My submission to Department of Finance (IGA-AIG@fin.gc.ca), by Peter W. Dunn, PhD
Introduction:
In 2013, the Government of Canada deported head of Eritrean Consulate, Semere Ghebremariam O. Micael, for using the consulate as a base for the collection of a 2% Diaspora tax. CBC’s Meagan Fitzpatrick reported the following (May 29, 2013):
Deepak Obhrai, parliamentary secretary to Baird, further explained the decision to expel Micael when he spoke to reporters Wednesday morning.
“We have been very much concerned with the actions of the Eritrean consul general here in Canada. We had asked him at the early stages not to do this, it is contrary to our laws, but our information is that they continued doing it,” said Obhrai. “And so we finally had to take action. We cannot allow our territory to be used for fundraising for other countries.”
Thus, the Canadian government of Prime Minister Stephen Harper took necessary actions to protect Canadians of Eritrean national origin from the tax collecting efforts of Eritrea. With the proposed legislation, however, the government refuses to protect Canadians of United States origin, and therefore, will be in violation of article 15 of the Charter of Rights and Freedoms. Not only so, but the proposed legislation would violate several rights of Canadians.
A. The Heart of the Matter: Principle concerns
I am the administrator and founder of the Isaac Brock Society, henceforth “Brock”, (http://isaacbrocksociety.ca), a web-based gathering place for people concerned about FATCA and its implementation throughout the world. Most of the people who now participate in our discussion are very disappointed with the government of Canada. The main reason for this is two-fold:
(1) The government of Canada is implementing through this legislation National Origin discrimination which is strictly forbidden by the Canadian Charter of Rights and Freedoms article 15. The government of Canada fails to provide equal protection to certain Canadian citizens.
Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
The proposed legislation will enact systematic discrimination of people who are of United States national origin. Most of our participants at Brock have a connexion to the United States. Some are married to a US citizen. Some were border babies–thus, the flimsiest of ties. But most are Canadian citizens. Thus, the legislation proposes to single out Canadians of US national origin for special treatment and in many cases, to send their banking information to a foreign government for tax collection and criminal enforcement purposes.
(2) The government of Canada will be sending the bank account information of certain Canadians to a foreign government, which will expose these Canadians to damage through extra-territorial taxation under United States tax code and to felony charges under US criminal code.
(a) The Conservative government is seeking through Strengthening Canadian Citizenship Act to strip certain Canadians of their Citizenship. In practice, Finance Minister Flaherty is already stripping certain Canadians of their right of citizenship by agreeing to send their Canadian banking information to the IRS. This is tantamount to extraordinary rendition: the CRA will in certain cases strip Canadians of their Canadian privacy rights and their right to financial protection from a hostile foreign government which is desperate for funding. I thought that the government of Canada learned its lesson about extraordinary rendition from the case of Canadian Maher Arar, whom suffered torture because the RCMP aided the United States in deportation to Syria; this cost taxpayers 10.5 million when the government settled with Arar. The Canadian citizen who suffers financial damages because of the Minister Flaherty’s decision to render that citizen’s private Canadian banking information to the IRS has grounds for lawsuit against the government. Why would the government of Canada expose itself to such damages?
(b) The CRA will give this banking information in what amounts to a felony investigation under US law (Bank Secrecy Act) resulting in possible criminal charges, imprisonment and fines exceeding 300% of a Canadian citizen’s financial wealth. Finance Minister Flaherty has euphemistically referred to this cooperation with United States law enforcement as an “exchange of information”, when it should be more properly termed the enforcement of a general warrant (hence, fishing expedition) requiring financial information that is potentially incriminating under United States tax and bank secrecy laws. But these bank accounts are completely innocent and legal under Canadian banking law: yet the effect of this legislation would be to make it illegal for certain Canadians to have legal bank accounts without the CRA disclosing their financial information to a foreign government. This fails to acknowledge article 8 of the Canadian Charter of Rights and Freedoms:
Everyone has the right to be secure against unreasonable search or seizure.
How will the government of Canada prevent Canadians that cross the border, whose banking information the CRA has sent to Washington DC, from detention and arrest, based on this information? Already United States seems to moving towards greater co-operation between the IRS and the US Customs and Border Protection, and those whose bank accounts are not in conformity with United States law may be open to detention. Again, these individuals would have the right to damages from the Canadian government which gave their private banking information to the IRS. Since the Canadian government cannot guarantee how United States will use the information, it is irresponsible to share it.
B. Other Damages and Abuses: What Canada is already allowing the United States to do
Apart from these principle concerns about the fundamental right of Canadians to protection, the participants at Brock have been subject to many other kinds of abuse which the Government of Canada is allowing to take place within our borders–indeed, with the direct complicity of the Canadian government in some cases:
(1) Cross border accountants and lawyers who are the main implementers of US law in Canada operate with impunity. They do this at exorbitant fees, in an industry unregulated by Canadian law. The services of these experts provide no net benefit to the residents of Canada, as they are collecting taxes for the United States treasury. I am aware of a case in which a tax lawyer charged over $25,000 to help a middle-class Canadian to pay $3000 (i.e., 5% of his Canadian financial assets) Offshore Voluntary Disclosure Program penalty to the United States. In order to pay these fees, he had to take a mortgage on his Alberta home. I know also of a woman who will relinquish her US citizenship but paid a cross border lawyer $4,000 to prepare her taxes and disclosure forms for her 2012 all-Canadian income of $50,000, and yet she owed zero taxes to the United States. Canada regulates many industries to protect consumers. But by acknowledging the United States’ tax law which imposes United States taxation on its alleged citizens no matter where they actually reside, the government of Canada has created a climate of fear in which tax specialists can charge exorbitant fees. This industry has no legitimate business being within the borders of Canada, as it is implementing tax laws to which Canadians did not consent.
(2) Francophones in Canada have the right to correspondence from the Canadian government in French. The IRS only communicates in English and does so using Canada Post. Thus, the government of Canada aids and abets the imposition of English tax enforcement on francophones in Canada. The entire United States tax code of roughly 75,000 pages is in English only—rarefied English only understood by American tax experts. How are francophone Canadians suppose to understand this tax code that even native English speakers do not understand? Why does the Government of Canada allow the IRS to have federal jurisdiction in Canada to tax Canadian citizens, when this violates the hard won right of francophones to have the laws that apply to them be in a language that they understand?
Again the Charter of Rights and Freedoms protects francophones in Canada to the imposition of laws not written in French. Yet the effect of the agreement, is that the Canadian government explicitly acknowledges United States laws as having jurisdiction in Canada; these laws are in English and will apply to many Canadian citizens, including francophones, who live in Canada. As the Federal Government of Canada cedes its own sovereignty to the United States, I imagine that its failure to protect francophones from the United States will inflame the Sovereignty movement in Quebec.
(3) Aboriginals living on Canadian treaty lands are exempt from taxation of their income. But they enjoy no such exemption from the United States. Is it not the duty of the government of Canada to protect aboriginals in Canada from foreign governments? Some aboriginals will be affected by this legislation, and they will go from tax exempt to facing full taxation under United States tax law.
Conclusion:
The first mandate of every government is to protect the citizens of the country. Failing to do that, the government delegitimizes itself and should be now open to sanction either from the voters or from the courts. I hope and pray that the government of Stephen Harper would come to its senses and vote down this legislation. It is not in the interest of Canada.
@calgary 411
Thanks so much and I hope I didn’t sound as though I thought people here at IBS haven’t been doing enough. I am amazed by what you have all done already and I know that the process can be physically and emotionally exhausting. Does anyone here know if a change.org or avaaz.org petition has been started against FATCA here in Canada?
molly,
I think that a change.org or avaaz.org petition would be better after we have some better media on FATCA. We have had petitions that fizzled out and I think that may be one reason.
This Move-On petition has been up for some time, and I would encourage anyone who has not signed it to do so: http://petitions.moveon.org/sign/repeal-fatca.
A more recent petition from Republicans Overseas is at: https://www.abolishfatca.com/live/. Again, please anyone sign if you have not yet done so.
Gwen started an avatar.org one here:
http://isaacbrocksociety.ca/2013/11/20/petition-against-fatca-on-avaaz-org/
Frankly, I don’t know if these unofficial petitions do more than make people feel good.
bubblebustin, molly,
I see that one of my comments at the avaaz-org petition post was:
Sadly, as in the Move-On petition, it appears people are going to have to be hit in the head with a board or a brick to know they are affected. That will be done by their Canadian and other-country banks. Sheeple are sheeple.
After they are hit in the head either by good media coverage or their OMG moment at their local Canadian “foreign financial institution”, then they may better respond and get others to respond to a good petition. There has to be more awareness first (I think).
You nailed it Calgary.
In a moment of frustration I sent my MPs office manager a nasty reply after receiving numerous form letters. This is Michelle Rempels reply.
FATCA has raised a number of concerns in Canada. The agreement addresses those concerns by relying on the existing framework under the Canada-U.S. tax treaty. CRA will not assist the IRS in collecting U.S. taxes and no new taxes will be imposed. In our negotiations we obtained a number of concessions, including exempting certain accounts like RRSPs, RDSPs, TFSAs, etc. from FATCA reporting.
Without an agreement in place, our financial institutions would still have to comply with FATCA. This would have required banks to:
· report information directing to the IRS
· deny basic banking services to clients.
Furthermore, both banks and their clients would have been subject to a 30% withholding tax. With an agreement in place, this won’t happen.
With respect to Eritrea, the UN Security Council toughened sanctions against Eritrea in December 2011 over its alleged support for Islamist militant groups such as Somalia’s al-Shabab. Eritrea is under a UN arms embargo, which prohibits the provision of financial assistance related to military activities to Eritrea. Under Canadian Law it is illegal for any person in Canada or any Canadian outside Canada to knowingly provide or transfer, directly or indirectly, technical or financial assistance related to military activities or to the provision, manufacture, maintenance or use of arms and related material, wherever situated, to any person in Eritrea. The 2012 UN report by the UN Monitoring Group on Somalia and Eritrea mentioned that extortion, threats of violence and fraud were being used to collect the tax in some cases. Each of these acts constitutes an offence under the Criminal Code and should be reported to law enforcement agencies.
Canada considers tax collection by a consulate to be inconsistent with consular functions as provided for in the Vienna Convention on Consular relations. However, nothing prevents a country from taxing its citizens abroad by other means, provided that they abide by domestic and international law.
Sincerely,
Office of The Honourable Michelle Rempel, P.C., M.P.
Calgary Centre-North
Molly,
Just a note to let you know that I passed along your good comment about wondering why there is not more media coverage to a journalist that interviewed me a month or so ago. I told him that “my story / my son’s story” is old news, which I think it is. Perhaps not to those who aren’t as deeply entrenched as those here.
I want journalists to now be concentrating more on what our government is doing in regard to implementing the IGA that was negotiated with the US. There is good discussion on the process of all that at http://isaacbrocksociety.ca/2014/03/13/free-vote-party-vote-or-no-vote-at-all-for-canadian-mps-on-the-us-fatca-iga/. That needs to be kept before ALL Canadians — it will cost and affect us all and will set a dangerous precedent.
@disgusted
What does the Treaty say about conducting warrant-less searches?
Thanks Calgary411.
I agree with you that a petition would be more effective after more media coverage to raise the general public awareness. We’ll undoubtedly see more coverage on FATCA as July gets closer. In the meantime, though, I’ve been in contact with a couple of journalists and both are very interested in pursuing this story. I won’t let this go, and I have a LOT of media contacts.
Molly,
That is great news. We’ll all appreciate your work using any of your media contacts.
I was just over at Maple Sandbox and read this comment: http://maplesandbox.ca/2014/canadians-take-first-legal-step-to-prevent-harper-government-from-implementing-u-s-fatca-law/comment-page-1/#comment-13854
That important news release ignored by all of the Canadian media — why is that? I just don’t get it.
This is the story the media should be right on top of, not my tired old story that’s been told so many times.
@Calgary411,
I don’t get it either.
Would it be worth it to contact Mr. Jatras and ask how he got published in the Toronto Star? Maybe he has a contact?
@Char,
To bring up your protest thread again, perhaps topless protesting will garner some media attention? …could be quite a site, especially since most of the Canadians in the FATCA know, are likely well over 50! 🙂
Yes but we would have to provide barf bags!
I would sooooo love to have a massive protest! Do you think there is any hope? I just posed the question over at Maple Sandbox too. (I am Dual Senior over there. Don’t know how to get names the same in both places cuz I screwed up.)
Char,
You can see some of our protest photos at http://we-are-not-a-myth.tumblr.com/ (to which you can contribute — always welcome and will make that visual more powerful!).
My/our Calgary protest was likely the smallest — one day with a 70 year-old and the next day I was joined by a much younger friend from Canmore. Could not get one other from Calgary to join in. One day I hope that will be easier.
@molly
Sorry to say… people who *help* are out for as much money as they can. I wanted some advice… could swear I saw the calculator adding up my costs in their eyes… dang sharks…
@WhiteKat and @Calgary411
Reason I think is because they don’t think it effects *real canadians* only US citizens who happen to be in Canada… They don’t seem to realise… my butt hit canadian soil on the day I was born.. I am a canadian citizen… who has a stupid gc… many people do because the borders are so close & in the ye olde day… no one thought twice about getting one… big mistake I say. People still think this crap is about americans only… not US persons… & they truly don’t understand or care because they think it won’t have anything to do with them. So until they become 2nd class citizen like I am… they don’t understand anything.
Should I email John Richardson to see what he thinks? He must have a handle on willing bodies in Toronto and might rally some forces, have some ideas.
@ molly
It sounds like you have good experience in the media realm. Are the Conservatives going to be going into defensive or even offensive mode now that they have adopted the IGA as their own? Will it get harder for us to get our message into the media and will all Conservatives be singing the same song every time we try to reach out to them (already seeing those “talking points”)? Do you have any advice about circumventing what I think could be a pretty big obstacle?
Char,
Why don’t you take up WhiteKat’s offer to put a post up for you as the organizer of another Toronto protest (now that the weather is getting warmer) to find out the interest and possible participants?
(In my opinion, John Richardson is so very busy creating submissions and presenting at information sessions, near and far, that he’s getting spread pretty thin. Of course, it wouldn’t hurt to ask him.)
@Calgary411 @Whitekat
Okey dokey, let’s put up a post and see what happens. (As a newbie are you sure I won’t be offending anyone?) I will truly be depressed if out of more than one million people in Canada with tainted US blood a few hundred can’t show up for a rally. As I see in so many of the postings here many are doing great work going after the MPs. In a multi pronged approach I think equal effort should be directed at Uncle Sam. I read someplace recently that the world is watching Canada’s response to FATCA/FBAR as it has the most IRS identified folks. If we could be a beacon to the rest of the world they might also have the courage to stand strong.
I do think a brilliant theme to direct at the US consulate is John’s idea of how the US is robbing Canada of its assets and the Canadian Government is paying them to do it. This also informs other Canadians that this is their problem also. I guess my hope is not so much that the US Consulate hears us, though that is OK too, but that other Canadians hear us. For myself I had only thought of this situation and how it pertained to me, I never saw the larger picture of how it pertained to Canada in general. Now if we could just arrange the news outlets to be there life would be infinitely perfect. I would be interested on all of your thoughts on my meanderings.
@Whitekat….. (Me going topless would terrify them, freakin’ Hell, it terrifies me!!!)
@Charl
I will join the protest, even topless.All Breasts are nice to look at. I will jus cover below them. It is legal to be topless in Ontario. We need men with us to be topless too. Don’t be shy.
I think the press has a leash. And it is held tight on certain issues.
Maybe reasearch on effective protest attention grabbers that do not get people arrested. How about parents of disabled children with RSDPs in a protest.
The weather has to get better though. My neck of the woods is getting a ton of snow today.
I wish I never moved so north. I would be much more helpful in our cause.
@Char
I am so sorry I no longer reside in Toronto as I would happily join your topless protest. Coming up with a sign would be so simple. “The US Government took the shirt off my Back”
It reminds me of a funny incident in my past. I worked as a lifeguard at our local YMCA when I was a young woman. I happened to run into a man, away from my workplace,who was a participant in the senior swim. The first words out of his mouth were “Disgusted I didn’t recognize you with your clothes on.”
@USPF
I would have a lot more respect for Canada’s current government if they would just be honest with us than all this double talk. Admit that you’re throwing some of your citizens under the bus for the sake of our banking system’s stability, instead of this passive-aggressive behaviour of compliance with a one-finger salute to the US!
@Char,
I will ask Pacifica to give you my email address, so when you are done your post, you can email it to me, and I will post on your behalf.
@Whitekat Great, I will watch my email. I am hopeful that you can help me with the post also. I tend to rant and my verbal skills and intellect pretty much SUCK. I am brainstorming all of my friends for ideas….just to keep me from going topless!
@disgusted I like it! … took my shirt off my back!
@northernstar Winter so bad out here I’ve lost my mailbox, it is buried under about 20 ft of snow from the plow! I’ve got LOTS of room, you can bunk here if you can make it down. I would so love to put faces to my new found friends. (Although I’m about 1.5 hrs out of Toronto also).