Don Cayo, a reporter for the Vancouver Sun (and has covered some of our issues in the past) has jumped on the bandwagon, criticizing us for mounting the charter challenge. His source, Warren Dueck is a CPA/CA located in British Columbia. (More of his viewpoint is available on his blog).
If you think a policy requiring our government to give such personal information to a foreign taxman won’t withstand a Charter challenge, Dueck concedes you may be right. But if you think this would be a good thing, he disagrees.
The problem is that if our institutions won’t — or can’t because of privacy laws — give the IRS what it wants, 30 per cent will be withheld from all U.S. transactions.
“This would be a devastating result for Canadian financial institutions and their customers who exchange hundreds of millions of dollars daily with U.S. individuals, businesses and other entities,” Dueck wrote to clients.
Ditto if you tell your bank to buzz off when it asks about your citizenship, except you’ll shoot only yourself in the foot by subjecting only your own earnings to withholding.
Dueck says there’s little chance any money withheld by the IRS could be applied against Canadian tax owing, and the only way for you to get it back would be to file a U.S. tax return, then wait for months for it to be processed.
Ottawa has been accused of selling out by agreeing to this, but once again Dueck disagrees. Without the agreement, he said, financial institutions would still face a no-win choice of either providing information about clients or having earnings withheld. And, while the agreement excludes earnings on such things as Registered Retirement Savings Plans, Registered Retirement Income Funds, Registered Educational Savings Plans and Tax-Free Savings Accounts, there’ll be no such exemptions if court challenges succeed in overturning the agreement.
Some of the Brocker SWAT Team (Special Writers and Authors) have already commented on the blog.
What do you think?
Hat tip to Tim for finding the article.
OMG, who sullied this fine upstanding site by bringing Don Cayo over here? Quick, someone find out if he is a dual.
What Do I think about all of this?
I think very little of it. And the comments expressed indicate a serious lack of knowledge regarding the issue.
What is that old adage? ‘Tis better to be thought a fool than to speak and remove ALL doubt!’
For further edification of the most ignorant comments I have seen in a long time from this yahoo, THIS is the kind of organization our government is going to have CRA send our private information to with no protections whatsoever.
“With a Charter Challenge, if it is successful, the protection from the 30% withholding disappears” Is this guy NUTS?
http://nation.foxnews.com/2014/05/16/irs%E2%80%99s-illegal-actions-and-its-efforts-cover
JUST in case he is unaware of just how lawless the IRS was is and intends to continue to be.
How be this guy talks to Lawyer Bopp and Senator Rand Paul before he starts spouting off.
Hows that for what I think.
http://www.vancouversun.com/columnists/Don_Cayo.html
Someone who can post on his site: please explain to him that he’s wrong to say ‘The provision requires “foreign” financial institutions (this means ours, among thousands globally) to report to the IRS whether customers who earn money from American investments are “U.S. persons.” ‘ He should have deleted the phrase “who earn money from American investments”. He’s repeating the same misinformation that Justin Trudeau spouted.
s
Is he dual? I don’t even know if he’s Canadian.
If you chose to invest in the US you should be prepared to follow US rules with regards to your investment.
If the US changes its rules in an attempt to force you to break Canadian law then you should probably be angry at the US and not the people that are the target of the law.
Arguing that somebody else should deal with the consequences of your investment decision is inappropriate. If you don’t like US law then you should remove your investments and invest them in Canada or elsewhere.
@JustACanadian, Huh?
@JustACanadian, I think you may have been confused by Don’s article where he refers to ‘American investments’. In reality the target of FATCA is investments OUTSIDE USA by people whom USA deems ‘US persons’ – a broad term including for example people such as myself who were born in USA to Canadian parents but returned home to Canada as babies. Our Canadian investments are to be reported to the IRS under FATCA. These so-called ‘foreign’ bank accounts are located up the street from where we live and have already been taxed by the Canadian government. Once IRS finds out how much money we have in the bank we will be penalized for not having reported these on ‘Foreign Bank Account Reports’ which were practically unheard of until FATCA loomed its ugly head. FATCA is essentially a penalty grab of Canadian capital earned by Canadians living in Canada.
@Just a Canadian
I’ve read your comment several times and can’t quite make out what you’re saying.
By “you” do you mean Canadian banks investing in the US?
@Brockers, JAC is referring to Canadian Banks and that is how I read it the first time.
He is right, the solution for Canadian Banks was to divest themselves of US assets.
@George
Everyone should divest themselves anything US… personal or business… they could again change the rules at the drop of the hat & u can great screwed more… not worth it… invest elsewhere
You = Canadian Banks specifically but in general it could apply to any Canadian who invests in the US.
If anybody invests in the US then they must deal with the US rules in regards to those investments. If the rules change then the investor must deal with the consequences. Expecting an unrelated third party (ie US citizens in Canada) to take the fall for the investor is not appropriate.
Its hostage taking.
Sorry, I didn’t finish my thought.
It hostage taking where the hostage has months of warning to get out of the way.
Di vesting is exactly what people ARE doing. My family certainly did. I used to urge my husband to invest through his RRSP SOME funds in the U.S. No longer. As soon as we found out about FATCA and the way our family would be treated we explicitly told his company to never again put a penny into the U.S.
The banks, well they simply only care about their money and having access to the Americans.
That’s unfortunate for them since it puts them in the position of being exposed as caring a lot more about themselves than they do about our Charter or our laws in public. I still think if they REALLY as they say do not like FATCA then they could show it by pushing for professor Christians proposal, as well as push for the suggestions professor Cockfield made. It’ not that hard, allow the banks to report but, exclude Canadian citizens and residents. Only report on those temporarily in Canada. The banks are still reporting those suspected of opening accounts as a temporary measure to “hide something” and letting treasury deal with that while those with legit reasons to have an account in Canada are not having their information treated as if they are committing a pre crime which is also against the law!
@George, Just a Canadian
I wasn’t sure because I couldn’t believe that the “US changed it’s rules to make ‘you’ (the banks or anyone else) break Canadian laws”.
Anyway, I agree with you Just a Canadian
Why should the Canadian government throw our Charter under the bus to make conditions less hostile for Canadian banks operating in the US, now that the US has changed the rules? You are right, it’s hostage taking and Canadian banks have Stockholm Syndrome.
Exactly — I agree too, bubblebustin. Thanks for pointing all of this out, Just a Canadian.
That is just what Mr. Cayo advocates — the Canadian government to shred the Charter of Rights and Freedoms to conform to the US rules will work for all of Canada. I hope other Canadians will see what is wrong with this line of reasoning.
The Canadian government has lost its way and Don Cayo thinks that a good thing — and that one million US Persons in Canada should be the collateral damage — those persons and their families being criminalized by US citizenship-based taxation!
I would go so far to say that the Canadian banks investment in the US puts them, and the Canadian government in conflict of interest position, when it comes to protecting the interests of Canadians.
Someone elsewhere said that in the past, others would have been hung for treason for doing such a thing.
Absolutely — take note ALL Canadians — is that acceptable?
To the Conservative MPs who voted in lockstep, the CBA and the financial institutions you “manage” and journalists like Don Cayo of the Vancouver Sun — is that what Canada means to you, stripping some Canadians of the same rights and freedoms of all others no matter where they are from or where their parents are from — condoning discrimination by national origin?
Who will you allow to be the next victims of such treatment?
THERE IS ALWAYS A COST TO LIBERTY. IT HAS TO BE PERIODICALLY BOUGHT WITH THE BLOOD OF PATRIOTS AND THE BLOOD OF TYRANTS.
For the USA to demand that Canada provide personal financial information from a million citizens with “US Person indicia,” exposing them to all kinds of bad consequences, is a hostile act. It should be identified and responded to as such by the Canadian government. How would Ottawa react if the US tried to take over a Canadian offshore oil rig, or a suburb of Vancouver? Please don’t say that there is nothing Ottawa could do — it isn’t true. Failure by senior politicians to defend a large segment of the population from hostile US extraterritorial action, especially when their proposed collaborationist alternative involves violation of Canadian tax and privacy law, needs to have severe consequences for their political careers, at the very least.
@JJD,
Thanks for your understanding, of what should be apparent to all Canadians including our politicians, but apparently is not the case. It seems that unless it is YOUR backyard directly that is being taken over, most Canadians (including Canadian politicians, bankers, compliance condors, etc) don’t care what happens next door. As someone famous here at Brock frequently reminds those of us that give a crap, ‘sauve qui peut’.
Infamous condor circles forevermore over prospective carrion …
http://usxcanada.wordpress.com/2011/08/19/2011-aug-19-cayo/
http://usxcanada.wordpress.com/2011/08/19/2011-aug-19-cayo-2/
http://usxcanada.wordpress.com/2011/06/20/2011-june-20-luciw/
Know who is not a friend. Sauve qui peut.
@usx
Thanks for posting these. I could not remember exactly what he had written, though I recognized his name.
“And this same provision will intrude on the rest of us who lead normal financial lives and have no U.S. ties.”
Or in other words…
All you US Persons in Canada better get in line and shut up because if you don’t the rest of us normal citizens are going to get punished.