Alberta online bank first in Canada to shun U.S. clients amid tax rules
Some highlights from Barrie McKenna’s new Globe and Mail article:
“The information and documentation required to open and monitor an account within [Canadian Direct Financial] for a U.S citizen or resident outside of Canada is prohibitive to providing the level of service our clients expect and deserve,” explained Kirby Hill, a Canadian Western Bank vice-president and spokesman.
A number of financial institutions in Europe and elsewhere are already balking at doing business with Americans. But Canadian Direct Financial is believed to be a Canadian first.
Canadian Bankers Association spokeswoman Maura Drew-Lytle said she was unaware of any Canadian banks refusing to do business with Americans.
“It’s discrimination based on nationality,” said Kevyn Nightingale, a U.S. tax specialist at accounting firm MNP LLP in Toronto. “FATCA has put financial institutions in a conundrum.” Mr. Nightingale said the steep compliance costs simply aren’t worth the effort for some mid-sized financial institutions.
“I’m amazed this is the first one I’ve seen so far,” he said. “I would expect there would be more.”
Patricia Moon of Toronto, who renounced her U.S. citizenship more than two years ago, said the Alberta bank’s decision not to do business with Americans “demonstrates the harm” caused by Canada’s decision to share data with U.S. tax authorities.
“If all the banks started doing this, where are you going to open an account?” wondered Ms. Moon, a director of the Alliance for the Defence of Canadian Sovereignty, which is suing the Canadian government over its decision to share personal financial information with the U.S.
Excellent article and comments from Brockers!
One commenter posted a link that said Atlantic Lotto is banning Americans from winning. As I don’t gamble, I wasn’t aware of this, so I went to the link:
http://themanatee.net/2015/02/19/atlantic-lotto-to-ban-americans-from-winning/
Sure enough, there I read the Atlantic Lotto person said: “We discovered the other 12 percent was being paid to the IRS as income tax by American residents living in New Brunswick. We were shocked to learn America taxes its citizens on top of Canada’s taxes, and they tax lottery winnings too. . . All of our large payouts are made by direct deposit, and we will be instructing banks to reject all transfers to American persons.”
Our NB premier, Brian Gallant, supports the lottery’s decision. “Too much of the winnings are being paid to the IRS, and it’s costing New Brunswickers jobs. They may continue to play though,” Gallant said. “We are not a cruel province. Our intent is not to deny them the ability to bet on American football and baseball. They just won’t be able to take home the payouts.” What the ?????
And at the bottom of that page it says:
Sorry. My previous comment was directed at the themantee.net article not theglobeandmail.com article.
Oops, my bad, please delete everything except the first line (about the excellent comments). It turns out that the link about the lottery goes to a satire site, so it’s not true. I misread and therefore, misspoke. Again, Do keep my first line that the comments were excellent for the Globe and Mail article.
Come on, Jan. Please keep me company as another of the satire-challenged.
http://isaacbrocksociety.ca/media-and-blog-articles-open-for-comments/comment-page-124/#comment-5603079
It amazes me that someone like Barry, is still getting this wrong: “Most other institutions must report all income earned by U.S. citizens. Banks, brokers and mutual funds that don’t comply risk having the IRS slap a 30 per cent withholding tax any income or gains they or their clients generate in the U.S.”
I made a comment asking him to correct this. It is so confusing for people to read these articles, when they do not know FATCA and CBT backwards and forwards like we do, and properly understand the issues when these kind of mistakes are made.
@Just a Canadian
It sometimes applies to the Globe and Mail 😉
The Globe and Mail article on the Alberta bank made it to the print edition where it begins on the front page of the “Business” section. The long article ends with mention of our Canadian lawsuit (the punchline). Thanks to Tricia for getting in the quote on ADCS.
@Jan, I guess I am disagreeing with you that this is an ‘excellent article’. Besides the factual error regarding FATCA being about INCOME reporting as opposed to ASSET reporting, Barry obviously does not present this as being about Canadian citizens either.
Barry refers to us as ‘US clients’ in the title, and ‘Americans’ and ‘US citizens living in Canada’ throughout the article. I believe that the closest he got to calling us CANADIANs was ‘dual Canada US citizens.’
Maybe we should refer to Mr McKenna as “apologists for America of Irish descent in Canada”.
@Jan, @Bubblebustin
Maybe themantee should publish a satirical article that says our government has banned all Canadians with the American taint from selling their houses, as 20% or so of capital gains above $500K are shipped south of the border, creating a huge economic loss to Canada.
When reading this article one must say… Can you blame them? Small Credit unions and banks cannot absorb the costs that the Canadian government is forcing on them because of the USA’s threats. The decision was made in disgrace, to allow IRS and “foreign” powers to enforce foreign laws(US) on Canadians. Again, the Conservative at the bloody hands of Stephen Harper, have screwed the “little guy” again. Every single article on this is being kept in a file here. I will be opening this file at every single campaign event of ANY Conservative who thinks he/she will be elected. Dammit, enough is enough… who’s country is this anyway?
@kermitzii
Why don’t you submit an article like this to themanatee?
@Bubblebustin:
“Maybe we should refer to Mr McKenna as “apologists for America of Irish descent in Canada”.
residing in Canada ….. “apologist for America of Irish descent RESIDING in Canada”.
I have to wonder how McKenna (and indeed the Globe’s Editorial staff) can allow the continued output of such misleading information. IF the Globe values itself as a CREDIBLE source of News and information then surely it needs to ensure that its writers desist from continuing to make such mis-statements.
Thanks for the tweak, nervousinvestor. Much better.
Barrie McKenna has what we should brand as “Gerald Keddy-itis”, in that he’s afflicted with the misbelief that FATCA has no impact on Canadians.
Amanda Lang on CBC’s “The Exchange” mentioned this issue of refusing US customers and since it was in an exchange with Rudyard Griffiths she went into pundit mode and was very sympathetic to US persons caught in the FATCA quagmire…she probably has it on podcast. I think it was during the first half hour.
@ Lake Superior Guy
Here’s the link. The brief exchange (fueled by the Canadian Direct Financial news) is almost midway in the second segment. Griffiths … Grrrrrrr, Hissss, Boooo! Amanda … fairly good attempt to defend RBT. Ginny and Gwen should NOT have to pay for American infrastructure and neither should any of us.
http://www.cbc.ca/player/Shows/Shows/The+Exchange+with+Amanda+Lang/ID/2655866498/