43 thoughts on “Privacy Commissioner’s information office says *don’t bug us* in disappointing response to questions about Canadian privacy rights…”

1. @Tricia,
   good time to revisit the response of the NZ government re the conflict re privacy laws and the CLEARLY STATED REASON that their Privacy Commissioner consciously CHOSE not to “OPPOSE”:
   https://www.privacy.org.nz/news-and-publications/guidance-resources/fatca-faqs/

   “FAQs on FATCA”
   03/04/2014 1:34pm

   “Why is it a privacy issue?

   Under the Privacy Act, organisations such as financial institutions are only allowed to collect and disclose personal information, including bank account details, under a limited set of circumstances. If there was no legislative authority, it would not be possible in many cases to disclose the information needed for FATCA compliance, unless consent had been given.

   What would happen if New Zealand didn’t pass a law to allow FATCA reporting?

   If there was no change to New Zealand law, financial institutions in this country would, unless certain exceptions applied, have to pay a 30 percent withholding tax on certain US income. This financial cost would undoubtedly be passed on to a broad range of New Zealand consumers.

   Most New Zealand banks receive some US income. For instance, US Treasury bonds play an important role in setting global interest rates, and are often used by banks to reduce their exposure to interest rate risk.

   If New Zealand did not pass a law to allow FATCA reporting, banks and other financial institutions in this country may be unable to comply with FATCA without breaching the privacy principles relating to the collection and disclosure of client information.

   If New Zealand did not negotiate an IGA with the US, the effect on American citizens and green card holders resident in New Zealand would be that it would be easier for them to avoid meeting their obligations to pay tax in the United States.

   However, a significant portion of these tax obligations can be discounted by tax paid in New Zealand under the US-New Zealand double taxation agreement.

   For these reasons, the Privacy Commissioner has not opposed the negotiation of the FATCA IGA with the US, and the amending tax law to implement the IGA.” …………

   The G20 and all these countries including Canada talk to each other about these issues and obviously the US Treasury had been feeding them lines re the IGAs, because frequently the exact same wording was used.

2. I’ve updated this post with your new information, Blaze.

3. Thanks Blaze. I hope you don’t get stonewalled now that you’ve backed them into a corner.

4. Here’s the Con version;
   from;
   ‘Frequently Asked Questions: Foreign Account Tax Compliance Act (FATCA) and the Intergovernmental Agreement for the Enhanced Exchange of Tax Information under the Canada-U.S. Tax Convention’

   ‘Why is the U.S. interested in signing IGAs?’;

   “…..However, potential conflicts with the privacy rules in Canada, and a number of other leading economies, may prevent most major non-U.S. financial institutions from complying with FATCA in its original form. This raised the risk that FATCA would fail to achieve its main objective, and would create disruptive effects on financial markets through the imposition of the 30 percent FATCA withholding tax.

   The Government of Canada advanced the principle that, in seeking to meet the objectives of FATCA, greater reliance should be placed on the exchange of information provisions that already exist in agreements such as the Canada-U.S. tax treaty. The Government is pleased that the U.S. accepted this principle, which led to the development of the IGA approach and its application worldwide as an alternative to FATCA. This approach fulfills the U.S. objective of enhanced information collection, without entailing the risk that a unilateral U.S. approach could conflict with foreign laws.”……

   “Does the IGA respect the privacy rights of Canadians?

   “FATCA has raised a number of concerns in Canada – among both dual Canada-U.S. citizens and Canadian financial institutions. One key concern was that the reporting requirements would force financial institutions to report accountholder information directly to the IRS, which would raise concerns about consistency with Canadian privacy laws.

   Under the IGA, financial institutions in Canada will not report any information directly to the IRS. Rather, relevant information on U.S. residents and U.S. citizens will be reported to the CRA, similar to existing tax reporting by financial institutions to the CRA on their clients. The exchange of tax information between Canada and the U.S., including on an automatic basis, is already a longstanding practice, is authorized under Article XXVII of the Canada-U.S. tax treaty, and includes safeguards with respect to the use of the exchanged information. The information on U.S. accountholders obtained by the CRA will be exchanged with the IRS through these existing provisions, an approach that is consistent with Canadian privacy laws.
   “…….

   Well, if you search that page for the word ‘privacy’, it comes up several times. Clearly it was seen as an important obstacle or potential obstacle. They pretend that the IGA is; “…and approach that is CONSISTENT with Canadian privacy laws.” . But really, who would believe them. They could have been banking on it being very difficult for ordinary Canadians to mount such a challenge. The David vs. Goliath factor. They could and have said whatever they thought they could get away with.

   Contrast that with the letter from Peter Hog.
   The Cons were and are aware of the letter from Peter Hogg. Has the IGA as it stands neutralized the issues he raised? He recommended that the IGA be consistent with the info already collected and remitted on non-residents – as per the existing Canada US tax treaty – info based on RESIDENCE only. Essentially similar to the IGA legislation amendment proposed by the NDP, Liberals and Greens, but voted down by the Con majority.

   Hogg’s letter should be considered in entirety, but he said in part;
   …”…….relevant Charter of Rights Provisions
   There are many aspects of FATCA and any related IGA that present significant conflict-of laws.
   privacy. human rights, federal-provincial and other issues. While each of these issues is
   important. I do not intend to address them in this letter. My focus here is to offer my opinimi that
   legislation enacted to give effect to an IGA. if not drafted sufficiently narrowly. is bound to violate
   s. 1 5 (1) of the Canadian Charter of Rights and Freedoms (the “Charter”)….”……….

   …..”….. It is possible that any legislation to give effect to an IGA would also conflict with s. 7 of the
   Charter (which protects “liberty’) and s. 8 (which protects privacy (“unreasonable search or
   seizure”)). but I confine my comments here to s. 15, the guarantee that is most clearly
   implicated by the US. proposals. The point of this letter is to urge the Government not to agree
   to an lGA which would call for federal legislation that would offend s. 15 of the Charter…………”

   And in the end Hogg recommends what the Cons didn’t do – including consulting the DOJ for an opinion as to the constitutionality of the IGA (and because justice and fairness and transparency or respect for constituents, taxpayers, citizens and residents is not their aim, the Cons won’t confirm or deny that they did or didn’t obtain such an opinion or confirm or deny whether they consulted the DOJ in any way – citing client attorney confidentiality).

   Hogg said: “………
   For these reasons, I would urge the Government not to negotiate an IGA that is based on the
   measures proposed in the US. Model IGA. The answer to the American government is surely a
   Compelling one: the legislation needed to implement your lGA would be contrary to our Charter.
   If the Government has any doubt about my view of the constitutional situation. i would urge the
   Government to seek an opinion from the constitutional section of the Department of Justice i
   am confident that they will agree with me.”

   quoted from;
   http://elizabethmaymp.ca/wp-content/uploads/peter_hogg_fatca.pdf

5. @Badger I can not wait for that letter to be used as evidence in the charter lawsuit.

   I wish it could have been used in the summary trial

6. @George

   Yes, I hope the Peter Hogg letter can be used as evidence in the charter challenge. Perhaps Mr. Hogg himself will be called to testify.

7. Isn’t it rich that the government cites attorney client privilege for not answering whether they have consulted DOJ on the issue. WE ARE the government and they are SUPPOSED to be acting on our behalf. They have NO other reason to exist.

8. @FuriousAC exactly! You can’t make this stuff up.

   @badger, Thanks for all this-even though it simply makes my head spin.
    

   The Government of Canada advanced the principle that, in seeking to meet the objectives of FATCA, greater reliance should be placed on the exchange of information provisions that already exist in agreements such as the Canada-U.S. tax treaty. The Government is pleased that the U.S. accepted this principle, which led to the development of the IGA approach and its application worldwide as an alternative to FATCA.

    
   If this is true, it is something Canada should be ASHAMED of. And it certainly makes the MPs who claimed there was no choice, & Mike Allen’s indication that the CDN delegation was not pleased with the Treasury spokeperson’s comment “Congress has spoken, ” look like a bunch of hypocrites. Perhaps its a timing mismatch but in the quoted statements, CONs are taking credit for helping the US come up with a way to impose extraterritoriality worldwide. Geez, guess the Americans couldn’t have done it without us. GRRRRRRR
    

   …similar to existing tax reporting by financial institutions to the CRA on their clients. &
   The exchange of tax information between Canada and the U.S., including on an automatic basis, is already a longstanding practice….&
   through these existing provisions, an approach that is consistent with Canadian privacy laws.

    
   Prof Cockfield certainly had some things to say about this.
   1) he is quite clear about the fact that previously, the banks were not allowed to reveal this level of information to the CRA due to PIPEDA
   2) previously, the information exchanged only affected temporary residents not those who are long term permanent residents.
   3) this is incredible nonsense. If it really was within the existing provisions, there would be absolutely no need for an IGA. How stupid do these people think we are?

   Prof Cockfield also emphasizes the difference in the amount/type of information that was exchanged over this long-term practice and what the IGA proposes.

   Regardless of the outcome of the Summary Trial, I cannot wait to see how the government tries to wriggle its way out of the mess it has created for itself. The Charter is a whole different kettle of fish than the not-tidy elements of the Tax Treaty.

9. http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=6597204&Language=E&Mode=1&Parl=41&Ses=2
    
   On the right hand side, go to “Explore by” click on Witnesses, click on Cockfield -will take you right to his testimony in the main body. Click on his name and the video shows up on the right side at the right spot (16’37” of the overall video)
    

   What’s different between FATCA and the current regime? In fact, Canada and the United States already share more tax information with each other than they do with any other country in the world. We have automatic information exchange in place under the Canada–U.S. tax treaty. However FATCA is really a sea change in this cross-border tax information relationship in two key ways.
   One, it targets different people. Under our current regime, it focuses on temporary residents in each country. Here, we have a focus by the United States on permanent residents in Canada—of course, U.S. citizens, dual citizens, joint account holders with U.S. persons, and so on. This is what, I think, upset our former and late finance minister Jim Flaherty, who was one of the globe’s most vocal critics of FATCA when it was initially legislated by the Americans.
   The second real change is the   type of information
   we’re thinking about sending across the border. Currently, we track so-called cross-border portfolio income, interest, dividends, and so on. Here, the Americans want us to hand over account information, including deposits and withdrawals. Under current Canadian domestic law, banks do not provide that to the CRA. They only provide income information that’s needed to assess a taxpayer’s tax liability.

10. @Tricia, lots of food for thought. So very thankful for Hogg’s letter, for Cockfield’s reports and for Allison Christian’s analysis and part in the submission to Finance. I find I have to reread everything because I forget, or something else strikes me as significant on revisiting it. Having you and others look at it too and comment is so very valuable. I didn’t realize what you noticed re the seeming credit taken for the inception of the IGAs. We aren’t lawyers, but the glaring contradictions and criminal absurdities are so very evident and I hope will come out at the proceedings to come.

    It is unconscionable that our own government – which has a duty of care and a fiduciary duty to us is forcing us into this David vs. Goliath contest to get justice. And that all of us whereever in the world we reside are forced to attend to these issues provoked by US might-makes-right arrogance rather than some other situations that we might rather pursue.

11. @Blaze,

    Yes, looking at the article it seems very familiar.

    “the CONs would not allow….” this is a democracy?

    hmmmmmm a brief glance at Mr. Therrien’s statement on C-51 would imply he could not possibly find C-31 acceptable………more time needed….

    Great work Blaze! You and Nathan Cullen! Once something has your attention, you WON’T let go. Just love that………

12. Interesting remarks by Koskinen which were cited recently by a blog response to some very astute questions put by Trish Moon (bravo and many ongoing thanks to you Trish! ) http://tax-expatriation.com/2015/08/28/letter-from-your-non-u-s-bank-regarding-chapter-4-of-subtitle-a-of-the-u-s-internal-revenue-code-aka-fatca/comment-page-1/#comment-7657

    Patrick K. Martin’s blog response cites in part remarks by IRS Commissioner Koskinen on FATCA and IDES
    (IF you feel comfortable visiting the IRS website and you want the IRS web link it is http://www.irs.gov/PUP/irs/Commissioner%20Koskinen%27s%20Remarks%20at%20US%20CIB%20and%20OECD%20Int%20Tax%20Conf%20June%202014.pdf otherwise, Koskinen’s remarks are reproduced here ).

    Koskinen claims re IDES; “…we take very seriously the need to ensure that the financial data transmitted through IDES will be transmitted securely, kept confidential, and used only for tax purposes. Protecting this information and assuring its intended use must be our number-one goal. Toward that end, we designed IDES to include state-of-the-art encryption protocols, and we developed a set of safeguard standards addressing the security and use of data once it is received by a government….”……”during the past several months, we have been conducting bilateral meetings with each one of our reciprocal FATCA partners to ensure that our safeguard needs are understood and that we and our partners achieve a high level of comfort that FATCA data will be kept confidential and used only for tax purposes, as our treaty and information exchange agreements contemplate.”……

    If you don’t want to click through to the IRS link, it was cited and Koskinen’s remarks were quoted in the blog author’s response to Trish’s comment at;
    http://tax-expatriation.com/2015/08/28/letter-from-your-non-u-s-bank-regarding-chapter-4-of-subtitle-a-of-the-u-s-internal-revenue-code-aka-fatca/comment-page-1/#comment-7657

    Would be very interesting to know what the discussions were between the IRS and the FATCA signatories like Canada re our data security and IDES, because the IRS has already been chastised by the GAO several times because of its lack of sufficient security for the data it already collects at home in the US. The latest is here;
    ‘ Information Security: IRS Needs to Continue Improving Controls over Financial and Taxpayer Data ‘
    GAO-15-337: Published: Mar 19, 2015. Publicly Released: Mar 19, 2015.
    http://www.gao.gov/products/GAO-15-337 .

    The FATCA signatory governments including Canada are totally incompetent if they are not concerned that the US Patriot Act provisions override any lame privacy assurances the US might make anyway, once the data crosses into the US. It is already an ongoing issue inside the US (ex. see http://www.washingtontimes.com/news/2015/mar/25/editorial-congress-must-correct-patriot-act/ ).

    It is difficult to believe that the Canadian government and the other FATCA signatories are not completely aware of the intent and effect of the Patriot Act on the data non-US countries will be shipping to the US, as the effect of the Patriot Act on Canadian residents’ personal information has already been raised in various venues such as BC, by the BC Privacy Commissioner as far back as 2004 (see; ‘Privacy and the USA Patriot Act Implications for British Columbia Public Sector Outsourcing’ https://www.oipc.bc.ca/special-reports/1271 ). We know that the US Patriot and other US laws have been an ongoing concern of EU MEPs such as Sophie in’t Veld http://www.europarl.europa.eu/sides/getDoc.do?type=CRE&reference=20120215&secondRef=ITEM-019&language=EN and has been brought to the attention of the EU Parliament several times.

    That the US Patriot Act would apply to data remitted to the US once it enters into US hands was confirmed by remarks made by Prof. Arthur Cockfield https://dl.dropboxusercontent.com/s/60r4kgrxxtjd84g/24%20panel%204%20speaker%203%20Arthur%20Cockfield.mp3?dl=1&token_hash=AAEq-FGCh2XKKlaQeihquw8wyLnJO5OH2zPcfOHG6pyTYQ at the Privacy Commissioner of Canada’s sponsored event https://ccla.org/pathways2privacy/ Pathways 2 Privacy Symposium 2014 as well as raised years earlier in the 2004 report ; ‘Privacy and the USA Patriot Act
    Implications for British Columbia Public Sector Outsourcing’ ( https://www.oipc.bc.ca/special-reports/1271 PDF online ).

    That the Canadian government and the Conservatives are entirely aware of the interactions between FATCA and the US Patriot Act and the concomitant privacy issues is in no doubt, as they have been told from several people, several times, and in several different instances ( ex. https://openparliament.ca/committees/finance/41-2/31/murray-rankin-25/ https://openparliament.ca/committees/finance/41-2/31/murray-rankin-24/ ) https://www.priv.gc.ca/resource/cp/2013-2014/p_201314_02_e.asp http://www.cfib-fcei.ca/english/article/5325-us-law-could-erase-privacy-protections-are-you-affected.html , http://elizabethmaymp.ca/wp-content/uploads/peter_hogg_fatca.pdf http://ssrn.com/abstract=2407264 or http://dx.doi.org/10.2139/ssrn.2407264 http://www.theglobeandmail.com/news/politics/canadas-information-sharing-deal-with-us-under-fire/article12913617/ http://www.canadianbusiness.com/business-news/canada-u-s-tax-information-sharing-deal-open-to-abuse-privacy-commissioner/ https://fipa.bc.ca/submission-ministry-of-finance-consultation-on-fatca/ ) , etc. ). And under the Patriot Act, those affected don’t have to be notified, so we would never know (and presumably they would not have to notify the CRA or Canada) and there is also no recourse under the Patriot Act. The CRA would already know this, as would the DOJ of Canada who are defending against the ADCS lawsuit.

13. Worth reading in entirety:

    Here is what FIPA the BC Freedom of Information and Privacy Act Association submitted to the Ministry of Finance re FATCA
    https://fipa.bc.ca/submission-ministry-of-finance-consultation-on-fatca/
    ‘ Submission: Ministry of Finance consultation on FATCA’
    March 11, 2014 • IN CATEGORIES: Policy Submissions and Letters Privacy

    “FIPA’s submission to a consultation by the federal Ministry of Finance on the implementation of the American Foreign Account Tax Compliance Act (FATCA) in Canada. We highlighted the damage this would do to privacy rights as Canadians living in the US, and Americans living in Canada could have their financial information identified for sending to the Internal Revenue Service in Washington DC.”

    Download submission
    https://fipa.bc.ca/wordpress/wp-content/uploads/2014/03/MoF-consult-sub-signed-Mar-10-2014.pdf

    They had to obtain information via an FOIA request in order to write the report.

    FIPA states that it is:
    ” …..a non-partisan, non-profit society that was established in 1991 to promote and defend freedom of information and privacy rights in Canada. Our goal is to empower citizens by increasing their access to information and their control over their own personal information. We serve a wide variety of individuals and organizations through programs of public education, public assistance, research, and law reform. We are one of very few public interest groups in Canada devoted solely to the advancement of freedom of information (FOI) and privacy rights.”

14. @ badger
    FIPA looks like a very valuable BC organization. I’d love to see it evolve into a national organization with all the provinces and territories active. We need to get transparency into our provincial and federal governments while fortifying our individual privacy rights.

15. See this from FIPA too.
    https://fipa.bc.ca/us-trade-representative-calls-bc-privacy-law-a-trade-barrier/
    https://fipa.bc.ca/wordpress/wp-content/uploads/library/Released_through_FOI/USTR%20TPP.pdf

    Read through and consider:

    So, some Canadian data is deemed by the Cons to protect and invoke national security exceptions, and to keep on Canadian soil, and protected from the US Patriot Act, but under FATCA our personal and family information, our legal local Canadian family accounts and assets and our small business account information is exposed – by FATCA and by the Patriot Act. Some Canadian data is protected from US claims of trade barriers, but the application of US FATCA to Canadian owned businesses is not. The Canadian Finance Minister Oliver is happy to exert himself to state that he believes, AND has a”strong legal basis” that the Volcker rule is against NAFTA, http://www.cbc.ca/news/business/volcker-rule-in-bank-reforms-violates-nafta-joe-oliver-argues-1.3072466 but applauds the US FATCA IGA and tells individual Canadian citizens to go get stuffed and advises them to pay for private US tax advice on how to comply http://maplesandbox.ca/2014/letter-late-from-joe-oliver-on-fatca/ .

    Contrast his advice to Blaze on FATCA with his public statements in the press opposing the US Volcker rule; Oliver said: “………“I believe—with strong legal basis—that this rule violates the terms of the Nafta agreement,” Mr. Oliver told a securities industry audience in New York that included the U.S. ambassador to Canada, Bruce Heyman. “I hope the United States administration sees that changing the Volcker rule is in its own best interests and that of its biggest trading partner.”

    A spokeswoman for Mr. Oliver said Canada is engaged in talks with the U.S. Treasury regarding the rule, and Mr. Oliver has raised it in bilateral meetings with U.S. Treasury Secretary Jacob Lew.

    In 2012, former Canadian Finance Minister Jim Flaherty wrote to former Treasury Secretary Timothy Geithner to express concerns about the law, which he warned “would have an unprecedented extraterritorial reach and significant crossborder effects, which would be particularly problematic for Canada, given the close interlinkages between the U.S. and Canadian financial systems.”……”…
    http://www.wsj.com/articles/canadas-finance-minister-says-volcker-rule-violates-nafta-1431541914

    The WTO and NAFTA implications of the trade and data protection issues are raised in the documents above, as obtained by FIPA, but the Canadian government refuses to raise them re US extraterritorial FATCA – despite the points raised by Arthur Cockfield https://openparliament.ca/committees/finance/41-2/34/prof-arthur-cockfield-1/
    Prof. Arthur Cockfield (Professor, Faculty of Law, Queen’s University, As an Individual) at the Finance Committee on May 13th, 2014. and http://ccla.org/oldsite/wp-content/uploads/2014/03/FATCA-and-the-Erosion-of-Taxpayer-Privacy-U-of-T-2014.pptx http://www.tax-news.com/articles/_FATCA_Sea_Change__571885.html

    As Cockfield notes re the business aspect:
    “….Cockfield, who has written a book on North American Free Trade Agreement (NAFTA), pointed out problems FATCA creates for Canadian businesses. ‘A U.S. person who substantially owns a Canadian business will now have a foreign government looking at that account information. It could, in my view, harm cross-border competition, frustrate cross-border mobility. I believe it violates the NAFTA agreement…….”…..
    http://www.tax-news.com/articles/_FATCA_Sea_Change__571885.html

16. @Embee, I’m wondering if there are any similar organizations in the other provinces. Where is Ontario on these issues?

17. Looks like FIPA was already noted at IBS in 2014;
    http://isaacbrocksociety.ca/2014/03/18/jon-mccomb-on-world-today-interviews-vincent-gogolek-from-the-bc-freedom-of-information-and-privacy-association-on-fatca/comment-page-1/#comment-1246833

    IBS is so full of valuable info nuggets that I’m just rediscovering what has already been discovered! Good to dust it off for a second look?

18. @ badger
    I couldn’t find an Alberta equivalent … no surprise I guess.