A couple weeks ago, I sent this comment via email to my Conservative MP of Nepean-Carleton, Pierre Poilievre (thank you to Deckard1138 whose wording I borrowed from one of his Brock posts):
Only one week after ushering-in FATCA on Canada Day, Canada’s government is warning the Eritrean consulate to stop harassing Eritrean-Canadians or risk closure of its consulate. Foreign Affairs Minister John Baird made the announcement today in Ottawa.
Fair enough to say that this is certainly one of the most egregiously hypocritical moves the Conservative government has ever made – and there have been far too many to count over the years. I would love to hear Mr. Baird explain to Canadians how it is acceptable for the United States to impose its infinitely more invasive extraterritorial tax laws in Canada but Eritrea’s amateur-hour 2% shakedown warrants impending closure of its consulate? Could it be that Mr. Baird is in fact preparing a subsequent announcement that he will be ordering the immediate closure of the US Embassy as well? Should we give him the benefit of the doubt?
Today I received this ‘enlightened, and well argued’ (NOT) response back:
The United States collects taxes based on citizenship, rather than residency. This means that a US citizen living in another country must still file and pay taxes in the US for as long as they remain a US citizen.
There is no equivalency between this and the actions of Eritrea.
Sincerely,
Pierre Poilievre, P.C., M.P. Nepean-Carleton
@WhiteKat,
Wonderful letter and I am in the identical situation as you are with a 100% Canadian spouse who is fulminating at every turn. I was dumbfounded to read Poilievre’s response. Only a politician with half a brain, nonthinking at that, but totally brainwashed by the party line, could muster up such an ignorant response. Gastric juices, blood pressure, heart palpitations, all revving up as this is what we are up against.
@NativeCanadian,
Good for you!!
The insight and anger here sustains me. Many thanks.
@Whitecat Thanks for sharing this with us.
A key difference between closing the Eritrean embassy and the U.S. embassy, is that the U.S. is the major trading partner with Canada while Eritrea is of nil economic significance to Canada.
While the point of hypocrisy is a good one, perhaps the note has not left Pierre Poilievre with an actionable way forward, so he will dismiss the request. Hopefully, your e-mails and contacts of others will leave an impression with him.
What could have been asked for is a revision of the Canadian-U.S. tax treaty to add exemptions for the Canadian family home, Canadian retirement and tax reduced accounts, Canadian life insurance pay outs, exemption from unreasonable FBAR and FATCA penalties for Canadian residents, and some blanket exemptions that will mean most do not report or pay tax to the U.S. It might be pointed out that in the existing treaty that the U.S. just may add additional taxes such as Affordable Care Act ObamaCare and these would just sail through on top of all Canadian taxes as a point of weakness in the treaty. That might be something he could work with. A treaty for Canadians incorporating interests of Canadian residents, rather than letting the U.S. laws flow over Canada as if Canada was part of U.S. territory.
Here are the possibilities:
1) Challenge the legality of FATCA – if so successfully challenged then that is a part solution. Yet a successfully challenged FATCA would be a really good lever for getting the Canadian-U.S. tax treaty revised – and this might be a compromise to keep some aspects of FATCA (perhaps the part if the USP have a US address).
2) Get the Canadian-U.S. tax treaty revised. A significant point is not just the USP involved but the Canadian families involved (perhaps 4x the number of USP) and how unfair the rules are for them when they get retirement, wealth, significant time and compliance of the USP taken away from them too.
3) Get FATCA repealed from the US. side. The Republicans have this in their platform.
4) Get special consideration in U.S. law for U.S.persons abroad. Such as change FATCA for if people have a US address. Some say do away with citizen based taxation. Right now the laws are not even between US resident and nonUS resident – non US persons are being discriminated against in a way that does not appear “Constitutional” according to the U.S. Constituion. On the U.S. side they could recognise long term residents of other countries and exempt the personal residence, retirement accounts, foreign life insurance payouts, and raise all the exemptions that kind of get lost when there is a nonUS person spouse. For instance with the Obamacare tax the thresholod is much lower for married filing separately as opposed to married filing jointly, in a way that penalises US citizen families abroad when a non US spouse is involved. There could be removal of aspects of FATCA and CBT that impede Canadian business activities of US citizens tax resident in Canada.
@Whitekat, if you e-mailed your issue then you may include links on the e-mail, at how unfair it all is. Maybe better to pick outside sources rather than this Society such as:
Our dear Lynne had some good ones:
http://taxconnections.com/taxblog/why-does-u-s-congress-and-irs-want-a-canadian-cop/#.U82eorFa9LN
http://online.wsj.com/articles/kuenzi-american-expats-tax-nightmare-1404924705
The whole approach needs to be better organised on this website: Objectives, arguments, wording, even some action plans in addition to the ADCS approach.
Given Poilevre’s doublespeak defences of the Election Reform measures this spring, this response from him is not surprising. This guy is a loyal soldier in the Harper regime and has learned well from watching the Bush administration in action and communication.
Is Conservative MP of Nepean-Carleton, Pierre Poilievre an ass or merely dishonest?
@nervousinvestor…I think it is dishonest ass.
He is just protecting his pension and salary. Dishonesty in our politicians is at an all time high. What can you do about it? Absolutely nothing. They can sit there and get away with murder as you sit and do nothing. This is not the Canada I want. Action is the only way and we need it now more than ever. This has gone on far enough. The people will be at war with the Canadian government. I just wish people would listen and act. We are doomed as a country if we stay on the path we are going down. There is nothing “honorable” about most politicians and leaders, sorry to say. The walls protecting our dishonest government MUST be removed period!
Poilevre is very ambitious and because of this, he makes a great little front line soldier in the Conservative offensive.
They are on the offensive and not just where FATCA is concerned. The polling continues to be troubling with the Liberals stubbornly clinging to leads in the public favor as more and more Canadians simply tire of business as usual under the Conservative boot heel – the lack of accountibility, the secrecy, the mean-spiritedness, and the decidedly anti-Canadian regard for civil and human rights.
Poilevre is an odd pick as a front man though, imo, because he isn’t very personable and who wants to be lectured to by someone who looks like a high schooler in his older brother’s suit?
Here’s how the US can fulfill the reciprocity promises in the IGAs. Nationalize the US financial system. http://www.nationalreview.com/article/383185/federal-reserve-overreaches-iain-murray
I have heard nothing to suggest that Justin Trudeau is conscious and if he is conscious that he cares about the FATCA and other Constitution busting stuff that is going on. Seems to me that the NDP and the Greens are the hope for Canada (and thus those of us in third countries).
@JC
Thank you for your very insightful and productive recommendations on how to fix this untenable situation. While my heart says follow Native Canadian, my rational side agrees with legal action. I do agree that it needs to be spelled out for all Canadians to understand the depth of this incursion into national policy and that outreach needs to be done sooner than later. I wish we could afford to blitz the media with one page ads in the national papers, spots on TV, in addition to large scale protests so that the populace is stirred from its complacency, and the government hears the roar of anger. Alas our money is going to the legal challenge which it must but the hiding of one’s head in the sand must come to an end.
One thing that does concern me is that now, since we as Canadians pay higher taxes in Canada we would not owe tax to the US. I keep hearing that from most US persons that I speak to.” Oh I won’t owe any funds to the IRS since I pay more here”. If the US is backed against the wall for $$ there is nothing that will stop them to change this law. We see it with FATCA. Since monetary sanctions at the banks are high, our Government will sign anything just to stay afloat. I cringe when I hear the Cons are going along with sanctions against Russia because of the terrible ML17 accident when it hasn’t yet been determined if it was in fact a missile. Guilty before proven innocent! I don’t condone Putin in the least but I give him credit for being a little smarter than that! Keystone Cops rise again.
Ann,
We somehow have to convince those US souls that it is not so much what tax they will owe as what draconian penalties they will owe. Are they filing all their US citizenship requires them to file? Are they aware of the difference between US citizenship-based taxation and the rest of the world’s (save Eritrea) residence-based taxation? It is a hard sell to these people who refuse to believe they would be affected. It doesn’t make any sense to them — anymore than it does to us who know what US Persons Abroad face.
This should be in the media until they do understand, but it appears our media serves corporations more than people with the awareness they need on issues such as ours.
Let’s call it the POMG moment. Pre-OMG moment, Calgary411.
@Calgary and @Bubblebustin, many ordinary middle class Expats could still actually wind up owing significant double taxation due to mismatching tax systems, even if Canada’s overall rate of income tax is higher. Think PFICS and capital gains taxes on the sale of one’s principal residence….I’m afraid the whole point of pedantically getting back into compliance will reveal these horrors. Many will find that they will in fact be owing taxes to the US even if they aren’t hit with FBAR fines…
The revised streamlined seems outwardly softer, but if Expats knowingly avoid getting into compliance, they could risk being accused of willfulness…before FATCA, they could generally remain below the radar, especially if minnows. But now there will be less leeway if people are discovered, etc.
This MP hasn’t thought about the future.
It’s 2018 and here’s a note left on the desk of the new IRS Commissioner from the outgoing one.
@Ann; @Calgary411; @Moaner
Re: ‘Oh I won’t owe any funds to the IRS since I pay more here”
Maybe this could be a title for an article.
Let’s not forget the new Obamacare tax:
http://www.forbes.com/sites/lewissaret/2013/03/14/code-sec-1411-what-the-new-3-8-medicare-surtax-mean-for-you-and-your-investments/ 3.8% on investments.
The threshold is $250,000 for married couples filing jointly, $125,000 for married couples filing separately, $200,000 for everyone else. We see here discrimination for Americans abroad with nonUS citizen spouse as they don’t have option of filing jointly, and there is a marriage penalty out of it – so the lowest threshold will apply.
This Obamacare tax is a new one and it is not on earnings, not an increase to an existing dividend tax, not an increase to an existing capital gain tax, and not an existing tax that both Canada and the US have. It escapes the tax treaty double tax avoidance, and sails through right on top.
If you are in a country where your retirement account annual gain gets put on top of your earnings to compute your gross income then that is more exposure.
This Obamacare tax is potentially an every year impact (or potentially when there is a sale of assets to exceed the thresholds), while some less noticeable taxes such as sale of residence and inheritance tax are much less frequent during ones lifetime.
Why aren’t you guys talking about getting the Canada-U.S. tax treaty revised to exclude all of the above for Canadian residents? Even without FATCA these laws are still in place, and as we see by the Obamacare tax there is a tendency for the laws to get more complex and therefore require greater time and expense in compliance.
Having said all the above the ADCS challenge is, I believe, is a very good way to go.
Here is an Obamacare post of past. I haven’t read through it again yet, but I’ll put it here now so others might want to revisit and weigh in on that post, the comments there and JC’s current comment.
http://isaacbrocksociety.ca/2014/03/16/americansabroad-must-pay-the-extra-3-8-obamacare-surtax-for-this/
@Calgary411
I just posted on that thread today that Obamacare may just be dead, at least in red states…
http://isaacbrocksociety.ca/2014/03/16/americansabroad-must-pay-the-extra-3-8-obamacare-surtax-for-this/comment-page-4/#comment-2315382
@bubblebustin
That article in only about a major setback for implementation in the U.S. – and how millions of homelanders will now potentially find it even less affordable as they do not get a tax credit as part of the package. No hinderance to the “Obamacare” tax.
Thanks, bubblebustin. Here’s one from today: July 23, 2014, HIX: Two court rulings issued this week taking opposing views on the legality of subsidies granted to individuals who enroll in the public health care exchanges have the potential to further delay the employer mandate, say some legal experts.
@WhiteKat:
Your comments:
“We should all be very afraid, and not just those of us with ‘US person’ status or having a ‘US person’ in the immediate family. It would not be hard for me to hide, as I don’t have much. I am more afraid for the future of all of us. What kind of country do we live in, that would do this to a subset of its own citizens? This makes me very angry, and very sad.”
You are not alone and there will be many more joining us when the realization hits. Even here, the true ramifications seem to somehow escape us.
Taking in the IGA wording in conjunction with the complete obtuse behaviour of the government mps along with the arrogance of the banking representatives evident in their presence and ‘testimony’ during the Finance Committee hearings it is not hard to figure what has happened and what is planned for the future.
( I have to stop here and reflect what it was like watching Lynne in her video deposition: She was so incisive and accurate. Combative in such a ladylike way and EFFECTIVE it was had to watch the Conservative MPs disavow her every word and the banking rep swivel in his chair and make declarations so obviously false while denying what is so obviously the truth: THEY are getting exactly what they want from this IGA and they intend for the very people whose money it is they guard and consider their own to be destroyed entirely for generations to come if not for all time. )
And here are the reasons for our anger and resolve:The very vehicle that would protect Canadians and Permanent Residents in Canada was rejected out of hand, BECAUSE they have a plan to fleece us all.
This is not just a one time hit on money and savings that do not belong to them. It is generational and, like the octopus it is, invades and entwines every financial aspect of an individual’s life and the lives of everyone and everything their ‘targets’ have anything remotely to do with in their everyday life and financial dealings for ALL time.
We have to consider this as the most serious assault on innocent people ever in the history of what used to be called Western Democracy.
The US now calls itself a ‘captured operation’ and see themselves as being moved into actual slavery.
What we have to contemplate in Canada is slavery by association but slavery nonetheless.
The IGA could have protected Canadians but it only protects the banks, who, after all got the government to insert a ‘bail in’ clause so they can legally take ALL your money.
And all the while the OECD plots to employ THEIR version of FATCA in September.( let’s not forget the wording in the IGA ‘complies with OECD guidelines’)
In which all countries of the world will be caught in their evil net of every individual and company , large and small, on the planet complying with their tax regime in which everyone pays and nobody gets off the ‘hook’ of ‘tax evasion’. For if the OECD cannot pry into your private life to glean where every shiny penny resides, you are then a tax evader. This from people who have been hired with US tax dollars with instructions to create a web from which no one on earth can escape while their salaries are tax free. Whether it is IRS or OECD it is theft. They did not spend a lifetime earning the money they intend to steal nor are they beneficiaries of that work and effort, but they will take it for their own nefarious and evil intent. ( OECD is RESIDENCY based, thereby erasing sovereignty and borders worldwide).
Has it occurred to any of us why the US southern border is being overrun and there is not a whisper about the Canadian border?
The IGA our government signed made Canada a captured operation for the implementing of the North American region. For in the IGA is the Trojan Horse of ‘US person’ that will destroy the Canadian economy if allowed to continue. And it CANNOT be allowed. For it effectively transfers the wealth of Canadians throughout the country and companies as well to the US Treasury.
Our hopes are pinned to the Charter challenge here in Canada and James Bopps Republican court challenge in the US.
IF everyone of us understood completely what is at stake for us all , for now and in the future, Stephen would never have to ask for a dime. It would flood in, cascading around his feet up to his hips and beyond!
And they MUST be stopped.
Don’t I know it, Moaner. Why do you think they want six years worth of FBAR’s? Follow the money.