From broken man on a Halifax pier further to IRSCompliantForever, further to Tim’s comment, and including Chear’s comment re Elizabeth May in Parliament on April 3

The many mentions of FATCA in the House yesterday certainly deserve their own roundup post.

From IRSCompliantForever,

Go to the transcript found by Tim dealing with April 3 FATCA questions in Canada’s House of Commons.

Use your search and find to look for FATCA hits. I found 23.

Read all the good FATCA questions from the Opposition and the poor responses from representatives of our present government of Canada.

“This is outrageous. We are a sovereign nation.”

http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&Parl=41&Ses=2&DocId=6513111

Here is what I quickly pulled:

Elizabeth May, the House of Commons, April 3rd, 10:45 a.m.
Economic Action Plan 2014 Act, No. 1
http://openparliament.ca/debates/2014/4/3/elizabeth-may-3/
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Mr. Speaker, I want to thank the hon. member for Skeena—Bulkley Valley for raising the fact that one of the larger offences in all of the last number of years of omnibus budget bills is buried in this omnibus bill. This complex piece of legislation should never be put in an omnibus bill.
I have previously mentioned to the House Peter Hogg, one of Canada’s leading constitutional experts, who warned the Minister of Finance that this bill would violate the Charter of Rights and Freedoms.
I also want to draw the attention of the House to the opinion of Allison Christians, who is the H. Heward Stikeman chair in tax law at McGill, and Arthur Cockfield, a professor at Queen’s University. I want to put their opinion on the record:
The proposed Implementation Act and the IGA do not enhance the reciprocal tax information exchange between the United States and Canada, nor do they create a workable regime for Canada to enhance its international tax enforcement efforts going forward.
Further they state:
Instead, the Implementation Act and the IGA raise a number of serious issues ranging from likely Charter violations to violations—
April 3rd, 11:15 a.m.
Economic Action Plan 2014 Act, No. 1
http://openparliament.ca/debates/2014/4/3/elizabeth-may-4/
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Mr. Speaker, there are many complex aspects of this omnibus legislation. Certainly, even the title, FATCA, foreign accounts taxation and compliance agreement, is one of the most complex.
It certainly would, as the hon. member stated, affect people who have no idea whatsoever that they could be caught in this broad ambit of people who are considered U.S. persons, people like me who were born in the United States but have nothing to do with the United States, who in my case has never lived there as an adult, but purely as a Canadian citizen and renounced U.S. citizenship.
This could apply to me, or my daughter. Then the information is handed over to the IRS without our knowledge.
Now, I want to draw attention to the charter argument, specifically section 15 of the charter, which says “Every individual is equal before and under the law…”. As my hon. colleague mentioned, the leading constitutional law experts of Canada have said that this will violate the charter.
So, as with other legislation, it will get pushed through this place. As in the case of the Nadon appointment or with some of the mandatory minimum sentence laws that were passed, we have clear evidence that we are being asked, as parliamentarians, to push through a piece of legislation that would be offensive to our fundamental rights of equality under the law, under section 15. I ask for the member’s comments.
April 3rd, 1:05 p.m.
Economic Action Plan 2014 Act, No. 1
http://openparliament.ca/debates/2014/4/3/elizabeth-may-5/
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Mr. Speaker, I regret very much that the hon. government House leader decided to shut down debate. He made a speech and then, well I cannot remark on where he might be, questions are being taken by the hon. Parliamentary secretary.
The hon. government House leader had the gall to tell the House, on behalf of his constituents, that the government did not believe in big government. What is not “big government” about it asking the banks to root through the private information of Canadian citizens and turn that information, without their knowledge or consent, over to a foreign government? That is not just
big government, that is big brother government. This measure deserves treatment in something other than an omnibus bill that has limited debate time.
I will not be able to speak a full 10 minutes because with time allocation, debate never comes around to the smaller parties. This is both an affront to democracy and a violation of the charter, as well as further abuse of our parliamentary system.
April 3rd, 3:55 p.m.
Economic Action Plan 2014 Act, No. 1
http://openparliament.ca/debates/2014/4/3/elizabeth-may-6/
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Mr. Speaker, I thank the member for her very important speech.
They are sneaking these things in, as she said. This omnibus bill includes a lot of changes.
I especially appreciated her analysis of division 29, because that is one of the divisions that I have not yet read.
I have just one question for the member. How can we handle a bill as big as this one when we are facing such a quick process, which flies in the face of true democracy?
April 4, 2014, House of Commons Debate:
Mr. Nathan Cullen (Skeena—Bulkley Valley, NDP):
Now, let us get to the bad things that are in Bill C-31.
Let us start with the first one, FATCA. What a great deal it is that is buried in this bill. One would think that something like a major tax treaty with our most significant trading partner would have stand-alone legislation and its own debate. That is not so with the Conservatives; they bury it. When they bury something and they release it, as they did on a Friday afternoon when they released this bill, one can anticipate that there is something they do not want to talk about. We estimate that more than one million Canadians may be affected by this tax treaty. They are Canadians who do not even know they may be implicated by this by being married to an American or former American. They are Canadians who were born to American parents. Canadians who were born here may be implicated by this.
(1035)
What this deal would do is to tell the banks in Canada to release the private personal banking information of those Canadians to the Canada Revenue Agency, which then ably and quickly would pass it along to the IRS in the United States. Passing the private banking information of more than one million Canadians to the U.S. government somehow does not seem to bother the Conservatives. There were no consultations with the Privacy Commissioner. They told the Privacy Commissioner it was happening, but did not bother to find out if it went against privacy laws in Canada.
We do not know if this is even charter proof. Constitutional lawyers have said that this is a mistreatment of Canadian citizens and it will face a charter challenge. Again, there were no charter questions. The banks have estimated that to collect this information may cost upward of $100 million. Some have already spent tens of millions of dollars; it is hard information to get at. We asked the government how much it would cost it to wade through these millions of documents and pieces of banking information, and the government said it had no estimate, that it does not know what it is going to cost. The banks have said it would cost upward of $100 million per bank.
The federal government signed this treaty and did not bother to find out what it might cost the Canadian taxpayer. In addition, there is no reciprocity. There is no agreement with the U.S. to have some sort of equal treatment of Canadians. Canada is not a tax haven for American money. It has never been described as such. Why institute a tax treaty to go after tax cheats and tax havens that do not exist? Why forego the privacy of so many Canadians?
What fight did the Conservatives actually do? The Minister of Finance wrote an op-ed. He did, and it was strongly worded. He put it into a couple of papers in Washington, and that was it. Compare that with the government having spent millions of dollars toward lobbying the U.S. government on Keystone. It has spent millions on a full-scale frontal attack. The Prime Minister said that if the U.S. does not agree, this is a no-brainer, and we will wait the president out. Was this all that could be done in diplomacy?
We spent millions, and are spending millions of dollars on diplomats running around Washington trying to convince the Americans to create 40,000 jobs in the U.S. to add value to the bitumen coming out of the oil patch in Alberta. Who came up with that number? The Canadian government did, when trying to convince American legislators. Compare that full-on assault in trying to convince people in Washington to do something, to an op-ed, when they were standing up for Canadians’ rights. It is a no-brainer. This is bad policy to sell out Canadians at such a cheap level. There is so much more in this bill.

Mr. Guy Caron (Rimouski-Neigette—Témiscouata—Les Basques, NDP):
Mr. Speaker, I would like to begin by thanking the member for Skeena—Bulkley Valley for his excellent speech. This is his first speech on an economic topic since he was appointed official opposition finance critic. I loved his speech.
The question I wanted to ask was already asked, in part, by my colleague from Saanich—Gulf Islands. I would like to take that one step further. She talked about the constitutional issues related to FATCA. It is becoming increasingly clear in budget bill after budget bill after budget bill that the Conservative government’s process does not include enough preparation.
They rush their bills through with very little discussion, and they introduce bills, like the last one, with monumental errors. We took a stand against that and warned the government, in the Standing Committee on Finance and in the House of Commons, that the provisions to change the appointment process for Supreme Court judges would not get past the Supreme Court itself. The Conservatives did not listen to us.

Hon. Scott Brison (Kings—Hants, Lib.):
The bill also includes new rules around FATCA, the U.S. Foreign Account Tax Compliance Act. Under the bill, Canadians effectively are going to be doing the dirty work and becoming tax collectors for the IRS. Canada-U.S. dual citizens are going to be punished if they do not provide their U.S. tax number to the CRA.
If these Canadians provide their U.S. tax numbers, the Canadian government will hand over all this information, together with information on the Canadians’ bank accounts, to the U.S. This will help the U.S. collect tax on registered Canadian savings accounts, including RDSPs, registered disability savings plans; RESPs, registered education savings plans; and tax free savings accounts.
The other night when we were at the briefing by the Finance Canada public servants, they could not answer a very simple question, and that was whether the contributions made to RDSPs and RESPs by the Canadian government as matching grants would be considered taxable by the Americans. They could not answer that basic question.
It was never the public policy intention of RDSPs and RESPs to subsidize the American treasury. They are for helping Canadian families with members with disabilities and for helping young Canadians get good educations. Yet the Conservatives are incapable of answering that question. They have not stood up for Canadian interests during these negotiations.

Hon. Scott Brison (Kings—Hants, Lib.):
The bill also includes new rules around FATCA, the U.S. Foreign Account Tax Compliance Act. Under the bill, Canadians effectively are going to be doing the dirty work and becoming tax collectors for the IRS. Canada-U.S. dual citizens are going to be punished if they do not provide their U.S. tax number to the CRA.
If these Canadians provide their U.S. tax numbers, the Canadian government will hand over all this information, together with information on the Canadians’ bank accounts, to the U.S. This will help the U.S. collect tax on registered Canadian savings accounts, including RDSPs, registered disability savings plans; RESPs, registered education savings plans; and tax free savings accounts.
The other night when we were at the briefing by the Finance Canada public servants, they could not answer a very simple question, and that was whether the contributions made to RDSPs and RESPs by the Canadian government as matching grants would be considered taxable by the Americans. They could not answer that basic question.
It was never the public policy intention of RDSPs and RESPs to subsidize the American treasury. They are for helping Canadian families with members with disabilities and for helping young Canadians get good educations. Yet the Conservatives are incapable of answering that question. They have not stood up for Canadian interests during these negotiations.

I would like to speak again about something in this budget implementation act, and these are the measures regarding FATCA. The Conservatives want to actually turn Canadians into American tax collectors through this budget implementation bill. Earlier this year, when the Conservatives signed an intergovernmental agreement with the U.S. to implement FATCA, we had hoped that some of the concerns we had would be addressed.
Canada and the U.S. had previously achieved an agreement to exchange information on suspected tax cheats, but FATCA goes a step further than any other tax-sharing legislation has. It requires Canadian banks to give the CRA the account information of every U.S. citizen living in Canada. The CRA will then give this information to the IRS, and those U.S. persons will have to file taxes in the U.S.
The problem is that there are many U.S. citizens living in Canada, and they do not even know that they are considered Americans for tax purposes. These include any person born in the U.S. or born to an American parent, even if they have not lived in the U.S. since they were toddlers. The Canadian government has agreed to help the IRS find these individuals.
This will also affect Canadians who are not even U.S. citizens but are married to one, because their joint accounts will now be reported to the IRS. This is a remarkable breach of Canadians’ privacy by their own government. Not only will the CRA provide the IRS information with tax identification information and the account balances of U.S. persons without their knowledge, it will impose a $100 penalty for each instance of non-compliance. Why are Conservatives prepared to do Uncle Sam’s work in this case and potentially penalize Canadians with dual citizenship or their Canadian spouses?
U.S. persons living in Canada would be required to report and pay taxes to the U.S. on their RDSPs and RESPs. These accounts are supposed to help Canadians pay for education or help disabled Canadians avoid poverty. The Canadian government money was not intended to be used to subsidize the U.S. treasury. Why are the Conservatives allowing this to happen, when it so clearly is inconsistent with the objectives of RDSPs and RESPs?
The other night, as I mentioned earlier today, we asked the public servants at the briefing whether Canadian government contributions, the matching grants to RESPs and RDSPs, would be considered taxable by the Americans, by the IRS. They could not answer the question. The idea that we would sign an agreement when we do not know something as basic as this speaks to the way the government has lost influence, power, and authority in negotiating with the Americans.
The FATCA agreement is very important, and it should be a stand-alone piece of legislation. We should be doing a more thorough evaluation of the agreement the government has signed, and it should not be part of a budget implementation bill, an omnibus bill. Constitutional law experts such as Peter Hogg have raised concerns about whether the agreement violates the Canadian Charter of Rights and Freedoms. There are real issues around this that will be given short shrift through the process by which a budget implementation act, which is such a massive omnibus bill, has been given to Parliament.

Mr. Guy Caron (Rimouski-Neigette—Témiscouata—Les Basques, NDP):

Mr. Speaker, I thank my colleague from Kings—Hants for his speech. I have the pleasure of sitting with him at the Standing Committee on Finance. We have had a number of opportunities to discuss important issues there, including one that is in this bill.
I am talking about the FATCA agreement between Canada and the United States. It has to do with the United States going through Canada to collect taxes from people it considers to be U.S. citizens. I raise this issue not just because it is important, but because we have studied the issue of tax havens and tax evasion at the Standing Committee on Finance. Some, including me, believe that we only scratched the surface, while others believe we studied the matter at length. Even though I do not feel we spent very much time on this study, it was extremely intense because the issue is quite broad and complex.
At the Standing Committee on Finance, we will be studying this budget implementation bill in its entirety, so the committee might need several weeks to get through all the complexities of the FATCA agreement. Can my colleague comment on that?

Hon. Scott Brison:
Mr. Speaker, I really appreciate my colleague’s question.
Indeed, it is important for us to take a close look at tax havens and to implement appropriate measures. I do not agree with the government’s approach to the FACTA agreement with the U.S. government. According to experts, this agreement could violate our Canadian Charter of Rights and Freedoms, among other things.
I agree with my colleague from Rimouski-Neigette—Témiscouata—Les Basques that we should work harder with Canadian banks to develop an approach on tax havens. The overall capacity of our banks and their presence around the world should enable us to do more and to take more leadership on this issue. However, the Conservative government does nothing to address tax havens in its approach to FACTA.

Ms. Elizabeth May (Saanich—Gulf Islands, GP):

Mr. Speaker, there are many complex aspects of this omnibus legislation. Certainly, even the title, FATCA, foreign accounts taxation and compliance agreement, is one of the most complex.
It certainly would, as the hon. member stated, affect people who have no idea whatsoever that they could be caught in this broad ambit of people who are considered U.S. persons, people like me who were born in the United States but have nothing to do with the United States, who in my case has never lived there as an adult, but purely as a Canadian citizen and renounced U.S. citizenship.
This could apply to me, or my daughter. Then the information is handed over to the IRS without our knowledge.
Now, I want to draw attention to the charter argument, specifically section 15 of the charter, which says “Every individual is equal before and under the law…”. As my hon. colleague mentioned, the leading constitutional law experts of Canada have said that this will violate the charter.
So, as with other legislation, it will get pushed through this place. As in the case of the Nadon appointment or with some of the mandatory minimum sentence laws that were passed, we have clear evidence that we are being asked, as parliamentarians, to push through a piece of legislation that would be offensive to our fundamental rights of equality under the law, under section 15. I ask for the member’s comments.

Hon. Scott Brison:
Mr. Speaker, this speaks to the challenge of these omnibus bills.
We were denied the opportunity at the appropriate committees to consider all aspects of these changes in a more thorough, methodical, and thoughtful way. There are legal and constitutional issues to consider.
Members of the justice committee, for instance, ought to have been more engaged on the changes to the Supreme Court Act in the last omnibus bill, but instead we ended up getting into an embarrassing fiasco around Justice Nadon’s appointment. This was embarrassing not just for the Conservatives but our citizens as well.
There is some expertise at the finance committee studying FATCA, but there is also a need to work with other committees.
Parliament could be mobilized and engaged more thoroughly if we did not have these kinds of disparate measures lumped together in one budget omnibus bill.
I would agree with the hon. member.

Mr. Guy Caron (Rimouski-Neigette—Témiscouata—Les Basques, NDP):

Mr. Speaker, I would like to point out that the member who just spoke achieved something quite remarkable. We have before us a 350-page bill that will change, create and amend over 50 pieces of legislation. The member managed to speak for 10 minutes without even addressing one single aspect of the bill we are discussing in the House.
I know that the member’s riding is close to the United States. One item in particular is important in this bill, and that is FATCA. Many people in his riding who are Canadian citizens and do not consider themselves American could be targeted by the U.S. revenue service, according to which they might owe thousands or even tens of thousands of dollars because the U.S. government sees them as American citizens. Those people’s files could be transferred to the revenue service without their knowing it and could ultimately be subject to claims. Should that happen, those people will go to the member in question.
I would like to know what the member will tell the people targeted by the U.S. intelligence and revenue services about the fact that they might owe thousands of dollars that they do not think they owe to the U.S. government.

Ms. Peggy Nash (Parkdale—High Park, NDP):
Mr. Speaker, if I understand the minister of state’s argument, it is that the Conservatives are just like the former Liberal government, only on steroids. Is that his argument in defence of this action?
This omnibus budget implementation act, which follows a long series of similar bills, is over 350 pages and almost 500 clauses in length, and contains so many changes that have never been brought forward in a budget bill. I just want to highlight two that are of particular concern to so many of my constituents in Parkdale—High Park, and I am sure members are hearing this across the country.
First of all, with the changes around FATCA, a totally new bill is housed within Bill C-31 that would affect so many people who happen to hold Canadian-American citizenship, and is doing so without answering vital questions around privacy and what it would mean to people’s private banking information. We need to have a thorough debate on that.
…
My question for the minister of state is how can he justify suppressing the democratic right to debate such fundamental changes the Conservative government would make?

Hon. Kevin Sorenson (Minister of State (Finance), CPC):
Mr. Speaker, again, we did have the opportunity to listen to a number of speeches this morning from the government and the opposition sides. With all due respect, the opposition brought forward concerns regarding the FATCA agreement, which this member has talked about, and there are many people across Canada who are questioning exactly what FATCA is. Let me say that the agreement addresses those concerns.
The agreement addresses the concerns that Canadians had when the United States imposed certain regulations based on the treaties it has with many different countries. Consequently, this government responded very quickly and negotiated a very solid intergovernmental agreement, or IGA, with the Americans. It is an agreement that relies on the existing tax framework under the Canada-U.S. tax treaty.
CRA will not assist the Americans, it will not assist the IRS, in collecting U.S. taxes. Also, there are no new taxes being implemented through FATCA, and no new taxes that Canadians need to worry about. In our negotiations, we obtained a number of significant concessions that would not normally have been included, such as not including RRSPs in disclosure, not including RDSPs, not including tax-free savings accounts, and many others.
Again, FATCA is a policy that is here basically to safeguard Canadians.

Hon. Kevin Sorenson:
Mr. Speaker, I appreciate the concern of the member that I am answering questions. I believe it is an honour to stand in the House and promote the budget implementation act of 2014.
On this FATCA, without an agreement in place our financial institutions would still have had to comply with FATCA. That is the problem. It is not whether or not our financial institutions would have had to comply with the rule of law dealing with those American citizens who are abiding here in Canada. Every financial institution in Canada, except the very small ones, would have had to comply with the Americans, and if they did not, there would have been huge consequences to their being involved in the United States, to their activity in the United States. It would have required banks to report information to the IRS. Canadian banks would have been reporting to the IRS.
The agreement we were able to negotiate says that those financial institutions can disclose information on American citizens living in Canada and their finances to the Canada Revenue Agency, which is then responsible for moving the information forward.
If that had not happened, banks would have had to deny basic banking services to clients. That is one of the major concerns that banks had, that they would in effect have to say no to American citizens or those who may be dual citizens, saying that they could not do business in Canada.

Mr. Peter Julian (House Leader of the Official Opposition, NDP):
Mr. Speaker, I find it passing strange that the government House leader stood up and gave a speech, one of the few from the government side, and then promptly shut down debate for most of the government and most of the opposition members by putting in place time allocation measures, which means that most Conservatives and most opposition members will not have an opportunity to speak on the bill.
We might ask why, when it is a Conservative budget bill, the Conservatives would want to shut down debate on it. Here is one of the reasons: the foreign account tax compliance act, which is something that has been protested by a million Canadians of American origin in this country, Canadians upon whom penalties are being imposed unilaterally by the IRS.
The Conservatives said that they would stand up against this kind of unilateral action by the American government. In fact, I went to see the American ambassador myself, along with a number of NDP MPs, and we advocated strongly for those one million Canadians.
This Conservative government has sold them out. Basically it is shipping that information to the United States, even though there are constitutional issues and privacy issues.
My question to the hon. government House leader is simply this: is that why the Conservatives want to shut down debate? Is it because they are afraid of those one million Canadians finding out that they were sold out on FATCA?

Hon. Peter Van Loan (Leader of the Government in the House of Commons, CPC):
Mr. Speaker, I keep struggling with this issue, because it seems some folks have still not yet grasped our rules. Of course, time allocation is not used by this government to shut down debate, because here we are debating, which we will be doing tomorrow, Monday, and Tuesday. It is used as a scheduling device so that all members of this House can have certainty and confidence about when the debate will occur, and more importantly, about when the vote will occur and when the decision will ultimately be made. That is very important.
This is reflected in Beauchesne’s at page 162. I have referred to this point before, but the opposition House leader seems not to have grasped it yet. It is at paragraph 533:
Time allocation is a device for planning the use of time during the various stages of consideration of a bill rather than bringing the debate to an immediate conclusion.
There we have it in black and white, from one of those important green books that we rely on that tells us what the rules are.
There was an interesting observation today from one of the more knowledgeable observers of parliamentary procedure, who said this:
…the…bill will get a total of five days of second reading debate, which is pretty reasonable.
We have provided for ample debate, more debate than has often happened on many bills of this type historically, and I am very pleased to see that we are doing it in a fashion that allows full debate, but more importantly, lets decisions get made. That is what is important: that we make decisions, get things done, and do the job that people sent us here to do.

Mr. Mike Sullivan (York South—Weston, NDP):

The government has also promised transparency and accountability. Where have we seen that? Nowhere.
One of the things that is most frightening about this budget implementation bill is the attachment to FATCA. For those who do not know FATCA, it is the way that the U.S. government is going to tax some Canadian citizens, about a million of them. Some of them are accidental Canadian citizens, who have never lived in the United States in their lives. They were born in Canada, lived in Canada all their lives, and now are being told that they are somehow American citizens because of their parents.
The government has in this bill suggested that it will now be all right, without notice to the individuals, for the banks to give information about the RRSPs, RDSPs, RESPs, and other assets that individuals have, to CRA, for the purpose of giving that information to another country. One assumes that the reason they are giving that information is so that somebody can come and take that money out of their bank accounts.
This is outrageous. We are a sovereign nation. Canada is a country unto itself. The ability of this country to protect its citizens should include the ability against another country coming after those citizens’ money. I am talking about Canadian citizens here, not persons who are living in the United States and who are American citizens. Let the U.S. government come after them, but not Canadian citizens. We should not be assisting another government to manufacture a reason to come into a Canadian citizen’s bank and take that money. That is not something we should be doing, and it should not be in this budget implementation bill.
If we need to have that discussion, let us have that discussion, but let us not do it in a budget implementation bill.

Mr. Mike Sullivan:
Mr. Speaker, it is fitting that the member talks about rail safety immediately after the discussion about FATCA.
The minister has suggested that the reason for the change is to make it quicker for her to change Canada’s rail safety regime, and to change it without consultation and discussion, to harmonize it with the U.S.
We live in Canada; we do not live in the United States. It is true that the rail networks cross the border, but I would like to think that the Canadian government would want to protect its citizens in a way that is at least as good as they are doing today, not water it down to make it amenable with some U.S. regulation.