92 thoughts on “Tune Into CBC “All in a Day” at 4:45 EST pm today – John Richardson interview”

1. Should we be talking with this agency? Canadian Human Rights Tribunal

   
    

   About The CHRT

   The purpose of the Canadian Human Rights Act is to protect individuals from discrimination. It states that all Canadians have the right to equality, equal opportunity, fair treatment, and an environment free of discrimination. The Canadian Human Rights Tribunal (CHRT) applies these principles to cases that are referred to it by the Canadian Human Rights Commission (CHRC). The Tribunal is similar to a court of law, but is less formal and only hears cases relating to discrimination. For further information about the different roles of the Tribunal and the Commission, please see About the CHRT and Jurisdiction.

   Through the coming into force of the Administrative Tribunals Support Service of Canada Act, on November 1, 2014, the Government of Canada is consolidating the provision of support services to eleven administrative tribunals – including the Canadian Human Rights Tribunal (CHRT) – into a single organization, the Administrative Tribunals Support Service of Canada (ATSSC). This administrative change does not affect the mandate of the CHRT. Case matters will continue to be filed, managed and safeguarded in accordance with existing CHRT procedures.

2. @Bubblebustin

   Interesting angle- yes the banks profit but I think I haven’t understood exactly what you mean…more protected somehow? From a purely monetary point of view, the accounts are still taxable and open to penalties for non-reporting by us.
   I know I am not getting you…

3. @Trish

   Just what is the reasoning behind the Canadian government’s effort to make these accounts non-reportable under the FATCA IGA? More importantly, why did the US agree? My lawyer seems to think that these accounts will eventually get a carve out under the treaty, like RRSP’s have. What are we to believe without any evidence of this? Who knows, maybe that’s what the new government is working on.

   There’s a pretty good chance that many Canadians affected by FATCA would simply stop investing in RDSP’s, RESP’s and TFSA’s should they were reportable to and taxable by the US. We did. A carve-out with the illusion that they won’t be taxable by the US is probably the best decision they could make to protect the bank’s revenues. Again, why did the US agree to it?

4. In the case of RRSPs, the non-reporting of these accounts was never an issue. In the original ( pre IGA) regulations it was proposed by treasury that individual retirement plans be exempt from reporting. This proposed regulation applied everywhere-not just Canada. The IGA clarified matters.
   For TFSAs,RESps, and RDSPs, who knows? Perhaps a sop to Canada’s ‘negotiators’ ; perhaps a between the lines message to Canadians not to report these accounts. perhaps a realization by the US ‘negotiators’ that there wasn’t much to be gained.

5. I like how you paraphrase ‘negotiators’, Duke. Since when do negotiators show up with baseball bats?

   Oh there’s actually more to be gained by the US for waiting to try to collect taxes after a lifetime of saving, when those fat sheltered accounts are cashed out – rather than now, when it might result in people like me choosing to rather not invest in them.

   Something smelled really fishy to me when the Cons mentioned the carve-outs and Revenue Rule in practically the same breath.

6. My comment which is awaiting moderation:

   Ms. Raitt refers to dual US-Canadian citizens living in Canada. There is no such thing. Under the “Master Nationality Rule”, a Canadian with an additional citizenship be it Iranian, Chinese, or American should be recognized and treated as Canadian only while living in Canada. Or as Justin Trudeau put it, “A Canadian is a Canadian is a Canadian.”

   With respect to the FATCA IGA, the Harper government caved with the enacting Omnibus legislation– Canadian sovereignty was ceded to the US government. Justin Trudeau and the Liberal Party spoke out against FATCA at the time but have now fallen silent on the issue. Only the Green Party and the NDP are continuing to speak out against FATCA.

   As a Liberal Party member, I am disappointed by the present government’s inaction on remedying FATCA. On a personal note, I immigrated to Canada more than two decades ago and consider myself a proud Canadian. I am angry that the previous government turned me into a second class Canadian citizen and upset that the current government is allowing the treatment to continue.

   P.S. I wrote to my Liberal MP two months ago concerning FATCA. I have yet to receive a reply. I hope CBC has better luck obtaining a response from the government

7. @Bubblebustin
   One would expect carveouts for tax-deferred accounts to be a focal point in re-negotiating the treaty; I believe we should begin pressuring them for this right now. The US cannot justify taxing accounts that are equivalent to the same savings vehicles in US. The US “granted” this (non reporting) to many countries other than Canada. After all, if the issue of reporting is to squelch tax evasion, the US cannot claim individuals who register these accounts are hiding something! Nobody who would try to avoid US tax by not reporting would leave such a paper trail…it is so ludicrous it is hard to describe. Maybe the Americans decided they didn’t need to insist because the 30% penalty was a big enough stick…or maybe they figured (correctly) that other govts, not understanding the effects of CBT would be confused enough to miss the reality. That the US will tax those “tax-deferred” accounts knowing of course, there is no FTC to offset. After all, any citizen “caught” by FATCA almost certainly would have these so the US knows it will get at these accounts in the end…obviously our government is either naive ( after capitulating to FATCA they think the US will respect the Revenue Rule?) or they realize it is so pointless they can get away with pretending they will not collect it for the US. And count on the fact we are stupid enough to believe them until it is too late anyways…..I remain uncomfortable about the idea that the US would not go to this length if they didn’t have something in mind already for the next stage. It makes me nervous that Allison mentioned (latest paper) my big concern that the US will expect branches of CDN banks in the US to do their dirty work for them. Just think of it. TD NY directs CDN branch to remit (or simply freezes) the accounts of CDNS the US is trying to collect on. Exactly who is going to have the issue brought up in a CDN court? The Harden case is not the same scenario. And Van der Mark isn’t either. And even if someone manages, as in our Summary Trial, the justification for denying our concerns is that the US has the right to tax its own citizens and they have a Treaty where Canada has agreed to the savings clause …

8. @Tricia

   Of your reasons for the carve-out of tax exempt accounts, I suspect the correct one is

   …maybe they figured (correctly) that other govts, not understanding the effects of CBT would be confused enough to miss the reality. That the US will tax those “tax-deferred” accounts knowing of course, there is no FTC to offset.

   In Australia, the Superannuation industry was clearly fooled. When we brought the issue up with one of the board members of our fund (it’s an industry fund with employee representatives on the board), the response he got back from the executive was that FATCA wasn’t a problem because the fund was exempt.

9. @Trish @Karen

   I would also agree, with a small edit:

   …maybe they figured (correctly) that other govts AND USP’s, not understanding the effects of CBT would be confused enough to miss the reality. That the US will tax those “tax-deferred” accounts knowing of course, there is no FTC to offset.

10. The Australian government now realises the US tax treatment of Superannuation and plans to negotiate an exemption next time they amend the treaty (who knows when that will be). But they are still clueless about PFICs and how the US tax rules lock US persons out of the Australian managed fund industry.

11. @Bubblebustin & Karen,

    Good job ladies, think we’ve got it! Guess they underestimated us though…we sure as hell get it….In tax class tonight, I choked upon hearing how much the CDN government matches on RDSPs: 100% plus on the bond (for lower income families) $1000 even if there is no contribution and this continues every other year up to 49 yrs of age. I was sick about this before but simply cannot believe this can be allowed to continue. We have to convince the CDNs to get these protected by the Treaty (or else, learn how to just say NOOOOOOOO).
    Karen, pls tell me if I get this correctly. An Australian HAS to contribute 9% of gross pay to a superannuation fund, which is not covered in the Treaty and will be taxed as all undistributed earnings are according to “US Law” and then again, when they are withdrawn. Is this right? Do these have to be reported as foreign trusts on 3520A and 3520?

12. Re Canadian RDSP – The maximum Grant amount is $3,500 per year, with a limit of $70,000 over your lifetime and, yes, grants of $1,000 for low income, no contributions required. Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59.

    Age Matters:

    49 years: the last year that RDSP Grants/Bonds can be contributed
    59 years: is the last year that a person can contribute to their RDSP- compared to an RRSP a person can contribute up to the age of 71
    83 years: the age used in the LDAP formula to calculate RDSP payments as the average life span of the persons with disabilities

    Contributions that are withdrawn are not included in income for the beneficiary when they are paid out of an RDSP. However, the Canada disability savings grant (grant), the Canada disability savings bond (bond), investment income earned in the plan, and rollover amounts are included in the beneficiary’s income for tax purposes when they are paid out of the RDSP.

    However,

    This is the way the Canadian RDSP is taxed by the US for US Persons in Canada:

    1. If the sponsor / Holder of an RDSP (or RESP for that matter) is a US person then (US person analysis of the beneficiary is irrelevant):

    a. The income generated by the RDSP is taxed to the US person sponsor currently as it is earned

    b. The grant is taxed to the US person sponsor when it is distributed to the beneficiary

    c. US person sponsor must file 3520A annually

    d. US person sponsor must file 3520 annually

    2. If the sponsor / Holder of a RDSP (or RESP) is NOT a US person, AND the beneficiary is a US person then:

    a. The income generated by the RDSP (RESP) is taxed to the US beneficiary currently as it is earned

    b. The grant is taxed to the US person beneficiary when it is distributed

    c. US person beneficiary must file 3520 annually (no 3520A)

    Neither RDSPs nor RESPs are covered by the Canada / US Tax Treaty.

    Is it not discriminatory that any Canadian person or their family should have to refrain from this investment meant for ALL Canadians with a CRA recognized (Disability Tax Credit certified) disability should they be deemed by the US a US citizen or person and an unwise investment for them? Same for the RESP and the TFSA, all *US foreign trusts*? Some of these same people (those without *requisite mental capacity*) cannot renounce a US-deemed US citizenship, nor can a parent, a guardian or a trustee act to do so on such a person’s behalf.

13. When exactly is “next time they negotiate the tax treaty” — for any country with the U.S.? I don’t picture that as being on anyone’s urgent to-do list. It would be easier, of course, to fix all the various tax treaty gaps by just getting rid of CBT.

14. The Australian government now realises the US tax treatment of Superannuation and plans to negotiate an exemption

    @Karen please provide link/source. Who might I reinforce this with?

    Re: carve outs. I think that there was no thinking involved. Many homelanders can not fathom that if you live in another country that they tax you there and they have their own IRS to chase you. So if you are not getting taxed overseas than no issue!

15. @Tricia
    The current superannuation contribution rate is 9.5%, with a schedule for it rising to 12% over the next several years (they keep changing the schedule, the final increase is slated for 2025). Generally, if a job is advertised as paying, say, A$50,000, your take home pay is based on 50k less tax deductions, and the employer contributes an additional A$4,750 into your nominated fund. There are several different types of funds (retail funds run by the banks, industry funds run by the unions, corporate funds run by large employers, and government funds run by state and federal governments). Each type has a slightly different legal structure, which can affect how they are treated under US tax law. Of course, no one in the US tax condor industry really understands these funds, so if you ask 5 different tax professionals how they should be reported, you’re likely to get 7-8 different answers. I have heard answers varying from a) it’s an “unqualified” plan with contributions taxed on entry and appreciation taxed on withdrawal; to b) it’s a foreign trust which owns a collection of PFICs with all the associated reporting hassle; to c) contributions and income inside the fund are taxable year by year with no tax on withdrawal. To add to the confusion, there are still some defined benefit plans available within the superannuation system.

    @canoe — renegotiation cycle? who knows! In Australia the original treaty was written in 1983, the protocol negotiated in 2004 and they are not currently working on the next version AFAIK. So +/-20 years?

    @JC — sorry, I don’t have a specific cite for this. It is based on private correspondence and conversations with people who should know. Will let you know if I find something more concrete.

16. Dear CBC,

    Wish one of us were among these ten — if it works, will it be repeated and could some *US Person* affected by FATCA be among the group?

    http://www.cbc.ca/news/politics/mansbridge-face-to-face-trudeau-1.3424017

    We’re calling it “Face to Face” and it’s exciting and unpredictable. It’s access in a very real and different way.

    In a nutshell, here’s how it will work. We have selected, and let me underline that, WE have selected, without any consultation with the prime minister’s office, 10 Canadians from across the country, all of whom have a particular concern about a specific issue, as the Trudeau government reaches 100 days since the election.

    We have brought these Canadians to Ottawa where each will get 10 minutes, alone, with Justin Trudeau, in his office, to make their case and hear his answers.

    When I say alone I mean: no PMO staffers, no security (the RCMP will have vetted the participants), no Peter Mansbridge hovering over the scene getting in the way. Just the prime minister and each of these individuals, face to face.

    CBC’s Chief Political Correspondent Peter Mansbridge meets the 10 Canadians selected for some individual face-time with Prime Minister Justin Trudeau this week. You can watch the results of their interviews Sunday night at 8 on CBC News Network and online, and at 9 on your local stations. (CBC)

    There will be two CBC camera operators in the room to capture the moment for you and the rest of the country.

    What’s more, all 10 of those encounters will have been shot before we go to air Sunday night, and the best moments of each will be featured in our broadcast, with the full sessions to be available in their entirety online.

    Prime Minister Trudeau will also join us at that time as we review the encounters and the issues they reveal.

    All that will unfold in front of an audience inside the Parliament buildings.

    Will it work? Who knows? That’s the beauty of unpredictable television.

    TV that breaks the format. TV that challenges new boundaries looking for something different.

    Ultimately you’ll be the judge, and we know you’ll not be shy about giving us your verdict.

17. Pretty slim chance they’d be one of ‘us’, but you never know.