My advice I would get moving on submissions this weekend. I did talk to the committee clerk who said there is no formal deadline but the sooner the better will be better for them.
2. Subject-matter of Bill C-31, An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures. Part 5 (Clauses 99 to 101)(FATCA)
Witnesses
Department of Finance Canada
– Brian Ernewein, General Director, Tax Policy Branch
– Kevin Shoom, Senior Chief, International Taxation and Special Projects
– Ted Cook, Senior Legislative Chief, Tax Legislation
Anybody understand these twitter comments, and subsequent exchanges?
https://twitter.com/taxpolblog/status/460928681016578048
https://twitter.com/Justin_Ling/status/460859840026664962
“Garneau up on a fascinating point of order. He says FATCA, which enables Can-US info sharing for tax purposes, hasn’t been approved by House “
I hope people are willing to send their submissions to the Senate or to Finance Canada to the Finance Committee of the House of Commons.
My request for copies of the submissions that were sent to Finance Canada will probably not be filled until after the Act is passed. On Sunday, I sent Anne Frank’s proposed amendment to the Clerk of the Finance Committee (as suggested by Nathan Cullen).
I also sent copies of my submissions of March 2014 and November 2012, Christians-Cockfield and Richardson-Kish submissions and Hogg letter. I copied all members of the Finance Committee on that.
Here is the response I received from the Clerk:
I have written back and asked where the Finance Committee asked for submissions. I have also expressed my dismay that they won’t review the well researched submissions by Christians, Cockfield, Richardson and Kish because they are over five pages. I also pointed out both of my submissions and Peter Hogg’s letter are all under five pages.
So, if Finance Canada won’t give the members of the Finance Committee your submissions, why don’t you give them to the Finance Committee yourself?
You should send your submission to the Clerk of the Finance Committee with copies to the members of the Committee. You don’t need to reinvent the wheel. Send them your original submission to Finance Canada or your submission to the Senate. If that was over five pages, send a shortened version.
Here is the Clerk’s e-mail address:
FINA@parl.gc.ca
Here are e-mail addresses for members of the Finance Committee
murray.rankin.a1@parl.gc.ca
nathan.cullen@parl.gc.ca
scott.brison@parl.gc.ca
james.rajotte@parl.gc.ca
shelly.glover@parl.gc.ca
mark.adler@parl.gc.ca
cathy.mcleod@parl.gc.ca
guy.caron@parl.gc.ca
randy.hobak@parl.gc.carandy.hoback@parl.gc.ca
raymond.cote@parl.gc.ca
brian.jean@parl.gc.ca
dave.vankesteren@parl.gc.ca
Keep them under five pages or they won’t be accepted!
The Commons Finance Committee is in session re C-31 right now. So far, they are talking about Part I – there are 90 mins to go and I am doubting they get to Part V today. I’ll check in later and see what progress they are making. All the “usual suspects” for Finance at the table testifying. Link for live broadcast is:
http://parlvu.parl.gc.ca/Parlvu/TimeBandit/PowerBrowserLive_SilverLight.aspx?ContentEntityId=11704&EssenceFormatID=508&date=20140501&lang=en
They are starting Part V now. They have about an hour available for it – sending other officials home to devote rest of time for Part V
Thanks for the heads-up, Anne Frank, and what I missed, Blaze. I’m back in time to tune in.
Committee finished for the day at 5:30 (gave the issue about an hour). Not a whole lot of substance different from yesterday. Ernewein did almost all of the responding. Rankin (NDP) and Brison (Lib) did most of the questioning and were pretty sharp by and large. Certainly much better prepared and more probing than the Senate. Some noteworthy differences or nuances from today vs yesterday in the Senate:
– Gerald Keddy (think he is from NB, but didn’t check) seemed completely confused and was having a “senior moment”. He asserted (completely wrongly – but not challenged or corrected by Finance) that this only affects US citizens in Canada and not Canadians; that most Americans he knows have been filing for years and “paying tax on their US investments” and that Americans living here they have some hard thinking to do and can renounce if they want and “this protects privacy”. In the space of 60 seconds he demonstrated such profound ignorance and such dexterity in being absolutely wrong that I think he deserves a medal. If anyone on this site actually has this fellow as an MP, you may wish to light up his email inbox with some hearty indignation to say nothing of setting him straight on the fact that the almost ALL “US Persons” are actually Canadians upon whom the US bestows the ineffable benefits of citizenship with or without their consent, that renouncing does little except give open them up to crippling fines and penalties, that less than 5% of non-resident Americans have ever filed tax returns and the IGA is all about the US borrowing the CRA’s powers to locate and tax the 95% of “silent” Americans the IRS knows nothing about (and wouldn’t but for CRA’s violation of their privacy and equality rights via the IGA). Lastly of course the IGA does not protect privacy, any more than working in a brothel protects chastity.
– Ernewein continues to spin the apocalypse tale of 30% withholdings if we didn’t have a deal but never mentions how utterly impractical that would be for the Americans to impose unilaterally, how Canadian banks could withhold an equal amount from US banks to offset and how because of all of this, the US was very unlikely to actually impose the threatened sanctions which violate NAFTA. To his credit he was blunt in saying that this was imposed by the US and made little effort to tout the marvellous extra benefits we got vs the rest of the world beyond saying we got more account types excluded
-discussion of legal opinions. He did not say that they actually have one just that it is Justice’s problem and they have looked at it and they are assured they are OK with this. Rankin asked a direct question of examining the unequal treatment of dual citizens and Ernewein said he couldn’t speak to it.
– cost estimates: CRA will spend $5.7mm then about $750,000 per year thereafter in compliance with the IGA, he refused to guess what bank costs would be (Rankin noted these are passed along to consumers – would be nice if he mentioned the tax deduction of those costs is passed along to Canadian taxpayers as well!)
– Rankin was very aggressive in questioning on the basis for violating privacy. Ernewein admitted no ruling by Commissioner – their legal advice was that FATCA did violate Canadian privacy laws but that if we did it under a statute approved IGA, that is an exception. Rankin was pretty taken aback considering the quasi-constitutional nature of privacy laws. He has been well briefed – Joe Arvay may want him by his side when he argues!
– there was an exchange that was clearly directed to our own Calgary411 and her RDSP issue. Interesting admission – Finance said that neither they nor the US Treasury people had ever considered the issue when negotiating FATCA and it had only just come up. He thought the correct answer should be that Canada’s contributions would be taxed by the US at the same time as Canada taxes them – on the point of withdrawal. That did not exactly assuage Mr. Brison since that only means the US taxes Canada’s payment later, but I suspect that Calgary411 can apply for a tax refund if the opinion Ernewien attributed to US Treasury is accurate (no tax payable until funds withdrawn). Fair to say that nobody int the room, including Ernewein, understood the issue. The US does tax earnings in most of the registered vehicles unless waivers obtained and waivers not available for all types.
– Brison asked an excellent question about what the appeal process is if somebody doesn’t think they are a US Person. Ernewein said that that was a matter between the FI and the customer. Too bad Brison didn’t follow up since of course the FI is not the one who discloses: CRA is. that is the WHOLE POINT of the IGA shuffle. It’s not a breach of privacy if CRA gives the same information to the same person (the IRS) but it is if the bank does it. Alice falls through rabbit hole here.
– I think it was Brison as well who asked about protections of privacy once in the US. Ernewein admitted that there is nothing Canada can do, it is all about whether we trust the US and we believe that we can trust our treaty partner. He did not get into the fact that there is Homeland Security, Patriot Act etc, that the IRS is not getting approval from Congress and this has no status.
– fairly frank admissions of lack of reciprocity but Ernewein game sought to defend the idea that some of this could be helpful for Canada eventually (I can’t believe nobody pressed them on the extreme lack of progress in getting reciprocity to happen and the low prospects for this administration of ever getting it).
Those are my rough notes delivered more or less “as is”. There will be a transcript at some point. They are back at it next Tuesday morning, but our show won’t come up till the second hour (a Ministerial statement will be first up).
In summary, i would say the opposition are putting on a better demonstration of having done their homework than the Senate. The Conservative MP’s on the Committee to this point appear to be by and large a cheering section for the hard work of the bureaucrats whom we cannot thank enough, etc etc. No talk of a proposed amendment – not sure where in the Committee process that comes up, but I think it is later.
Thank you, Anne Frank, everyone for your coverage of the session.
I was thinking about my MP, John Weston’s letter to me and how he said that he consulted with a number of tax experts in the US about FATCA. Maybe he should have talked to people who actually care about Canada for a start, not people who couldn’t give a damn about Canada’s sovereignty an d the rights of its citizens.
Those who dismiss the devastating impact this will have on a great number of Canadian families like Gerald Keddy did really irk me. I hope there’s a constituent of his here who can give him an earful.
@Anne Frank: Thanks for that excellent assessment. Your view of it is very similar to mine, but you are much more comprehensive and analytical.
I thought it was Rankin who asked the privacy question about what happens after information goes across the border and Canada no longer has control of it. BE’s answer “We trust our treaty partner.” Well, that’s not exactly reassuring.
I was blown away by BE’s response cavalier dismissal on the privacy issue: Oh, well, we just changed the law. No big deal.
I don’t know if you are aware of this or not, but Murray Rankin is a former law partner of Joe Arvay, so I would hope he knows his legal issues well!
Clarification from my US tax lawyer this morning re RDSP (RESP):
The answer to your question is a bit nuanced.
1. If the sponsor of an RDSP (or RESP for that matter) is a US person then (US person analysis of the beneficiary is irrelevant):
a. The income generated by the RDSP is taxed to the US person sponsor currently as it is earned
b. The grant is taxed to the US person sponsor when it is distributed to the beneficiary
c. US person sponsor must file 3520A annually
d. US person sponsor must file 3520 annually
2. If the sponsor of a RDSP (or RESP) is NOT a US person, AND the beneficiary is a US person then:
a. The income generated by the RDSP (RESP) is taxed to the US beneficiary currently as it is earned
b. The grant is taxed to the US person beneficiary when it is distributed
c. US person beneficiary must file 3520 annually (no 3520A)
Neither RDSPs nor RESPs are covered by the Treaty.
@ calgary411
That emphasizes some misperceptions and maybe some misdirections from the HofC Finance Committee hearings doesn’t it. Scott Brison tried to dig into this area but all he got was a pile of muck. At least it seemed so to me — very confusing and obviously they didn’t do a good job of “negotiating” regarding these things. According to your US tax lawyer the form filing goes on and on and in the end Canadian taxpayers’ money does go to US coffers. This is not tolerable. I’d say this is not nuanced — it’s nonsense. The USA needs to butt out entirely where Canadian registered savings plans are concerned. YOUR SON IS CANADIAN and you are right to resist and reject both his entrapment and your tax form enslavement.
@Em regarding Calgary411’s position opinion from Lawyer:
This illustrates entirely the bogus nature of the so called explanations from BE in the Finance Committee hearing yesterday ( and any day we get a response from our “representatives”)
I was disgusted by the cavalier way BE stated that privacy laws would be overridden and his body language made it clear he considered that no big deal. And I would suspect that the prospect of filing forms forever as the lawyer has stated is ok with him too. Not to mention the unbelievable assumption of taking from you, Calgary411 from BOTH ends of the transaction FOREVER until there is nothing at all left.
From an investment vehicle in CANADA touted by our government as a great way to save for ourselves or our loved ones!
My sense is that BE KNOWS full well the privacy issue is big and they intend to do an override or an end run. I know many of these guys went to DC to get ‘guidance’ and it sure looks like it because it is the same kind of end run around Charter of Rights that US Admin is doing around the Constitution.
Somebody should make it clear to BE that the IGA agreement signed is NOT a treaty, nor is it seen in the US as legitimate as IRS has NO authority to negotiate or sign ‘treaties’. The IGA is simply the enforcement mechanism enabling the IRS to implement FATCA because it is UNWORKABLE otherwise, not to mention illegal.
Yes, illegal. Intrusions of privacy and individual rights without warrant is a violation of the 4th Amendment ( the case for which is repeatedly made by Sen Rand Paul and others like Jim Jatras) In order for this kind of information to be obtained and shared with law enforcement, IRS, FBI or any government agency they MUST go before a judge to establish probable cause to obtain a warrant.
As well as a violation of the Charter of Rights in this country.
I cannot think the government does not know this.
That they negotiated an IGA with an illegal entity for an illegal implementation of a law to protect the banks and send innocent citizens and residents into the maw of the beast breaking every foundational law in both countries and the world to do it. Not to mention allowing the banks to use third party entities to do the dirty work the banks either do not want to do or find distasteful or expensive to do.
ALL they had to do was to say NO. That simple action would have seen FATCA fall like dominoes. I do not know if it is they have no spine. Have no sense of duty to their country or it’s citizens or respect for it’s sovereignty. Or ‘just following orders’!
Yet, there are still things they can do to protect not only the innocent individuals this is aimed at but the entire financial future and sovereignty of their nation.A simple amendment to protect Canadian citizens and Canadian Permanent Residents as the Charter protects would suffice.
But the complete renunciation of FATCA at all in any way would be preferable.
Will they be seen as heroes or collaborators?
Right now they look mightily to me like collaborators. Bank Bail Ins last year in the budget and FATCA and IGA in this years budget. Yes, indeed the banks get the protection and allegiance our leaders owe to us.
Those who voted them in to work on OUR behalf to serve and protect OUR lives and laws and way of life.
@FuriousAC
So what our dinosaur duo (and that has more to do with mindset than with age) McCain and Levin are trying to do by halting IGA negotiations with Russia is to embark upon something illegal, or is all fair under the ‘sanction’ banner?
And while we are at it another observation from yesterdays Finance Committee hearings:
BE and others take great pains to emphasize that the poor banks would have been subject to ‘30% withholding’. Really? Without recourse?
What, no reciprocity? No , of course no reciprocity. NO US bank will tolerate what the IRS is demanding from banks around the world. Without this reciprocity FATCA is unworkable and the US knows it and so do the banks in the US.
A lot has been made of the stability of the Canadian banking system having taken Canada through the crisis of 2008 and coming out the other end smelling like a rose. Well maybe and maybe not. Banks in that instance got a 25 billion bail out from our government ( meaning US the Canadian taxpayer) and they continued to do business with and taint themselves with the toxicity of the banking practices in the US. And now they want protection from the government and are happy to use every individual in the country as the sacrificial lambs to this slaughter?
It would appear we know and can see where our government loyalties lie and it is not with it’s citizens or the stability of the country as a whole.
For if FATCA is implemented it will be the end of financial stability and sovereignty forever. And what then does it say about our leaders and members of parliament who have the majority control of the government of the day. What then, will history say about them?
I know what I say today and it is not complimentary!
CBC Jian Gomeshi, May 2, 2014: Alison Loat and Michael MacMillan, founders of the non-partisan think tank Samara, talk to Jian about their book Tragedy in the Commons. They conducted 80 exit interviews with former MPs of all political stripes, and discovered some commonalities about the way politics works — and serves the public — in Canada.
Amazon.ca: MPs speak out in “Tragedy in the Commons”
From the article:
“What the MPs talked to us about was not entirely what we thought,” MacMillan said, adding that the politicians spent time “describing concerns that they had with their own political parties, and specifically with the leadership in their own political parties.”
The responses were “overwhelmingly consistent” across all parties, and regardless of geography: Concerns about the nomination process, how politicians were induced to behave or “perform” at question period, and a dispossession of their own personal power once they arrived in Ottawa.
“A couple things surprised me,” Loat said. “The consistency — that shocked me.”
But the second surprise “was the degree to which they blamed their own political parties for things,” as opposed to pointing fingers across the aisle.
“If MPs are feeling so uncomfortable in political parties, should we be surprised that so few citizens are involved in those organizations anymore?” Loat said.”
And there we are: What we suspected is certainly confirmed. It matters not which party is in power, they would ALL behave the same way in herding MPs into doing what they find politically expedient to retain power and this is their overriding concern. NOT the business of the nation and taxpayers to whom they owe their servitude.
Which is specifically why we are in this mess. We had and have expectations and they have not been nor are they met at even a rudimentary level.
When something as important as FATCA and IGA implementation is concerned it shines a glaring light on one simple thing: Majority government is a bad thing for Canadians. Minority governments are far more willing and able to listen to and adhere to the instructions from Canadians via their elected MPs. Something I thought the Conservatives had learned . Maybe they have, only too well!
bubblebustin: “The illegal we do immediately. Unconstitutional takes longer.“ (Henry Kissinger)
Levin, Mccain, et al don`t care about pesky little things like laws and constitutions that get in the way of what they want to do. Consider the answers to questions at Canada`s Finance Committee yesterday. Enough said.
@Blaze, I used to think McCain was a really good guy. But when he ran for President I saw a whole other side to him. He seemed to be such an angry little man. American war hero beaten by an almost unknown black man for the highest office in the land. I wonder how many things McCain broke in his house when he lost.
And McCain’s wife is very pretty but she always had a glassy eyed out of touch look about her. I wondered if she was taking drugs when she gave speeches while McCain was running for President. She was not at all warm and fuzzy like Laura Bush was.
McCain is probably a Canada hater. Who hates Canada? Really angry people who hate their own lives.
@Bubblebustin:
What do the dinosaur duo prove by their desire to punish Russia for by implementing illegal sanctions regarding withdrawing negotiations for the IGA.
Personally I do not think Putin cares about negotiating with a criminal organization like the IRS and laughs in the face of them and the likes of McCain and Levin ( McCain has proven himself to be unworthy of Senator from Arizona and I now think of him along the lines of what I think of Reid and Schummer. ) Levin too. Dinosaurs for sure and they are fighting for retention of their privileges in Congress while betraying their oaths of office by what they are doing in Ukraine against Ukraine and Russia. They are trying very hard to start WWlll so they can continue the printing of money and prop up the petro dollar to infinity.
We need to know just what is going on in this world. Not just for our own salvation as a nation but for the salvation of ordinary folks like us around the world. Enough with wars already. The Financial war is where they aim to win and a hot war will accomplish it for them. Again, US needs to say NO just as Canada needs to say NO. No to war. No to FATCA and any IGAs
Government in US and Banks are rife with fraud and corruption. We need to sever ties immediately on all fronts. If we don’t we will be like a little dingy towed under by the sinking of the Titanic.
I too thought well of McCain. But the 2008 election cycle , his behaviour during at at the loss as well as what he condoned while he was running was suspect to me at the time. ( such things as abandoning Michigan and refusing to campaign there) suspending his campaign to go to DC when the ‘crisis’ hit. None of these things impressed and since then, very little else. I have watched him closely and he represents to me an old guard Pubbie who thinks more of his own welfare than that of the country. Simply is not to be trusted in my opinion. OR Lindsay Graham and John Boehner. They go along to get along to make sure their backside and careers are protected. Not a fan any longer. Then again we have been Conservative supporters for many years here in Canada and look where than has gotten us all.
I always thought McCain’s wife should be in a wax museum.