As Blaze pointed out on Sandbox, and as I don’t at the moment see elsewhere here on Brock, the House of Commons Finance Committee met today from 3:30 through 5:30 today. Most of the second half of the meeting was taken up by the FATCA IGA, with questions of Finance officials (Shoom and Ernewein) mainly by the NDP, with softball lobs by Conservative members.
I’ll repeat here the comment I posted on Sandbox. I’m not going to subscribe to or respond to any replies to this; I just want to call everyone’s attention to the meeting, how to download a video clip of the entire meeting, and how important it is for Canadians affected by the IGA to watch, listen carefully, and reflect carefully.
I was able to download the two-hour video clip of this meeting at this web link
May 1 Finance Committee meeting
It isn’t quite obvious, but at this link directly under the General Information tab slightly down the page, there is a little link named “Play, Download or Subscribe.” If you click on that, a box pops up which lets you download an audio clip, a medium-res video clip or a high-res video clip in English or French, of the entire meeting. You can also view it on screen without downloading, but I recommend downloading to your desktop and then double-clicking the file once downloaded; in Windows, Windows Media Player will launch the clip. The FATCA (“Part 5”) discussion begins at 1 hour 5 minutes into the meeting (slightly more than halfway through) with Ernewein and Shoom as Finance witnesses (the former did most of the talking). The remainder of the meeting focused on FATCA. The meeting adjourned until, if I understood correctly, next Tuesday when the committee will reconvene with the Minister of Finance for an hour and then a resumption of questions on Part 5 (FATCA IGA) and then eventually some issues in Part 6 of the omnibus bill.
I think it is important to pay attention to this video, because it makes very clear how the government will reply, both in Parliament and I suspect in court if it comes to that, regarding the privacy and charter issues. The NDP pressed these issues very persistently, but the Conservative and Finance spokespersons responded in a way that gave me an inkling of some of the reservations that I suspect Joe Arvay may have raised in his legal opinion about how this might unfold. I’m not convinced the charter issue is going to be a slam dunk; it certainly is going to be an intricate and prolonged debate.
I won’t presume to summarize what was said, everyone can view the video and draw their own conclusions. Listen carefully to what is said, and how it is said, in particular in contemplating how you want to proceed for yourself and your family if you’re an affected so-called US person.
Also note that the Finance spokespeople made it very clear (once again) that CRA is NOT going to be collecting IRS penalties or tax liabilities against Canadian citizens. They made it VERY clear however that Canadian residents who are US citizens and who are not Canadian citizens may very well be collected against as a result of information provided under the IGA, if the IRS comes back to CRA with claims against them for specific tax liabilities (not penalties however).
I think all affected persons need to pay attention to the video I link above, and reflect carefully on what is said in it. Also it’s important to tune into the committee’s next meeting, which I THINK the chair said is next Tuesday, though it’s not on the meeting schedule yet.
Thank you for the link and instructions. It’s Kevin Shoom, but I had fun imagining him as a fungus.
A prolonged fight will result in a lot of public attention to the sovereignty matter – I don’t know how the government can come through this smelling like a rose, throwing gobs of taxpayers dollars against those who are fighting to preserve Canada’s sovereignty.
@bubblebustin Oops. Believe it or not, the Shoom/Shroom Freudian slip was unconscious on my part.
BTW unless I tuned out at an inopportune moment, the word “sovereignty” never was mentioned in the clip. Not that I remember. Maybe on Tuesday.
@schubert1975, there’s been a lot of that going on around here lately (ex. Blaze’s Canaans/Canadians slip when describing the senate committee today)
Thanks for the link.
Unfortunately, our government is leaving itself open for a pretty daming crticisim here.
The opposition can say that it is time to call a spade a spade. The US threatened to impose 30% sanctions that would have potentially barred Canadian banks from the US market unless Canada delivered the name, address and bank account balance of every single Canadian citizen with US links.
“GIve me your widows and orphans or I’ll shoot these bankers” said Uncle Sam. Canada, not appreciating Mel Brooks’ “Blazing Saddles” sense of humour decided to give them what they wanted rather than find out if they were bluffing. That statement is undeniably 100% accurate.
Cynics might suggest that the rights of a million average citizens did not weigh as heavily in the balance as the commerical interests of six chartered banks, but that’s why they are called cynics.
The real story is that Finance judged that MOST Canadians, including dual citizens, would probably be unaffected. They are not all wrong. The minority that may have accidentally used a passport for ID when they opened their first bank account in Canada or who didn’t use the six month notice period to move their bank accounts will be sacrificed to the Americans to save the commercial interests of our banks. Little matter that the ones who will be sacrificed to save the banks will be those not alert enough to protect themselves by moving accounts etc. In other words, average Canadians with unlucky ancestry. I guess maybe the cynics aren’t all wrong.
Thanks for the link. For Macsters you need Flip4Mac to play wmv files.
I just finished watching this video and had to send “Questions For My MP” to Gerald Keddy along with this preamble:
Dear Mr Keddy;
I just watched your performance at the Standing Committee on Finance and to say I was shocked and insulted would be an understatement. Even though I do not live in your riding, as someone who has been a Conservative supporter my whole life, I believe that I deserve some answers to the questions I posed to my MP in the email that follows. I am disgusted that this FATCA IGA is hidden in an omnibus bill subject to a confidence vote. Should the Conservative party continue to pursue this folly, it will lose my support, hopefully along with one million other “US persons living in Canada” (as you referred to me today) and their families. Mr Armstrong did not answer these questions, I would ask that someone in your party have the courage to do so.
Sincerely
Canadian Cop
@CanadianCop – if you get a second, can you copy the email that you attached?
His performance was bloody insulting. As insulting as it was, I think it was due more to his own embarrassing lack of understanding. He appeared sincerely to believe that this whole mess is all about a bunch of landed immigrants (I know, an old phrase) stubbornly holding on to an old passport. He might even be able to be turned – or at least have some doubt sown in his mind – were it to dawn on his ill-informed little mind that we are talking about 1 million CANADIANS, many of whom are BORN IN CANADA who the bill proposes to sell out to the threats of the Americans. He is probably too closed minded to grasp it, but if you actually manage to get through to him, we might get another crack in the armour that we can use down the line….
@CanadianCop, good for you! I am still seething after watching today’s dog and pony show.
I and I am sure most here agree, Canadian Cop, on being called “US Persons living in Canada” is a gross insult to us.
I said in my first submission:
I (and on behalf of other US Persons in Canada to whom I have spoken), who am (and we who are) CANADIANS but now referred to by the Harper Government as “Americans who happen to live in Canada*” or “US taxpayers resident in Canada”, request your prompt review of this submission.
…
*Many of these Canadians chose to become naturalized Canadian citizens, for myself in 1975 — they ARE Canadians.
*Many of these Canadians were born and raised in this country, never registered with the US, never lived or worked in the US, never had any benefit from the US — only Canada. One of those (and many just like him) is my 40-year old son (and other Canadians) born in Canada to US citizen parents. My son happens to have a developmental disability and, as he would not understand the concept of “citizenship” (as in US citizenship-based taxation), he cannot renounce his so-called automatically acquired U.S. citizenship at a U.S. Consulate and further must not have the influence of anyone else to do so. The U.S. Department of State / U.S. Consulate regulation is also that for a person with a ‘mental incapacity’ (which would also include someone with age-related dementia), a parent, a guardian or a trustee for that person does not have the RIGHT to renounce U.S. citizenship on that person’s behalf, even with a court order. This segment of Canadians is ENTRAPPED into U.S. citizenship and will have, yearly, the responsibilities and cost of administration for U.S. tax returns and account reporting each year at great U.S. professional tax accounting (and often U.S. tax law) expense. They ARE Canadians.
*Many of these Canadians were born in the U.S. to Canadian parents, returning to Canada as infants with their parents days later, or as children. They have always been and what should only be – Canadians.
@Anne Frank
Here is the attachment. I sent it to my own MP some time ago, but did not get an answer to the questions:
Dear Mr. Armstrong;
In 1958, my Canadian parents crossed the US border and attended the nearest “maternity home” where I was born before we all returned home to Canada. Since that time, I have never lived, worked or voted in the US. I have always lived, worked, voted and paid taxes in Canada. I also bank here, where I continue to live.
As someone who has voted for you in the past, I would request that you answer the following questions, the answers to which will determine if I ever vote for you again:
1. Do you consider me to be a Canadian who was born in the US, or a “US person” who lives in Canada?
2. Based on the fact I am Canadian, have always lived and worked in Canada, and do all my banking here in Canada where I live, do you consider my bank accounts “offshore” and the business of any foreign government?
3. According to the Master Nationality Rule, a Canadian living in Canada is only Canadian. Do you believe this, or do you believe that a Canadian living in Canada can also be American or Eritrean, and thus be subject to the laws of those nations while in Canada?
4. Do you believe that might makes right (i.e. that the US can do what it wants inside Canada, because of its might, but Eritrea is not allowed to do the same thing) or that Canada should stand against all foreign marauders?
5. Do you support the Canadian Charter of Rights and Freedoms and its guarantees to protect people from unlawful search and seizure and to not be discriminated against based on national origin?
6. Do you support the FATCA IGA, which assists the IRS in a fishing expedition which, while allegedly aimed at tax cheats, will actually result in a massive by-catch of honest, law-abiding Canadians (and we know what becomes of the by-catch on a fishing expedition)?
7. If you answered “yes” to 5 and 6 above, how do you reconcile that, considering that the IGA violates the protections guaranteed in the Charter?
8. Do you honestly believe that there will ever be reciprocity, when all the US is promising to do is “to pursue legislation to provide reciprocity” or do you accept that Canada will get nothing from this except to maintain the status quo (i.e. avoid economic sanctions)?
9. Do you believe that Canada is a sovereign country, and should not acquiesce to the extortionist demands of foreign powers?
10. Would the Conservative government be so quick to sign an IGA that violated the Charter rights of any other group except “US persons”, or is the political calculus that Americans are unpopular enough that trampling on their rights will have little political fallout?
11. When the enabling legislation for FATCA is tabled, do you intend to support it or to take a stand for Canadian sovereignty and the Charter rights of all Canadians?
Thanking you in advance for your prompt reply.
Canadian Cop
@CanadianCop: I’d forgotten how much I loved that email. Clearly that Keddy fellow has either never actually read the legislation he is meant to be voting on or simply doesn’t understand it. Our tax dollars hard at work.
10. Would the Conservative government be so quick to sign an IGA that violated the Charter rights of any other group except “US persons”, or is the political calculus that Americans are unpopular enough that trampling on their rights will have little political fallout?
Wow. Bang on. I planned to never say this here, but surely many Brockers have lived in Canada long enough to notice that a significant percentage of Canadian Pride is simply in “not being American”. No offence intended.
Canadian Cop, I don’t know if you were being facetious with this item, but I’d bet many burgers and beer that this idea was discussed by the government.
My husband was born in Canada and is a US citizen through his father. I was born in the US, also reside in Canada, and am considered a Canadian citizen at birth through my Canadian born mother. My husband has never lived in the US, and neither of us have ever worked there. Now tell me how we’re to be considered as solely Americans living in Canada.
@WhatAmI
“Would the Conservative government be so quick to sign an IGA that violated the Charter rights of any other group except “US persons”, or is the political calculus that Americans are unpopular enough that trampling on their rights will have little political fallout?”
The answer to that question is easy.
1) Imagine the response to a Canadian law that diminished the rights of Chinese-born Canadians being created in response to demands from the Chinese government.
2) Within the enabling legislation, simply substitute “unambiguous indicia of Chinese place of birth” where ever the legislation requires banks to seek out “…U.S. place of birth”
3) Imagine the outraged response to such a law – from the Chinese-Canadian community, human rights groups, and the Canadian public in general.
NB: There actually were Canadian laws almost 100 years ago that specifically singled out the Chinese. The Chinese head tax was a fixed fee charged to each Chinese person entering Canada. The head tax was levied after the Canadian parliament passed the Chinese Immigration Act of 1885 to discourage Chinese people from entering Canada after the completion of the C P Railway. It was a disgraceful episode in Canadian history and in 2006, Harper offered an apology and compensation for the head tax once paid by Chinese immigrants.
Will there be similar apologies in the future to U.S. born Canadians?
@bubblebustin, You aren’t. Its just a way for them to justify their mistreatment of you. Since you are an ‘American living in Canada’, you cannot expect to be treated as well as a ‘Canadian living in Canada’.
As someone, most likely a ‘Canadian living in Canada’, told me recently over at Garth Turner’s blog (where I still try to get my FATCA digs in whenever I can.): “You are a dual citizen. Deal with it”
@CanadianCop They have been insulting my wife’s Canadian citizenship the same way. Nest thing they will do is say that I am not a “complete” Canadian even though I am born from this land and a registered Native… sheesh!!
Regarding Gerald Keddy, he has been an MP for many years, but I doubt many Canadians have heard his name. I live in the Maritimes, and even locally, he’s rarely mentioned in the media.
There are many Canadians with U.S. connections in his riding, so he should know better
One last comment from me:
I’m going to send an email shortly to Nathan Cullen and Murray Rankin, cc to Tom Mulcair and Paul Dewar my MP, thanking them for their stalwart and detailed questioning on the IGA at the committee. They clearly have listened to all our complaints, and the questioning was quite detailed and probing, I thought.
For those who didn’t bother tuning into the first five minutes of the meeting (I did tune in), it’s worth noting that Nathan Cullen, committee member and NDP Finance Critic, stated at the beginning of the meeting that the NDP considers the IGA to be a very complex piece of legislation than must be debated separated from the omnibus bill, but that the NDP had decided to devote the bulk of its committee time focusing on the IGA (Part 5). I’m paraphrasing, you can find what he says early in the clip.
The NDP clearly has given the IGA priority in their analysis and attack of the omnibus bill. They deserve credit and thanks for this. I urge you to write to them and thank them; I think it’s important to recognize and thank politicians when they (or some of them) actually do the right thing.
Remember this next election day, please. Also remember the Conservative members’ questions and comments.
@Wondering
I would think that Canada’s discrimination against Chinese nationals was racial based, whereas the current discrimination against Americans encompasses all races. It’s an equal opportunity discrimination policy, therefore probably more acceptable to the masses.
@Whitekat
That person at GT’s blog is basically telling you to stop complaining. I’m sure the same person wouldn’t tell any other victim of persecution to “deal with it”, but somehow it’s ok to be callous against us. Anti-Americanism is never too far below the surface in Canada.
@Schubert: Petros posted in the ACA CBT thread that Murray Rankin is at the meeting. When he said yesterday that he was going to Toronto to meet some more tax lawyers, I didn’t realize that was what he meant.
Mr. Rankin is the Revenue Critic for the NDP so his presence at the ACA meeting is significant.
I have sent Murray Rankin and Scott Brison my absolute thanks for their questions and direction in yesterday’s committee meeting, then clarification that I received from my tax lawyer on taxation of the RDSP that I HOLD for my son (the Beneficiary):
@bubblebustin
I’d characterize Canadians with a so-called “US-person” status of being discriminated against by a narrow definition of national origin (place of birth) – because a Canadian mom of any race or ethnicity could have been refereed to a US hospital. It is an even odder definition because few other countries define nationality or national origin based upon a local happenstance of birth by a mom who is a national and citizen of another country.
In broad strokes the discrimination of the Chinese Head tax was based on racial prejudice; however China is a vast place encompassing various different racial or ethnic groups, but the white Canadian culture of that time myopically lumped them together as “Chinese”.
@Bubblebustin,
I wrote a comment at GT’s blog the other day at: http://www.greaterfool.ca/2014/04/30/parents-2, and someone called ‘The American’ responded. Here is my comment, and his response.
WhiteKat says:
US Senators, Levin, McCain call for US to refrain from FATCA negotiations with Russia. Without a FATCA agreement, Russian banks face 30 percent withholding on US investments. “We should not be negotiating with the Russians to help them avoid FATCA’s sanctions at a time when Russian forces are threatening and continuing to destabilize Ukraine” Levin and McCain write in a letter to Treasury Secretary Jack Lew”. Full text of letter here: http://www.levin.senate.gov/newsroom/press/release/levin-mccain-call-for-us-to-refrain-from-fatca-negotiations-with-Russia#sthash.rNW5bJM7.dpuf
The stunning admission on the part of bi-partisan senators McCain and Levin is that FATCA withholdings are actually sanctions. Wasn’t FATCA supposed to be about catching ‘tax cheats’? FATCA is what the US does to its allies, like Canada; it threatens sanctions against them and forces them to sign so-called Intergovernmental Agreements (IGAs). With enemies like Russia it withholds the IGA so that it can happily impose the sanctions.
What debtor in any situation thinks that they are in a position to dictate the terms of their debt repayment to their creditors? Yet this is what the US has the gall to be doing here, and thinking they can get away with it.
“One of the under-reported but major risks to the U.S. economy stemming from FATCA is the potential for wide-scale disinvestment from the United States by foreign institutions seeking to avoid the IRS, penalties, and huge compliance costs. In fact, countless analysts and financial giants have said the 30-percent FATCA “withholding tax” represents a powerful incentive to get out of U.S. markets entirely. The implications for the stock market, bonds, the dollar, and more could be monumental.” says Alex Newman in his article ” The Dark Road, the Worst Tax Law You’ve Never Heard About’. Read full article here: http://www.thenewamerican.com/world-news/item/17986-the-dark-road-the-worst-tax-law-you-ve-never-heard-about://
The United States sanctions against Russian private individuals will likely backfire against USA companies like Exxon and Pepsi Cola, and will thus be yet another hit against pension programs that have already been absolutely decimated by ZIRP (Zero Interest Rate Policy) since 2008. This is what being a bad neighbour is all about. Imagine the same scenario if Canada had not signed the FATCA IGA with the USA. The US imposes 30% withholdings against transfer payments to Canada. Canada stops transferring oil, gas and electricity to the US. The US seizes Tim Hortons. Canada seizes Walmart, Costco, Target, Sears, Nordstroms, and Best Buy. Um, who is getting hurt? Ultimately such economic wars end in real wars. This is not a game the US should be playing, but 1.5 trillion deficit per year has the US in quite a pickle.
From an article today at Executive Magazine: “What happens when we (USA) start shorting payments on our Treasury bonds (TBs) by 30 percent? A sovereign holder is not subject to withholding, but for a private institution, what if the interest payment is done through SWIFT to a commercial bank that has not signed an IGA? Treasury will take the interest,” said Jim Jatras, Manager of RepealFATCA.com, which is lobbying against the law in Washington. “This is the kind of thing that could promote dumping TBs, and affect interest rates and the dollar as a global currency, which are issues nobody has thought out.” Read full article here: http://www.executive-magazine.com/business-finance/finance/fatca-answering-to-uncle-sam
Thank you for your honesty Mr Levin and Mr. McCain. We never really believed that FATCA was just about tax evasion, or even just information gathering. It is clearly all about COERCION and CONTROL. Thanks for finally cutting the crap and revealing the truth. I’m sure any day now you’ll have Russia on the run.
The American says:
At #14: WhiteKat, your “theory” is well and all, but one little detail you forgot when evaluating all sides… The U.S. holds the pursestrings. Canada does not by any stretch of the imagination. US Economy is easily 10X that of Canada’s, and the USD is still and will remain the global reserve currency. There will be absolutely no backfire against the likes of Exxon or Pepsi Cola. Mark these words. LMAO. Such a narrow minded viewpoint. If Canada didn’t sing FACTA IGA with the U.S. then it would be CANADA in a world of hurt… not the other way around. My oh my, what are they teaching you up there? Canada’s self importance is laughable in this scenario.