (to say nothing of its chances of ever being passed). The above is in NO WAY an exaggeration of what Congress is asking of foreign countries with FATCA. Were they to put their own legislation in the mirror and examine it for a moment, any honest Congressman should be horrified. But, that would require mental effort in behalf a constituency which is not theirs. Why step over an ant hill when you can step on it?

6. @US_Person_Foreigner – Ha! That’s the thing. I’m not single now, but thanks to FATCA I may soon be.

   @Just Me and @Anne Frank – Thanks for the info.

   @Just Me – To be clear, I’m not new to FATCA. Like most people I’m up on the developments as far as they are reported here and in the news. I was just looking for some clarification in the context of the CPC bullsh*t that has been served up as of late.

7. @Anne Frank – Yes, when put that way perhaps it has a chance of breaking through. Maybe it’s time to start sending letters – that put exactly that bent on it – across the border. Not necessarily to Congressmen but to Americans with representation who can appeal to them. I’m going to use your comments as a reference when I send emails to family members in the U.S. this afternoon.

8. @ US Person Foreigner

   No, you are not going to be broke because you are going to cash out of your bank accounts and buy some gold and silver .999 bullion as security and put it in a safe place other than a bank, in fact many safe places. You would be CRAZY not to do this. This is how most Jews, who survived or didn’t have it stolen by the Nazis, survived in the end. This is totally legal even if you declare it, they can’t get it and if you sell it then you can pay the gains tax IF there is a gain we hope but no one I know sells any anyway.

9. Adults only…….we seriously need to add a certain word to our writing lexicon to MPs and other useless brainless individuals so they are clear about what we are saying
   

10. Great thread everyone – thanks.

    I detest the reference “dual” too, but I sometimes use it in twitter messages in that it’s a lot shorter than other more apt descriptions. I agree, there’s no such thing as a dual (hybrid) citizen, unless you’re from Dual-land.

    For those who are new here, here’s a little Brock related background history on John Weston:

    http://isaacbrocksociety.ca/2012/05/01/john-weston-mp-invites-former-irs-deputy-commissioner-to-canada/

    http://isaacbrocksociety.ca/2012/06/26/a-response-from-john-weston-mp-on-fatca/

    http://isaacbrocksociety.ca/2012/07/20/more-correspondence-from-the-office-of-john-weston-mp-irs-is-a-budget-issue-for-the-government-of-canada-get-your-voice-heard-before-the-deadline-for-2013s-budget-submissions/

    http://isaacbrocksociety.ca/2013/06/25/another-response-to-a-constituent-from-john-weston-mp-for-west-vancouver-sunshine-coast-sea-to-sky-country/

    To receive such a form letter after sitting face to face with Mr Weston, telling him my plight – is infuriating.

11. FATCA Education from Allison Christians – Must READ – for MPs and everyone else:

    http://www.ifcreview.com/restricted.aspx?articleId=7479
    ax Cooperation, Past, Present & Future

    By Professor Allison Christians, H Heward Stikeman Chair in Tax Law, McGill University Faculty of Law, Montreal, Quebec, Canada (01/03/2014)

    ……………”Canada and the United States already have an automatic information-exchange regime in place (this makes FATCA a clearly unilateral imposition since there is nothing new in terms of tax cooperation to be gained by Canada in signing an IGA). Second, Canada has perhaps the world’s largest population of people who would be immediately and negatively affected by FATCA (with the possible exception of Mexico,..”….

    …………”…..It is important to observe that the vast majority of people in Canada who will be negatively affected by FATCA are likely to be so not because they are tax cheats, but instead because they are caught up in the US tax net, often without knowledge or understanding of this fact and its corresponding obligations. This happens because of the exceptionally extra-territorial nature of the US income tax system, virtually alone in the world, which treats people as if they were US residents based solely on their legal status as US citizens or green-card holders. Thus, the United States not only claims the right to tax all of the people actually resident in its jurisdiction—as all other countries with income tax systems do—but it also claims the right to tax all the people in the world that have legal ties to it, which virtually no other country in the world does (with the exception of Eritrea, a dictatorship that has been sanctioned by the UN for attempting to impose a two per cent tax on its diaspora in order to raise money for ongoing war efforts).

    The US practice of status-based taxation demonstrates why treaty override should be considered particularly pernicious in this case, since its effect is to enable the US to expand its jurisdictional reach beyond that exercised by any other country, in a manner and to an extent that is unprecedented in the history of the income tax. ………………the addition of FATCA to the treaty directly enlists the aid of treaty partners in exercising unprecedented jurisdictional claims of another sovereign over their own residents. That is a fundamental change in the undertakings of treaty partners, which should not be ignored by reframing the change as a mere interpretation of an existing agreement. The US-Canada tax treaty relationship should prove instructive in this regard……”……..

    …….”..FATCA overrides the existing treaty by unilaterally denying the treaty rate to Canadian resident financial institutions that would otherwise qualify for those rates under the existing, duly negotiated, treaty provisions currently in force, unless certain conditions are met both by the taxpayer and the government of Canada..”….

    ….”..the possibility of unilateral override is a known risk of negotiating with the United States..”….

    …………..”…As a treaty override that comes with great cost and consequence to governments, financial institutions, and most of all human beings, FATCA stands as an ongoing violation of long-standing cooperative efforts on taxation by the international community of states. It is in danger of undermining that cooperation by forcibly engaging the whole world in the project of compelling global compliance with just one tax jurisdiction, and the planet’s most expansive one at that. No compensation has been offered for the breach, and no remuneration is being offered for the cost of complying with the new, unilaterally imposed conditions. Moreover, scant attention appears to have been paid to the fact that accepting the treaty override in this particular case means assisting the US in expanding its extraterritorial enforcement with respect to taxpayers who by overwhelming international consensus do not belong in the US tax net at all. This puts treaty partners in the odd position of accepting a violation of foundational international tax norms based in the residence principle, against residents of their own jurisdictions, and at their own cost. ….”…

12. @Badger
    Another good one from Allison..
    Thanks for drawing my attention to it.

13. @badger – Thank you I have just incorporated your excerpts into an email that I have sent to several people including two newspapers. My email was as follows, I hope that you dont object:

    The Isaac Brock Society fight against FATCA

    I am asking for your support and interest in this campaign.

    Much information regarding FATCA, the growing international struggle to overturn it and links to other sources can be found on the Isaacbrocksociety.ca blog site.

    The Isaac Brock Society, in 6 days went from deciding to raise money for a Legal Opinion (independent of that already issued on his own behalf by a leading Canadian Constitutional lawyer, Mr Peter Hogg – see attached), to setting up a web site and crowd funding with donations and to closing the donation medium as sufficient money had been raised to pay the Constitutional Lawyer being engaged, Mr Joe Arvey. Should the Legal Opinion from Mr Arvey also indicate that the FATCA and the IGA are an abuse to the Canadian Charter of Rights and Freedoms, then further funds will be raised to commence a Constitutional action in Canadian Court.

    In Canada, Leader of the Green Party, Elizabeth May, has recently raised the matter of FATCA’s conflict with the Canadian Constitution and Charter of Rights in Question Time in Parliament. The NDP spokesman on financial matters earlier raised the matter in Parliament Question Time. Some Liberal Party MPs seems to be concerned about the matter and have also tendered questions although Justin Trudeau just does not seem to “get it” yet. It is the Conservative Leadership (Prime Minister Harper and his Finance Minister Jim Flaherty) that seems to be “selling out” Canada’s Sovereignty … and it does hurt me to write this as conservative analysis has always seemed to me to be more reliable than the alternatives. If FATCA succeeds then I suspect that this will be the last Conservative Government that Canada will have … at least for many many decades to come … there are too many Canadian voters that will be adversely affected by this appalling, sovereignty grabbing, economy killing, jobs killing, US Domestic but extra territorial legislation.

    US Bankers Associations seem to have woken up to what FATCA and the Inter Governmental Agreements will mean to them – in terms of cost and in terms of loss of business as investments held by NON Americans in the financial system in the US are likely to start seeking to exit and the increasing reluctance of people worldwide to do business with Americans – inside or outside America.

    In the US, Senator Rand Paul is leading one fight to stop FATCA in the US Senate due, I believe, to its breach of the Privacy rights of all people.

    Republicans Overseas have proposed and the Republican National Committee has passed a resolution calling for the repeal of FATCA.

    Democrats Abroad are calling for alteration of FATCA – they plainly do not want to be seen as being against the President and the Democratic party in the “Homeland” and so are calling for change rather than repeal … the fact that they are calling for anything at all in the matter makes it clear that FATCA is a problem that over-rides political party differences.

    Americans Abroad are objecting to FATCA in submissions to Congress.

    US Media have been largely ignoring the topic though there is starting to be some coverage. Canadian media has started to react …. albeit with a large dose of incredulity that such a thing as FATCA could in fact be happening. As people begin to understand what FATCA does and causes, each person is having an “Oh My God” moment and having to face the shock of the degree to which FATCA invades the Sovereignty of all countries worldwide, negatively affects people’s human rights and has started to cause and will cause endless unimagined side effects including reducing the ability of Americans, Green Card Holders and other “US Persons” to conduct business and obtain employment around the world.

    The web site RepealFatca.com is a great source of information. To quote from the site “RepealFatca.com is a website dedicated to getting rid of the worst law most Americans have never heard of” and is administered by Mr James Jattras”. James George Jatras is the Editor of RepealFATCA.com. He is a Washington-based government and media relations specialist. He previously was a U.S. diplomat and U.S. Senate staffer. He is also an attorney licensed in the District of Columbia and Pennsylvania, and before the U.S Supreme Court. His contacts are +1.202.375.1007 and Email: repealfatca@gmail.com

    Below is a posting on the Issac Brock Society Blog, it references views from Professor Allison Christians, H Heward Stikeman Chair in Tax Law, McGill University Faculty of Law, Montreal and is self explanatory:

    Professor Christians has published and spoken on this subject a number of times and is a great source of reason and analysis of tax law and tax custom.

    badger says
    March 8, 2014 at 6:17 pm

    FATCA Education from Allison Christians – Must READ – for MPs and everyone else:

    http://www.ifcreview.com/restricted.aspx?articleId=7479
    Tax Cooperation, Past, Present & Future

    By Professor Allison Christians, H Heward Stikeman Chair in Tax Law, McGill University Faculty of Law, Montreal, Quebec, Canada (01/03/2014)

    ……………”Canada and the United States already have an automatic information-exchange regime in place (this makes FATCA a clearly unilateral imposition since there is nothing new in terms of tax cooperation to be gained by Canada in signing an IGA). Second, Canada has perhaps the world’s largest population of people who would be immediately and negatively affected by FATCA (with the possible exception of Mexico,..”….

    …………”…..It is important to observe that the vast majority of people in Canada who will be negatively affected by FATCA are likely to be so not because they are tax cheats, but instead because they are caught up in the US tax net, often without knowledge or understanding of this fact and its corresponding obligations. This happens because of the exceptionally extra-territorial nature of the US income tax system, virtually alone in the world, which treats people as if they were US residents based solely on their legal status as US citizens or green-card holders. Thus, the United States not only claims the right to tax all of the people actually resident in its jurisdiction—as all other countries with income tax systems do—but it also claims the right to tax all the people in the world that have legal ties to it, which virtually no other country in the world does (with the exception of Eritrea, a dictatorship that has been sanctioned by the UN for attempting to impose a two per cent tax on its diaspora in order to raise money for ongoing war efforts).

    The US practice of status-based taxation demonstrates why treaty override should be considered particularly pernicious in this case, since its effect is to enable the US to expand its jurisdictional reach beyond that exercised by any other country, in a manner and to an extent that is unprecedented in the history of the income tax. ………………the addition of FATCA to the treaty directly enlists the aid of treaty partners in exercising unprecedented jurisdictional claims of another sovereign over their own residents. That is a fundamental change in the undertakings of treaty partners, which should not be ignored by reframing the change as a mere interpretation of an existing agreement. The US-Canada tax treaty relationship should prove instructive in this regard……”……..

    …….”..FATCA overrides the existing treaty by unilaterally denying the treaty rate to Canadian resident financial institutions that would otherwise qualify for those rates under the existing, duly negotiated, treaty provisions currently in force, unless certain conditions are met both by the taxpayer and the government of Canada..”….

    ….”..the possibility of unilateral override is a known risk of negotiating with the United States..”….

    …………..”…As a treaty override that comes with great cost and consequence to governments, financial institutions, and most of all human beings, FATCA stands as an ongoing violation of long-standing cooperative efforts on taxation by the international community of states. It is in danger of undermining that cooperation by forcibly engaging the whole world in the project of compelling global compliance with just one tax jurisdiction, and the planet’s most expansive one at that. No compensation has been offered for the breach, and no remuneration is being offered for the cost of complying with the new, unilaterally imposed conditions. Moreover, scant attention appears to have been paid to the fact that accepting the treaty override in this particular case means assisting the US in expanding its extraterritorial enforcement with respect to taxpayers who by overwhelming international consensus do not belong in the US tax net at all. This puts treaty partners in the odd position of accepting a violation of foundational international tax norms based in the residence principle, against residents of their own jurisdictions, and at their own cost. ….”…

14. That’s a great letter nervousinvestor, badger

    Bad luck for the Conservatives to had been in power when the F-bomb was launched. I doubt we’d be in any different position if it had been any other party leading the country today however – others would have capitulated, no doubt, the difference being that any other party might have apologized before throwing us under the bus. Not only are the Cons unapologetic about their achievement- they’re “thrilled” with it. I feel as though Weston’s trying too hard to sell me something with this curious choice of words. How patronizing.

15. Mr. Weston, am I supposed to be thrilled that the CRA itself will now have more private financial data on me than the millions of Canadians without US status? Can the CRA use that additional data to cause me greater harm than those whose information remains private?

16. Since John Weston, MP, claims on his website:

    “John is a passionate advocate for human rights and has spoken in the House, at home, and abroad to urge action against oppression.”

    I would like to ask him why he is not only is very comfortable discriminating against US-born Canadian citizens but is actually, in his words, “thrilled” to do so.

17. The gentleman is thrilled too much. If he wasn’t trying so hard to sell the IGA and had any sensitivity at all about how his words would be taken, he would have been better off not telling us how he felt about the IGA. It’s like he’s trying to get a kid to take some really awful tasting medicine by saying it tastes really good, when both the kid and he know that it’ll eventually be crammed down the kid’s throat anyway.

    Actions speak louder than any self-promoting claim on a website.

18. @nervousinvestor, we’re all sharing and benefiting from each other here. Just happy to be able to contribute.

19. John Weston, did Mark Matthews not tell you what he really feels about FATCA before your government put Canada on board?

    http://www.mainjustice.com/justanticorruption/2014/03/19/fatca-get-ready-for-the-train-wreck/

20. @bubblebustin,
    The irony is too much.

    Thanks for noting the ironic contrast between the Weston comment above, and Matthews criticism of FATCA below;
    “.. Among other things, I [Weston] also arranged for prominent U.S. tax attorney Mark Matthews to come to Ottawa on May 30, 2012 to brief Caucus members concerning these matters…”

    I just read that reference to Matthews on another thread and remembered that Weston had said that Matthews had spoken to the Harper caucus.

    So, inquiring minds want to know – what exactly did Matthews say to Weston and his fellow Conservative MPs? Anything similar to what he is quoted as saying of FATCA recently, reportedly; “..one former prosecutor has a clear message: “It is going to be a train wreck.”

    Mark E. Matthews, ….. who was an IRS Deputy Commissioner from 2003 to 2006 and a Department of Justice prosecutor, lobbed criticism at the wide-ranging set of laws Tuesday morning during the 19th Annual International AML & Financial Crime Conference in Hollywood, FL.

    “I don’t know how you enact a statute that will have billions of dollars in global weight without a single public hearing,” he said. This summer we’re going to see some bad results.”………
    “…..There are about 20 million tax cheats in the U.S., and of those the IRS goes after about 1,500-2,000, mostly strategically,” Matthews said.

    Matthews pointed to figures suggesting small businesses are far and away the biggest violators of tax law, pocketing some 52 percent of income without reporting it. “Small businesses are a little more politically protected, a little more connected….” http://www.mainjustice.com/justanticorruption/2014/03/19/fatca-get-ready-for-the-train-wreck/

21. @Badger

    Yes, just what the heck did Matthews tell Weston and his caucus about FATCA’s feasibility?

    There’s probably no point in asking Weston what went down, is there?

22. @bubblebustin, you could ask, but I doubt that what happens in caucus would be shared. I could be wrong. At least though, providing him with the Matthews quotes and asking him for his thoughts on the tone and conclusion that Matthews is stating in public – at a big gathering of compliance professionals tells him that the commentary in the US is starting to make Canada’s signing of the IGA look weak and stupid. (Or other more diplomatic words to that effect?). Because if FATCA comes under increasing attack WITHIN the US, and the flaws get more attention, it makes the IGA harder to rationalize.

    Maybe the Harper government could see that they can save face by agreeing to delay the enabling legislation – citing the growing opposition, delays and disarray inside the US – and propose to await the outcome of the passage of the additional authority that Obama has called for re those IGAs http://www.repealfatca.com/index.asp?idmenu=4&idsubmenu=150&title=james-george-jatras-interview-on-israel-national-radio .

    The trainwreck is going to make the Harper Ministry of Finance, and National Revenue look gullible, weak and lacking in savvy.

23. @Badger

    If John Weston’s going to drop Mark Matthew’s name to lend credibility to Canada’s IGA, he should be prepared to have that relationship examined more closely – especially when that credible source’s statements conflict with your own.

24. Canada was either duped or threatened into entering into an IGA. It’s extremely disingenuous of them to try to convey anything otherwise. As I’ve said earlier, I’d rather be told honestly that I’m being thrown under the bus for the sake of Canada’s banking industry, than have them insult me with their obfuscating double talk.

25. bubblebustin,

    And then obfuscation as the Conservative government says it negotiated a good deal in gaining “exemptions” for Canadian registered and other accounts. They will not even come right out and say the only “exemption” is for the banks not to turn that account information over to the CRA for sending on to the US IRS. It is dishonest for them to say that this does nothing for the requirements that are still there for those that are now referred to as “Americans who happen to live in Canada”, “US citizens resident in Canada” and “US taxpayers resident in Canada” — somehow having taken away the right for us to be called the CANADIANS that we are. (Note that Elizabeth May did call us Canadians — as she is one too.) I would like the government to directly say this is a condoned in Canada ‘evasion’ of US tax compliance and reporting responsibilities — as Canada will not collect tax or penalties for Canadian citizens from the time they became citizens (vs US Persons resident in Canada?).

    For example, my son’s RDSP and TFSA will now not be reported (hopefully) to the CRA by his bank. That leaves a bank account that I hold for him to disperse (for monthly expenses) his provincial disability funding and a small chequing/savings account — those two accounts will never reach anywhere near a $50,000 threshold for identification. It does not in any way solve the whole problem of him still being considered a US citizen and still under the shadow of US threat if not fully compliant year after year after year for no taxes actually owed to the US, but lots of expensive compliance administration cost. It appears to me that Canada shows it is very weak in that it will not stand up for ALL of its people and say, for their ‘US Person’ people, Canadian citizenship takes precedence over their *supposed* US citizenship.