We shall not stand up for Canadian citizens and residents in Canada.
We shall deem their ‘US indicia’ more important than their Canadian citizenship and permanent residence.
We shall change Canadian law of the land to enforce extra-territorial law in Canada.
Question from “Don” – If Harper wakes up some morning and finds the IGA has been ruled unconstitutional, how easy or difficult would it be for him change the Charter to enact ‘legal’ discrimination? In other words, what are his options?
Another MP letter answering a constituent, this time from the Minister of National Revenue:
Dear XXX:
Thank you for your correspondence of February 12, 2014, about the Foreign Account Tax Compliance Act (FATCA) enacted in the United States.
I understand from your email that you are opposed to FATCA and are critical of actions taken by the Government of Canada.
As you are aware, the U.S. uses citizenship as the basis for taxation while Canada and most of the rest of the world use a residency-based approach. I understand that this situation creates unique challenges, including compliance burdens for U.S. citizens who reside in Canada or elsewhere in the world, even when they do not owe U.S. tax. Please note that the U.S. citizenship-based tax system has been in place for many years and is not altered by the recently signed intergovernmental agreement under the Canada–U.S. tax treaty.
The Canada Revenue Agency (CRA) administers taxes and benefits only in Canada. Therefore, it encourages U.S. taxpayers looking for information on their U.S. tax obligations to visit the U.S. Internal Revenue Service (IRS) website atwww.irs.gov and read its guidance on the streamlined filing procedures for non-resident U.S. taxpayers atwww.irs.gov/uac/Instructions-for-New-Streamlined-Filing-Compliance-Procedures-for-Non-Resident-Non-Filer-US-Taxpayers .
While FATCA was enacted by the U.S. government to promote U.S. tax compliance, it has raised concerns in Canada among dual Canada-U.S. citizens and Canadian financial institutions. If the Canadian government had not signed the intergovernmental agreement, non-compliance with FATCA could have subjected Canadian financial institutions and their account holders to sanctions, including special U.S. withholding taxes on payments to them from the U.S. Also, compliance with FATCA would have forced Canadian financial institutions to report information directly to the IRS, potentially violating Canadian privacy laws.
You can find more information on why the intergovernmental agreement was signed on the Department of Finance Canada website at www.fin.gc.ca/treaties-conventions/notices/fatca-eng.asp .
As Minister of National Revenue, I can assure you that the CRA will administer fairly any legislation enacted to implement the intergovernmental agreement according to the privacy and confidentiality rights of Canadians. The intergovernmental agreement is strictly an information-sharing agreement and the CRA does not collect the U.S. tax debt of a Canadian citizen if the individual was a Canadian citizen at the time the debt arose.
Canadians who hold financial accounts can find more information at
www.cra.gc.ca/tx/nnrsdnts/nhncdrprtng/menu-eng.html .I trust the information I have provided clarifies the position of the CRA on this matter.
Yours sincerely,
Kerry-Lynne D. Findlay, P.C., Q.C., M.P.
Minister of National Revenue
That is one the most tragic results of the current inquisition – that Americans living abroad will not admit to being American any more. It’s astonishing that the US can’t see this, or can but just don’t see the value in a thriving diaspora. I suppose they don’t deserve one.
George –
We hide our Americanness in the closet from our neighbors and our own country.
And next, sew on the yellow star before climbing into the cattle car?
Alternative: At every opportunity, become a vocal bad-will ambassador for the hopefully-escaped-forever Homeland, their worst ongoing PR nightmare, a living testimony to eternal hatred of imperialist slavery, a walking billboard that deconstructs US exceptionalism. At every opportunity. It’s a message the rest of the world has to applaud.
It is now more dangerous than ever to be an American living outside the homeland. But the threat isn’t from so-called terrorists, but rather from the likes of Carl Levin and Chuck Schumer who pride themselves in making new laws for punishing expats.
Therefore, it is safest for Americans living abroad to keep their Americaness “inside the closet.”
“Don’t ask, don’t tell.” Because “expat bashing” is still popular among homelanders, particularly members of congress looking for scapegoats.
@ Joe Blow
Thanks, I got the list from the treasury site and it was updated to 3-7-14. So Slovenia too … okay.
@usxcanada
Yes, the USA has undeservedly enjoyed a good reputation for far too long. It’s time to expose them for what they really are. No need for bashing either, it suffices just to tell the truth about them.
“The intergovernmental agreement is strictly an information-sharing agreement and the CRA does not collect the U.S. tax debt of a Canadian citizen if the individual was a Canadian citizen at the time the debt arose.”
I think this is a most valuable piece of information. It means that the IRS can not collect from people in Canada. As long as you stay outside the U.S. you’re safe. I would not owe any taxes, but the fines and penalties could be huge as well as accounting and legal charges.
I grew up believing that the United States was an example to the world for freedom, democracy and justice. I believed that, at its core, the United States was a force for good in the world. I don’t believe that any more. The United States is quickly devolving into a totalitarian, fascist, police state. How incredibly sad!
@Henry Hub, It is a somewhat reassuring statement, but neither justifies, nor eliminates the real risk of harm done by our government in sending our private financial details to the IRS for processing.
I for one do not think the USA will be happy to send out thousands of penalty notices without the ability to collect on them. After what our government has agreed to, I have no doubt they will agree to confiscation under similar pressure in future.
Nor, do I presume my information will not be shared with other 3 letter organizations in the USA, and will not be safe from identity theft and other misappropriation.
@Whitekat I agree with you. The Canadian fraud government is clapping it’s hands for this agreement. Lets look at the big picture here. Why would the Candian government send our personal files to the US for nothing? This apparently simply saves the banks. The IRS is not about to be happy with sending demands for penalties and fines and get nothing in return. This is part of the USA’s future plans of confiscation. We need to see the USA for what it has become. They will abuse their power again and likely “bill” Canada for these fines and penalties. If American laws are allowed over the border, when will it ever stop? Those who have their personal banking info sent to the US really need to be worried. They have no protection from the Canadian government. The IGA proves that clearly. In our family, my wife is Canadian nothing else. If the USA wants to claim her for tax purposes, we’ll all meet in court plain and simple. Sorry Harper, we are a CANADIAN family here that will protect itself with or without your help. We will just use your resources against you when we get there!
None of us should accept a represenative of the federal government of Canada referring to duals as; “U.S. citizens who reside in Canada” as Kerry-Lynne D. Findlay, P.C., Q.C., M.P. Minister of National Revenue just did in that letter above.
Make that haunt her and the Harper government. When was the last time that a Canadian official referred to a child born in Canada as a “US citizen who resides in Canada”? Which is what Canadian children who merely inherited US status via parentage are being referred to in her statement. And for those who naturalized, many of whom have been Canadians for decades, it is a slap in the face to say that their oath of Canadian citizenship is considered by a Canadian MP to be subordinate to their US status – however obtained.
It is noteworthy when Findlay as the Minister of National Revenue specifically emphasizes the US tax status of Canadian citizens and legal residents rather than their CANADIAN TAXPAYER status?
WE are on Canadian soil. We are Canadian citizens and Canadian taxpayers. Therefore it is our CANADIAN status and CANADIAN rights that the CANADIAN Minister should be concerned with upholding first and foremost.
Findlay’s statements also acknowledge that they know of and have known about the substantial compliance burdens that the US imposes extraterritorially – even on those who owe no US tax. Her willingness to point to the Streamlined program as a panacea is then deliberately disingenuous given its well known shortcomings and exclusions.
She says: “Please note that the U.S. citizenship-based tax system has been in place for many years and is not altered by the recently signed intergovernmental agreement under the Canada–U.S. tax treaty.”
Yes, it has. All the more reason why she and her fellow Harper Conservatives are complicit in the current harmful situation we face. Because she is acknowledging that the problems with US punitive treatment and reporting and penalty burdens imposed on ALL CANADIAN registered savings accounts are well known to herself and the Finance Minister, yet they have done nothing to ameliorate that harm done to CANADIANS via the Canada-US Tax Treaty – and indeed have aggravated the obvious pre-existing harms and significant flaws in the treaty by signing the FATCA IGA – which builds on that already insufficient base. Tax treaties are supposedly designed to address and limit instances of double taxation. Ours leaves major areas open to pre-existing double US extraterritorial taxation of Canadians. It is unconscionable of Findlay and Flaherty and Harper to consciously and deliberately sign something which tacitly or explicitly lends legitimation to an extraterritorial act of another country imposed on Canadian citizens and residents which exposes them to harm – as the FATCA IGA does.
Findlay is a traitor to Canada and a US collaborator. She’s a lawyer. The letter and her informed and deliberate choice of phrases demonstrates clearly that she is also a US apologist.
“I understand that this situation creates unique challenges, including compliance burdens for U.S. citizens who reside in Canada or elsewhere in the world, even when they do not owe U.S. tax. Please note that the U.S. citizenship-based tax system has been in place for many years and is not altered by the recently signed intergovernmental agreement under the Canada–U.S. tax treaty.”
I believe this is something they’d rather we not raise in public and underscore. Particularly as counterpoint to the public letter that Flaherty originally designed for publication in US media in the fall of 2011.
@ badger
PLEASE send that to Findlay, if you haven’t already. “US citizens who reside in Canada.” That’s within a hair’s breadth of being as obnoxious as “US citizens habitually resident in Canada”. Makes me wonder if this woman is planning to leave government to make a killing working in the US tax compliance industrial complex. Why is it those who go through the magic revolving door never seem to get hit where they deserve it most?
@badger. Calling a Canadian Citizen a “US citizen who resides in Canada” is point blank racist.
I would never refer to a Jamaican who is a Canadian Citizen as anything other than Canadian.
If you have a Canadian Passport and live in Canada, it makes no difference if you are black, white, red, yellow, Baptist, Jewish, Mormon, athiest……….or from south of the border, you are CANADIAN.
Referring to a Canadian of ________ origin is RACIST.
@George
Great point. You don’t have to scratch very deep to find anti-Americanism in Canada. None of what’s happened lately is going to help.
The Canadian Bankers Association refers to us as “U.S. taxpayers who are resident in Canada.”
http://www.cba.ca/en/consumer-information/40-banking-basics/597-fatca-and-the-canada-us-intergovernmental-agreement-iga-information-for-clients-
@ calgary411
“US taxpayers who are residents of Canada.” Okay that tops everything. Outrageous! Middle finger to the CBA.
@Em GRRRR! I have never been a ‘US taxpayer’ regardless where I’ve lived, and I’m not about to become one. Damn I hate it that our US connection, whatever that might be, trumps all according the Canadian government, Canadian financial institutions as well as the IRS.
Why don’t they just start calling us US slaves resident in Canada? I am really, isn’t this what it boils down to?
@ WhiteKat
They did call us “US slaves resident in Canada”. They just used the politically correct, corporate approved, Orwellian dialectic, dodgy euphemism of “taxpayer”. Someday I hope to become a “former Canadian banking client” and they can take their “US taxpayer resident in Canada” and shove it.
I never heard of Eritreans being referred to as “Eritrean taxpayers resident in Canada” when forced by the Eritrean government to pay what the Canadian press referred to as a “diaspora tax” – a term I’ve yet to hear in reference to the US’s extraterritorial tax regime.
Why don’t we replace the term CBT with diaspora tax where we see fit? It may be more easily understood by the average person.
@ bubblebustin
I’m not sure everyone knows what diaspora means but the Eritrea’s diaspora tax is a tiny thing and the USA’s diaspora tax is a gigantinormous thing so maybe we should call it a “draconian diaspora tax”. I would be off the hook then because I am not diaspora by definition.
@badger
It sounds to me like the Canadian government would like to just wash their hands of the whole problem which they will in no part take responsibility for. Those retirement investments that will be exempt from reporting, but which the US still taxes us on should have been dealt with in our treaty. It’s too little too late, I’m afraid.
BTW, my lawyer believes that these investments will be dealt with in the next treaty negotiation. Why this isn’t a top priority, I don’t know.
I suspect this terminology is being spoon fed to Government officials by the US Treasury. It wouldn’t surprise me if they have some sort of boilerplate document that gives examples of the weasel words to be used when describing the FATCA situation in their own countries.
The New Zealand Minister of Revenue, Todd McClay, referred to New Zealanders (who are also so-called US Persons) as “US Taxpayers habitually resident in New Zealand”. I can’t think of anything I have heard from a politician in my entire life that has infuriated me more than that remark.
@all
I am a canadian taxpayer and a canadian citizen residing in canada. end of story!
@Mettleman, Exactly. Why complicate things with irrelevant details like place of birth?
@mettleman @WhiteKat
They are trying to give the impression that it only affects “Americans”, rather than their own citizens. When most people read this terminology in press releases or articles, it gives the impression that very few people are affected and that those that are, are somehow deserving of their status as “US taxpayer” and should have known of their obligations. In New Zealand, this is even being used as a justification for why there is no discrimination under the Bill of Rights (same as Canadian Charter). Unbelievable.
@osgood well since it only effects americans then they should keep it in america…. 🙂
osgood, referring to New Zealand Citizens in that manner is RACIST.