Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 37 Comments

First, don’t you love this photo of her at The Sandbox Project in Ottawa yesterday? Elizabeth, you have an open invitation to play with us at Maple Sandbox anytime!

Thanks to Hazy for finding Elizabeth’s comments in Hansard June 4, 2014

Elizabeth May: The piece my hon. friend from Victoria mentioned is the most controversial. It will certainly be the piece that will cause the greatest grief to this administration. It could cause real grief and hardship for about a million Canadians who may find themselves swept up, not as U.S. citizens, but described as U.S. persons.

I refer again to the Foreign Account Tax Compliance Act. This is unusual in a lot of ways. My friend from Victoria and I are both lawyers. I no longer practise in a way which anyone would notice. I am not a practising lawyer. I am not insured to practise law, but I know my legal principles.

It is certainly remarkable that U.S. legislation has been accepted in Canada as having extraterritorial application. Canada is prepared to say okay. I do not know if this would be allowed if, say, Iran decided to pass legislation to say that anyone with an Iranian connection in Canada had to be treated differently than other Canadians.

In the case of the United States and this piece of legislation, it is based on the implementation of something called the Intergovernmental Agreement, or IGA. Obviously, the United States is our greatest trading partner and closest friend. This is nothing against the United States, but as a matter in principle of law, one nation’s laws do not apply extraterritorially to citizens of other countries. In this case, we have agreed, as though it were a treaty, to implement the IGA.

What is fascinating about this is that the United States does not treat it as a treaty at all. It has not been sent to the U.S. Senate for ratification. In other words, the U.S. does not treat it as a treaty. The U.S. treats it as sort of a clarification of previous agreements. However, it contains substantive new obligations for foreign countries, and somehow Canada feels that we are obligated to enforce it.

Not all experts in tax law accept that. There was a particularly useful submission to Finance Canada prepared by Allison Christians, who is the H. Heward Stikeman Chair in Tax Law at McGill University, and Professor Arthur Cockfield of Queen’s University. Together they have looked at this and have urged Finance Canada to slow down. They say that the steps we have already taken completely vouchsafe Canadian business and protect Canadian banks. We do not need to push FATCA through, and we certainly should not be pushing it through in an omnibus budget bill.

Their recommendation I think is worth reading into the record this evening:

…we recommend that the government delay passage of the Implementation Act until: (a) the issues surrounding Charter protections, other taxpayer protections, and global cooperative efforts have been thoroughly studied and addressed; and (b) the U.S. government agrees to reciprocal treatment with respect to the tax information reporting system that has been unilaterally imposed on Canada.

We are looking at a piece of legislation that imposes on Canada requirements that the U.S. does not have to reciprocate without a treaty having been ratified in the United States.

What are the implications for Canadians? Well, as I just mentioned, Professors Christians and Cockfield talked about charter implications. My office some time ago filed an access to information request. That is how Professor Peter Hogg’s constitutional advice to Finance Canada became public.

Professor Hogg’s letter, dated December 12, 2012, was advice to Finance Canada that what he saw in FATCA definitely violated the Charter of Rights and Freedoms, specifically section 15 of the charter, which says:

Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination…

This is clearly discrimination, and Professor Hogg went on is his letter to point out the following:

There is no mechanism in the Model IGA whereby individuals who are suspected to be U.S. citizens would even know that their personal information was provided to the IRS.

Further on in his letter, he puts it very strongly and clearly:

In my opinion, the procedures mandated by this Model IGA [FATCA] are discriminatory in a way that would not withstand Charter scrutiny. These procedures effectively treat individuals differently, and adversely, based on immutable personal characteristics, specifically citizenship (whether or not acknowledged or desired by the individual) or place of birth. If Parliament were to enact legislation authorizing and permitting this type of differential and adverse treatment, the legislation would contravene the equality protections in section 15 of the Charter.

That is not a tentative conclusion. It is an authoritative conclusion from the most respected constitutional law expert in the land. He wrote the book on constitutional law that I studied when I was in law school. He taught constitutional law to our dear late friend, Jim Flaherty. Jim claimed that he gave him an A, but we cannot verify that.
However, we know that this piece of legislation, I say without qualification, clearly is unconstitutional, and it brings shame to this place to knowingly pass an unconstitutional act.

Marc Garneau (Liberal)
Mr. Speaker, I thank my colleague from Saanich—Gulf Islands for raising the issue of the Charter of Rights and Freedoms, because we in the Liberal Party are also concerned, based on what we have seen from constitutional experts, that there may be violations of the charter.

Let me get to my question, which deals with FATCA. As we know, under FATCA, Canadian banks must report to the IRS the accounts held by clients who happen to have U.S. citizenship. In Canada there are about a million of them. Otherwise they face the prospect of a 30% withholding tax on their U.S. income.

The government seems to have been very motivated to protect the banks from this. It has come up with some alternate arrangements and changes. As it turns out, the banks would report to the CRA, which would then report to the IRS.

However, there does not seem to be the same concern for the citizens themselves. In fact, it seems that the government has folded its tent here, and it seems quite happy to do the work of the IRS insofar as citizens are concerned.

I would like to hear more from my hon. colleague on why she thinks the banks would be protected but not Canadian citizens with dual nationality.

Elizabeth May: I think what has happened here is that there have been threats made by the U.S. administration to sanction Canadian banks. The expert legal advice we have is that the best approach would be to push back on that internationally and to say that there is no right on the part of the U.S. government to penalize banks operating within the United States on the basis of this treaty, which the U.S. has not even ratified itself.

Murray Rankin: Mr. Speaker, my hon. friend was there at the committee stage. Why does she think the government would not accept an amendment that would say, for greater certainty, that the provisions would comply with the Charter of Rights and Freedoms and the Privacy Act, and it would not accept the need for notice of Canadians before their information was released?

Elizabeth May: Mr. Speaker, there were some concessions the Canadians officials gained, such as making sure that RRSPs and other pension and tax savings funds would not be caught under this web. They felt so good about those that they felt they did not dare do anything to protect Canadians and that they got the best deal they could get. They should be listening to legal advice, particularly constitutional law.

cross-posted from Maple Sandbox

37 thoughts on “Elizabeth May Continues FATCA Fight in House of Commons”

  1. Great to see you, Ms. May, and your opposition colleagues, united in an anti-FATCA march from the Finance Committee to the floor of the House. Way to go everyone – please continue to stand together and keep hammering away at this government! You are on the right side of history and have our full support!

    Thank you for continuing to shed the light of truth on this disingenuous and darkly cynical administration. These skirmishes will surely grow into one of the greatest election battles in Canadian history – and Supreme Court Charter challenges. I can feel it in my bones. These Conservatives are finished.

  2. Honestly- this is war. It is financial war on the rest of the world. And it is like a piece of shit wrapped up in a candy wrapper to make it look palatable to the rest of the world.
    Thanks for keeping up the fight against the implementation of extraterritorial laws from other countries, and against bullying and against discrimination. It is truly frightening when governments of other countries fold and stop protecting their own sovereignty.

  3. Peggy Nash tweeted recently that she would be speaking about FATCA in the House and she did very well too:

    Ms. Peggy Nash (Parkdale—High Park, NDP):

    Mr. Speaker, I thank my colleagues in the House for that enthusiastic and warm welcome this evening at this advanced hour. I really appreciate the encouragement.

    We are here this evening examining Bill C-31, another one of the omnibus budget implementation acts of the Conservative government, and yet again we find ourselves presented with a massive bill. The bill is over 360 pages long, and it changes a number of pieces of legislation, more than 60 acts in all.

    I want to begin my remarks by pointing out again the fundamentally undemocratic nature of the government throwing into one omnibus bill much of its legislative agenda, including many measures that have nothing to do with the budget and including whole bills that should be separate pieces of legislation that come before the House and are voted on at separate committees by the members. Instead everything is thrown into one budget bill.

    Because there are so many areas that the bill touches on, I am only going to be able to mention three or four this evening, unfortunately, but I want to speak first of all about the changes to FATCA. This is the foreign account tax compliance act, and Bill C-31 moves to implement a Canada-U.S. intergovernmental agreement about FATCA.

    What is FATCA? The bill means that Canadian-U.S. dual citizens would find that they would have their financial information scrutinized by the American government, even though they perhaps have not lived or worked in the United States for many years, and this would include people who happen to be born in the U.S. but have not lived there perhaps most of their lives.

    What the agreement would do is facilitate the transfer of sensitive Canadian financial information, individuals’ financial information, to the United States. There are serious concerns that this would violate the privacy of a number of Canadians. In fact, it could adversely affect up to one million Canadians who could be affected by the bill, people who happen to be here but also hold American citizenship; so this is a great concern. In my constituency, many people have written to me or visited me, very concerned about what this means.

    It appears that the agreement was negotiated with the protection of the banks in mind, as opposed to the individual protection of individual Canadian citizens. This entire agreement is included in this omnibus budget bill, as opposed to having something that is so fundamental and so important and affects so many Canadians carved out as a separate bill that could be debated and given due consideration. That is very troubling.

    One of the key problems with the FATCA provisions in the bill is that there is nothing in this that would inform Canadians that their privacy is being violated, that their information is being turned over to the IRS. We proposed some reasonable amendments to these provisions, but as usual, they were all rejected by the Conservatives.

  4. Thank you to All who are standing up for Canadians. Aboriginals, as defined by the Canadian government, have protections as well that have never been introduced regarding Fatca. In the Canadian constitution, act, section 35 provides protections and confirms the Charter rights of all Aboriginal people in Canada. The Fatca IGA clearly violates aboriginal people’s rights. Currently, there is work being done for another charter and privacy rights challenge for the Aboriginal people of Canada. I strongly recommend that this IGA be terminated as this will likely become very ugly in the Canadian courts between the Aboriginal peoples of Canada and the current government.

  6. It’s great that May, Garneau, Rankin and Nash are tag-teaming on this.

    Here’s a link to another recent exchange in the House between May and Gerald Keddy. Note how in his response to May, Keddy’s definition of Canadian does not include dual citizen:

    “The hon. member talked about Canadian citizens. Canadian citizens are not caught in this loop. Dual citizens will have to pay taxes in the U.S. or, properly speaking, for the hon. member’s benefit, they have to file tax returns. They may not have tax debt, they may not have to pay taxes in the states, but they do have to file returns, which they have always had to file. The CRA will then exchange the information with the IRS through the existing provisions and safeguards of the Canada-U.S. treaty, consistent with our privacy laws.”

    Should the Canadian government also enforce Sharia law against some Canadian citizens too?

    http://openparliament.ca/debates/2014/5/28/elizabeth-may-10/

  8. This is what we are all fighting for. Please read, if you have time, this information written about Canada. This might give us some ideas on who to ask for help, as these people have been involved in issues such as this themselves… A solid legal framework exists in Canada to promote the principles of diversity and the rights of all individuals, protecting them from discrimination. In 1971, Canada was the first country in the world to adopt multiculturalism as an official policy (see the Canadian Multiculturalism Act). In 1982, the Canadian Charter of Rights and Freedoms recognized the importance of preserving and enhancing the multicultural heritage of Canadians. In 1985, the equality article of the Charter, Section 15, came into effect, specifying that every individual was equal before and under the law and had the right to equal protection and equal benefit of the law without discrimination. Minority groups may appeal to the Canadian Charter of Rights and Freedoms (Part I of the Constitution Act of 1982) and to similar provincial charters to defend themselves from discrimination. – See more at: http://www.minorityrights.org/?lid=2623

  9. Should we all start a “new” minority group? This seems to be the way Canada views US expats, as they think they cannot fight back?

  10. I was wondering about the following. If I search for say ‘going to work in the USA’ and equivalent (I have no idea what are good search words here). Then you get to a site by the US government as the top hit.
    You have different consumers of searches like this. Students who may want to study in the US, people who want to work here, visitors/tourists etc.
    Now if tax problems feature prominently then suddenly people can understand the issue before they come here and get into problems. Many people might chose to avoid the US because of problems they see.
    Nothing speaks louder to the US government than people avoiding the US. Remember that comment about deterring foreign workers being a big problem if they enforced the no-entry to the US if you left for tax purposes? It would be equally frightening for the US if people don’t want to set up businesses abroad because of these problems. The respected governments are willing to tie themselves up somewhat with tax treaties to get cross border stuff going on.
    If you have good pages that can get linked to about all these problems then you would stand a chance of getting seen by people. Obviously you can buy ad words to get the page seen but you might be able to do it organically if multiple concerned blogs point to the appropriate place.
    I work for a large tech company and when this stuff comes up people are shocked at what’s going on. If you guys produced say a 1 page leaflet on different subjects. Say immigrants to the US or expats etc. People could print out copies and drop them on notice boards etc. The truth is our friend here.

  11. @NativeCanadian, thank you for posting that article about the surveillance of Cindy Blackstock. It’s shocking that she would be put under surveillance just for being an advocate for the rights of children.

    I have little doubt that IBS and other web sites devoted to issues of U.S. extra-territorial taxation and citizenship are also under surveillance, both by the U.S. government and by the Canadian government. I wonder if freedom of information applications would get us anywhere if determining the extent and nature of the surveillance. I have my doubts, because we can’t even get simple data from the U.S. government — in particular the numbers of CLNs they are issuing.

  12. @Neill

    You reminded me of my Seattle cab ride with the Eritrean cab driver. Here was someone fully aware of citizenship based taxation who had no idea that the US practiced the same (!). The US government has proven itself to be extremely negligent in informing its immigrants and emigrants alike of their tax filing and reporting obligations, to the extent of being criminal, IMO.

    A flyer is a good idea, especially one from an immigrant’s perspective such as yourself. There are also Facebook groups such as “Canadians Living in the US” that I occasionally get the information out on. I’ve had a few people thank me for information they knew nothing about prior to my postings. Are you on Facebook? I see there’s no Facebook group “Brits living in the US” yet.

  13. I am so happy to see Ms. May continuing to point out the flaws with FATCA as well as the NDP members. Love the photo…I have that exact same dress. 😛

    To Mr. Keddy “Eritriea requires all citizens to pay tax hommage to Eritrea. This has always been so. The CRA will collect information and then pass it along to the Eritrean tax authority.” That’s about how much sense his comments make with regard to the U.S.

    Or “Saudi nationals restrict the ability of women to obtain a drivers license. This has always been so. Transport Canada will collect the information of all Saudi nationals who are female and pass it along to the proper Saudi authorities.”

    He hasn’t got a leg to stand on with the illogical way he is replying to the very real legal issues for Canadian citizens with regard to FATCA. Following his logic, Canada abides by the laws of all other nations even when in contravention of Canadian law with regard to ALL dual nationals who are Canadian citizens. Either they do this to EVERY dual national or none of them. They cannot cherry pick who is covered by the Charter and who is not if the person is a Canadian citizen. He sounds ridiculous.

  14. @AtticusinCanada, we’ve all known at least one person during our lifetime who speaks authoritatively but who everyone knows is a complete idiot. That description fits Mr. Keddy perfectly. Keddy was hand selected by political strategists to deliver this most ridiculous message. They know that when they destroy his political career it will be no great loss to the Conservative party. Just one less idiot to worry about.

  15. @OMG you are so right! Mr. Keddy was a “stooge” hand picked to insult Canadians. Yes, his career is over, but nobody will care, the damage is done.

  16. My wife, my 5 year old daughter and myself are all going to Canada’s Wonderland tomorrow. we dumped Florida for good! No Canadian money spent in the USA for a vacation from our family ever again!

  17. @NativeCanadian, remember when Mr. Oliver was speaking at an earlier meeting how nervous he was? He had to read off of cue cards to make sure he was towing the party line. There was like 3 sentences on those cue cards and he wasn’t allowed to say anything else. He just ended up looking like a fool but that was because every time his brain became engaged he realized what a stupid thing he was doing. I almost felt sorry for him … ALMOST.

    After that debacle the political strategists decided they couldn’t allow anyone with a brain to speak about FATCA because they couldn’t do it with a straight face. That’s when they decided they needed as you call him a “stooge” … enter Mr. Keddy … say goodbye to your career.

  19. @Atticus: Mr. Keddy not only sounds ridiculous he IS ridiculous.
    The facts of FATCA are that it is as a whole completely illegal.
    IRS knew this and also knew the ONLY way to worm it’s evil way into other countries was to threaten and bully them into overriding their own privacy and banking laws so they could target people they had no business targeting.They have said that it was unworkable and illegal unless they could get other countries to agree to sign an override of their own laws. If they could hornswaggle them into it , any way they could, then FATCA will work.
    All this nonsense about “Congress Has Spoken” is also a lie, almost as big a lie as FATCA is itself.
    Congress, specifically regarding IGA’s, ( the mechanism to make something illegal workable outside the US) has most definitely NOT spoken and forms one of the planks of litigation undertaken by James Bopp and Republicans Overseas.
    To have our OWN government knuckle under to bullying and threats of the IRS to protect the banking system in Canada and put up for sacrifice every individual in Canada who are citizens or permanent residents living legally and law abiding is tantamount to Jews betraying other Jews , pointing them out and leading Nazi SS to their very door. ( wait a minute… that is exactly what George Soros DID!
    HIS excuse? “Someone was going to do it, it might as well have been me.”)

    Let us not kid ourselves about what is going on here.
    On the US Southern border illegals are pouring across in such numbers as to overwhelm Border Patrol. This is by design, and they are given bus passes to California and other destinations around the US. They will be given permission to access the welfare system and health and education system at great cost to the US.
    Meanwhile a staggering 92,009.000 people are out of work in the US.
    (according to Drudge this morning)
    That represents more than one third of the actual workforce and more than twice the population of this entire country. Almost three times.
    The dream act voted down but Executive ordered by the current Admin gives amnesty to these people pouring into the US, among them thousands and thousands of children and those already in the country will continue to be illegal but enjoy the fruits of the labour of the people who do work in the country.
    Canada enjoys relative peace and stability but the implementation of FATCA will ensure the utter demise of our prosperity and peace turning us into what is happening in the US over the last six years.
    ALL because our Conservative government has capitulated to the SS of FATCA and turned over their own fellow citizens and residents to the ovens of penalty punishment for all time. Meanwhile the Soros Banks enjoy the spoils of betrayal.
    The estimated one million “US Persons” in Canada is a low figure in my view, especially when “US Person” designation is up to the IRS and they have , can and will change that designation to suit their own designs. If there are one million “US Persons” in Canada , it can be reasonably assumed they have family. Husbands, Wives, Children and if they work for a company and have any kind of signing authority, then the company itself is considered a “US Person”. By that extrapolation alone, we can count at least four times , maybe more, of that one million designation. Can our government not see how this evil worm eats away at every level, working through families and businesses at a rapid and all consuming rate of destruction?
    And if that is not enough, if the banks find that this job of collaborating with the enemy is just to distateful for them, they can hire ‘third party’ entities, who shall remain nameless to do the reporting on the unsuspecting for them.
    I appreciate Elizabeth Mays fight against FATCA and Murray Rankins and Scott Brison and Garneau and others. I do. I appreciate it so much.
    But somehow it does not reveal the underlying evil and all encompassing destruction this will bring to Canada and all her citizens and residents, including our Aboriginal peoples, who after all were absolutely here FIRST.
    And it does not come close to describing what betrayal the Conservative government has undertaken in signing an IGA with IRS SS and allowing them to ‘come and get ’em’ , here they are. Take ’em away. I believe when the second world war was over there was a price to pay for that.

  20. @OMG: Keddy was clearly chosen to be the Con mouthpiece because he is not running for reelection.
    http://www.cbc.ca/news/canada/nova-scotia/mp-gerald-keddy-announces-he-will-not-seek-2015-re-election-1.2654611

    On the other hand, Business Week says Harper’s reelection in 2015 hinges on Oliver. it’s hard to believe Oliver has a law degree from McGill and an MBA from Harvard!

    http://www.businessweek.com/news/2014-05-08/harper-re-election-hinges-on-73-year-old-rookie-minister-oliver

  21. @Blaze, if Harper’s reelection hinges on Oliver he is in trouble. All the journalists should hammer Oliver about FATCA. If he’s true to form he will stutter his way through the interviews. Goodbye Harper!

  22. According to reports, Oliver is a banker. OR was before politics.
    And completely incompetent, as described in above posts.
    All they want him for is a warm body. Stand him up and put a card in his face from which to mouth words.
    And what kind of Canada will we have in 2015? After FATCA devastation and GATCA devastation has held sway for almost a year or more?
    Will Canada suffer the fate of Ukraine? Where the world is upside down and you cannot tell the good guys from the bad guys.All the good guys we have known as good guys are behaving like the bad guys and the bad guys are doing and saying what the good guys USED to do and say??
    When one admires what Putin is doing and utterly rejecting anything the US admin is doing, everything we have ever known just comes into question. Just as we question why our former good guy Conservatives have turned into kissing banker A$$ traitors to Canada and all she is , ever was and ever will be.
    Can you imagine over 4 million plus more caught in form nation traps filing forms every year for the rest of their lives. Many forms. Many traps to penalties imposed. Every year forever. How COULD this be?

  24. FuriousAC: “You won’t recognize Canada when I’m through with it.” (Stephen Harper, 2006).

    He kept that promise.

Leave a comment

Your email address will not be published.

%d bloggers like this: