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.
How long do you think it will be before the Conservatives go on the offensive and start accusing their opposition of trying to take down Canada’s banking system?
@bubblebustin, I hope they aren’t that petty and hyper-partisan (but of course we know Harper actually is both of those), in which case one response would be to reply that the Conservatives are trying to sell our sovereignty and our country down the river to the highest bidder and/or the biggest bully with the biggest stick, and is that any better than allegedly trying to take down our banking system? Which is more important, if forced to choose?
Not sure how that pissing contest would contribute to rational political discourse and politics in Canada, but there’s been precious little of that coming from the Harperites, at any time I can remember. They’re probably desperate enough looking at the polling numbers to start sinking to this, who knows?
@SwissPinoy and others, you’re welcome. Thanks for the thanks.
Seemingly overlooked by our MP’s is how FATCA will affect the great number of Canadians living in the US with accounts in Canada. They too are about to get fleeced when their financial data is turned over to the IRS. I can’t even guess how many people that will be, however.
@Bubblebustin,
‘Our MPs’ don’t care about us because we were born ‘there’, and they don’t care about them because they live ‘there’.
@Bubblebustin,
Perhaps I misunderstand your comment, but my response is NO! I couldn’t disagree more.
As Canadians, and indeed any non-American, we totally embrace resident-based taxation. A Canadian living in the US is subject to resident-based taxation on their world-wide income, just as they should be. Therefore, they are surely fully-compliant with the IRS and are reporting their world-wide income already.
The only thing FATCA adds is that besides their Canadian income, the IRS will get additional information such as account numbers and balances, but only on their “foreign” accounts in Canada. I wouldn’t call that “fleecing”, because it will not result in additional money collected by the IRS. The invasion of privacy is unfortunate. Why can’t FATCA-like implementations only require income to be reported, and not balances?
If the US were to switch to RBT, then I for one would embrace a global FATCA that reported accounts held by non-residents to their country of residence. Wouldn’t everyone, except people who truly are tax cheats in their country of residence?
@Whatami
My comment was in the context of this article:
http://isaacbrocksociety.ca/media-and-blog-articles-open-for-comments/comment-page-18/#comment-1618313
@WhatAmI:
Your comment:
“If the US were to switch to RBT, then I for one would embrace a global FATCA that reported accounts held by non-residents to their country of residence. Wouldn’t everyone, except people who truly are tax cheats in their country of residence?”
Why would anyone ’embrace a global FATCA’??
Have you actually READ what the global FATCA IS and who is running it and what they intend?
True tax cheats have already made their moves to secure their wealth or whatever they have long ago or are making those moves now and IRS admits the big fish they are not after, no it is the middle class they are after. Retirement accounts they are after. People who have little in the way of ability to fight back. And they KNOW what OECD plan and have made THEIR moves accordingly.
It is the ordinary folks like us who have been law abiding and tax paying in our own country who are the targets. That is clear when you read how they intend to pursue and how they move the goal posts to ensure they entrap as many as possible.
When you say you would embrace a global FATCA because it will be based on RBT you are saying you embrace the complete annihilation of every individual’s and companies wealth , information and privacy to some of the most vicious thugs and dictators on the planet.
Most companies are made up of small businesses. 80% of companies in both the US and Canada is made up of small business. Global FATCA aims and intends to get every tidbit of information on everyone and if that is refused to punish with harsh penalties. They look FORWARD to it. With anticipation and glee.
It is a financial and frontal assault on the individual planet wide.
So don’t be too hasty to embrace an evil entity bent on the destruction of the majority of us on the planet.
I encourage you to go to:
http://www.thenewamerican.com
and look up the articles written by Alex Newman. All the information, in the OECD’s own words makes it clear what they want and intend. And it is not good for us nor is it something, once implemented is intended to be able to get away from. EVER.
@Bubblebustin,
I see. Wow, I didn’t know the US was not educating immigrants, then waiting until they could hit them with FBAR penalties. Such deliberate entrapment is immoral. Many of these new US immigrants are probably even correctly reporting their homeland income. They should know that because it’s the law in their homeland and every other country on earth. The conclusions and recommendations at the end of the article look good. It is easily fixable with education. Then, new immigrants are treated the same as all other US residents and there is no discrimination or unfairness for them as US residents when it comes to taxes, FBARS or FATCA.
I still have a hair to split though. I still fail to see what any of this has to do with our Canadian MPs or the Canadian FATCA agreement issues.
Our MPs are not responsible for educating immigrants to the US. I don’t see any failure there. The failure is that they are not protecting Canadians in Canada against the US.
For new immigrants to the US, FATCA rats them out to FBAR penalties and again, the solution is simply enforced education. Yes, FBARs and FBAR penalties are ridiculous. While we Canadians in Canada argue against FATCA, FBARS, etc being applied to us here, and resent being told by our government that we can complain to the US and not to them, I don’t see that anybody in Canada is in any position to fight the US for laws it applies to its own _residents_. That’s none of our business (unless taken to the extreme of human rights violations but that’s not the topic here). In Canada, we insist that all of our residents abide by our laws and nobody complains about that.
If you’re saying that the Canadian FATCA agreement being harmful to Canadians living in the US is an additional reason to for our MPs to oppose FATCA in Canada, well, that can be interpreted as condoning willful FBAR non-filing by US residents by implying that without FATCA they can hide their assets and income in Canada. FATCA isn’t the problem for US residents, it’s the lack of education and the resulting FBAR penalties for US residents. If you are compliant in your country of residence, then FATCA-like laws don’t seem harmful if they really are simply enforcing reporting tax on world-wide income.
Clearly, our government shouldn’t be telling our dual-citizens “If you don’t like US laws applied to you in Canada, then complain to the US, or move home to the US”. That is a total failure. I have no problem telling Canadians living in the US “If you don’t like the laws in the US, then move back home to Canada, eh?”.
What the heck, WhatAmI?
The invasion of privacy is “unfortunate”???!!! Well I have much stronger and 7 letters shorter words to describe that invasion of privacy. I won’t elaborate. I also consider all of the forms partnered with all of the potential for form penalties to be absolutely a form of fleecing. Canadians resident in the USA are totally vulnerable to this form of extortion. FATCA seeks to inventory a person’s assets and that is wrong on all levels. We all know that it’s possible to have assets without a penny in taxes being owed on those assets. Asset inventory raises the spectre of confiscation. That goes way beyond merely being “unfortunate”.
WhatAmI
*A Canadian living in the US is subject to resident-based taxation on their world-wide income, just as they should be. Therefore, they are surely fully-compliant with the IRS and are reporting their world-wide income already*
Most are not in high income so the taxes are done on their own… with the mind set of immigrants… what is made in home country or after tax money is sent… taxes are paid on it… When I saw the words *off-shore* I thought untaxed & hidden away. Why would u assume immigrants know the rules… Immigrants are allowed to live & work in the US but have no vote or say… Legal visitor… we thought we had to pay on only what is made in the US which was fair. Joint anything… I am the 2nd name on it… why would I report anything cause I put nothing in. I never had to deal with capital gains on things I owned… I didn’t sell it yet… Alot of countries don’t have capital gain on homes sold or complicated capital gains rules… only in the US. So please don’t assume immigrants in the US knows anything & is fully-compliant because we knew nothing. Then here is the kick in the pants… GC holders have to exit the tax system & pay like citizens. GC holders pay for the renewal of the card every few yrs… its not cheap… If your card expired… u still got to pay the US as a citizen but u don’t live there… they treat immigrants like we are terrorists. Pretty soon…we probably have to give them a DNA sample if we want to enter the US or stay… can’t say anything… who will help the immigrants… not one bloody person
@FuriousAC,
Thanks for pointing this out. No, I haven’t read any of that and I am naively thinking that the intention of a global FATCA or OECD is simply and only to ensure people comply with RBT and report their world-wide income. What I meant was I embrace income-reporting compliance. Who doesn’t? Is there a non-intrusive non-abusive way to implement such a thing? I have no idea.
Your point is well taken. I should simply say I embrace not cheating on taxes and leave it at that.
@Em,
Agreed, the asset inventory shouldn’t be part of any tax reporting system.
You said “Canadians resident in the USA are totally vulnerable to this form of extortion”. Unless I don’t understand, they are no more vulnerable than Americans resident in the USA. My question is, what does this have to do with Canadian MPs debating the Canadian FATCA IGA?
@WhatAmI says
**I still have a hair to split though. I still fail to see what any of this has to do with our Canadian MPs or the Canadian FATCA agreement issues.**
I am canadian by birth… my family is canadian by birth or choice… Some are duals… why shouldn’t my gov’t protect us even though we may or may not be there…. I have just as much rights as u do… With your blanket statement…. u must be american… see the assumption here… Why should my gov’t bend over & turn me over to a foreign gov’t. This issue if u really think about it… is an american law on canadian soil… right or wrong? Funds taxed in canada is an investment in my country… The issue in my mind is…. why is american law being enforced on canadian land? Their laws stop at their borders… they don’t go beyond. If u really think about it… it has nothing to do with taxes but to gather all our info with no privacy laws at all. I am not into tax cheats but u need to see more then that. If I know the laws… I make every attempt to abide by it… if I don’t know the rules… I don’t expect to be punished to the extent I will be poor & have to start over.
@ WhatAmI
All I meant is that they are more vulnerable than Americans living in Canada because if they are penalized on something arising from the existence of Canadian assets they may have left behind when they immigrated to the USA, it is quite easy for the IRS to arbitrarily seize their US assets as payment.
@US_Person_Foreigner,
You are talking about those of us who are Canadian in Canada when the US might also consider us as US persons. Of course the Canadian government must protect us. I totally agree.
My comments are to a previous post and article about Canadians who are immigrants to and resident in the US. I’m just asking “what any of this has to do with our Canadian MPs or the Canadian FATCA agreement issues”.
@Em,
All I meant is that they are more vulnerable than Americans living in Canada
Agreed, of course, but I didn’t say anything about that case.
I’m responding to and trying to understand bubblebustin’s comment:
Seemingly overlooked by our MP’s is how FATCA will affect the great number of Canadians living in the US with accounts in Canada. They too are about to get fleeced when their financial data is turned over to the IRS.
If a dual-citizen lives in Canada, the US government will ruin your life and our government is not protecting us as it must.
If a Canadian moves to the US, the Canadian government lets you go with few or no strings attached. The US government apparently will still try to ruin your life, but “what does that have to do with our Canadian MPs or the Canadian FATCA agreement issues”? I don’t see that our government can do anything to help your financial situation under US law once you immigrate to the US.
@Em,
Sorry, I see I completely misread your post just now and see that you were explaining about Canadians moving to the US. Still, does anybody here believe the Canadian government should protect you against US law (as bad as it is) if you move to the US?
OK, I’ve made a mess of all my posts today. I guess the foot of snow that fell on my lawn overnight has me quite rattled. I should bow out of this discussion. The final summary I’ll make is:
If an American lives in Canada, the US may well ruin him financially.
If a Canadian lives in the US, the US may well ruin him financially.
Where you stand depends on where you sit.
@WhatAmI:
Bottom line. The US IRS will ruin your life one way or another if they are allowed to get away with it.
The simple issue of FATCA is that it is UNenforcable everywhere.
Which is why these IGA’s ( which the US calls quasi-treaties) because they are illegal. ( Treasury has NO authority whatsoever to ‘negotiate’ IGAs with ANY sovereign country)
See Jim Jatras and Sen Rand Paul.
Which raises the pertinent question as to WHY our government of the day insisted on signing one.
AND reading the IGA proposed is an eye opener all it’s own. It might as well have turned over the keys to the kingdom to the IRS. Not to mention their evil little snitches called ‘third party’ entities employed to ‘gather information’!
@ WhatAmI
Snow will do that. We’re looking at a few inches here and there’s no end in sight — yet. Cheers 🙂 !
@Em,
Nothing that a week on a beach in the Caribbean wouldn’t fix, except in fact I just returned from a week on a beach in the Caribbean…
@WhatAmI
Perfectly said… either way u put it… US is screwing us all & no matter where u are… we got no rights or privacy…
Trade u snow for my house… stuck here with a bunch of sick toddlers & kids… whine… whine… he’s breathing on me… whine… whine… he’s looking at me… geez…. Couldn’t wait for the baby to talk… now they won’t shut the heck up…lol
@ WhatAmI
About the issue of Canada protecting its citizens living in the USA from US law … well no, I guess not. You obey the laws of the land you are living in. That seems to be an international norm. The CRA has been providing the IRS with “taxable income” reports all along and that has not met with much resistance. What I think Canada should have done when presented with the illegal FATCA diktat is forbid our financial institutions from compiling and passing along “asset reports” on any of their clients, no matter what their citizenship and no matter where their residence may be. That would have given EVERYONE protection from this privacy invasion that the USA seeks to impose worldwide by means of threats of sanctions. Canada and the whole world should have called the USA’s bluff and it would have taken only one word to do it — NO!
I have numerous times said that the 1995 USA Canada Tax treaty should be included in Supreme Court Challenge. I do not know of any other country signed this type of agreement and what was the economic blackmail that USA used. The Liberals have always been very friendly with Democrats and the worse case scenario is Justin Trudeau renegotiating the deal.
“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).”