A paper detailing the Costs to Canada of the FATCA Agreement has been compiled and is now available. One of the two co-authors is a retired professor of economics at McMaster University. A separate document showing how the Average Annual Tax Payment was derived is also available.
This paper provides useful support for Brockers interacting with Members of Parliament as well as important information for journalists.
Here is the introductory paragraph:
This presentation is constructed to demonstrate the amount of money destined to leave Canada ANNUALLY as a direct result of compliance with the United States Foreign Account Tax Compliance Act (FATCA) regime. This money, instead of circulating in the Canadian economy, being invested to benefit Canadians or remaining in Canadian savings accounts for the future financial security of Canadians, will be paid directly to the United States Treasury where it will benefit THAT country’s residents. Another scenario is that it will be paid into the US Treasury and disappear as a meaningless footnote in the attempt to pay down its impossible multi-trillion-dollar debt.
Just Fabulous! Hopefully this will be picked up by the media and the Canadian government will FINALLY wake up to this rediculous atrocity they so willingly agreed to.
Thank you Muzzled, Stuart and Laura.
Seems that the two authors, both ‘dual’citizens would be excellent witnesses.
So why can’t Canada at least charge the going rate for supplying the info? Like: here ya go Mr IRS, special for you today AND it’ll just cost ya $2400.95 each! Isn’t that what it costs a Canadian citizen to obtain FOIA material from our own government? Not to mention what it costs the Candian citizen to revoke US citizenship. And that’ll be in US$ please and thanks.
@Woofy — a very interesting idea; any thought at all if this might be remotely considered?
Instead of Canada having to absorb the ongoing repetitive costs of FATCA, why don’t the 2 governments just agree to have Canada send one large annual cheque to the US Treasury (amount to be negotiated, something Trump would undoubtedly favor) and forget about all the rest of it? It would be cheaper, simpler, and at least recognize what FATCA’s real objective is: to transfer a portion of Canada’s wealth to the US. All this hunting of suspected US persons benefits nobody on either side of the border. The banks wouldn’t have to go on their witch hunt and the IRS wouldn’t have to process all that information. That’s a win-win.
Oh, wait, that would make too much sense and the US wouldn’t meet its secondary objective of punishing people for leaving or having been born there half a century ago.
The question begs:
What would the Canadian economy lose by not complying?
Wonderful compilation of the costs to Canada that should be made available right now to ALL Canadians.
What would the backlash be — deport us all and don’t let into Canada any other *US Citizens who happen to abide in Canada* – including the ones born in Canada and never lived a day of their lives* ????
There are costs for burying implementation of the IGA signed with the US into an omnibus Budget Bill, C-31, hoping no Canadians would notice instead of having the courage to just say NO.
I went straight to the conclusions and found this gem of a paragraph with imagery we can all relate to.
BOOM! Spot on! Many thanks to the authors.
Nice to see you around here again. You and @maz57 both offer interesting ideas. We all know that the USA is running an extortion racket so either suggestion would bring their crime to light.
Further to my suggestion, the single annual cheque scenario would eliminate all those pesky privacy and Charter issues because no information would be going across the border. This is basically a “render unto Caesar that which belongs to Caesar”. In the US’ version of reality every other country in the world owes the US because only they bear the cost of defending democracy and deploying their military to fight terrorism around the world. Maybe, just maybe, if we paid the bastards they would leave us alone, but I doubt it because they would still want to punish expats who live here.
This is all tongue in cheek, of course, but it does make a bit of perverse sense. Back when I was in business sometimes an offer to negotiate a cash settlement was the best way to resolve a dispute and usually both parties were glad the matter could be brought to a conclusion so that everybody could then move on.
Great compilation of the costs — and the capital drain FATCA/CBT impose on every nation that agreed to allow their banks to report back to the US (either directly or indirectly). I can’t believe the rest of the world signed on to having their citizens send money in to the IRS on such a large scale. It was shortsighted to believe that this was just an issue for “US citizens residing in (fill in country name)”, the whole country will pay.
Some costs are missed — and probably impossible to quantify:
To the extent that US citizens and former citizens are (relatively) impoverished by complying with CBT and the exit tax, they will be a greater burden on the social safety net of the country they live in. Australia has a means tested Age Pension for retirees, funded by the government. If a pensioner must send significant assets to the IRS to renounce, this could have an immediate impact on the Age Pension received from the government.
And, for countries like Canada and Australia with government subsidised health care, the stress caused by FATCA will bring on real health problems for some, increasing the cost of health care.
This is a brilliant piece of work. But, if I may suggest this …
As all economists know, there are:
1. Actual costs (what is detailed in this research);
2. Opportunity cost (the lost of economic opportunity had this capital not been stolen from the Canadian economy).
The “opportunity cost” is likely to be far greater.
This study should be circulated far and wide.
U.S. citizenship is a problem for countries the world over. Canada is particularly affected by this problem. How should Canada deal with the problem? What is the solution?
The best solution is NOT an annual payment of tribute to the USA.
The best solution (assuming there is any payment) would be a one time payment to simply purchase those Canadians affected by this form of U.S. Slavery. Let’s get real here. This is about “buying back the slaves”. But, the purchase should include ONLY those who are Canadian citizens. Those who are U.S. citizens only should be deported from Canada.
A week ago there was an article in the Canadian media about how a professor’s family could not stay in Canada because of the probability that he might impose a burden on Canada’s health care system.
I can’t understand how somehow it’s okay to not allow this family to stay because they would be a drain on Canada’s health care system but allow U.S. citizens to live in Canada.
This study is a quantitative expression of what we all know:
“U.S. persons in Canada” are nothing but Trojan Horse soldiers who exist only to damage to the Canadian economy. Yet Governments in Canada and around the world are either so “willfully blind” or so stupid that they can’t see this basic truth.
I ask the authors of this study to continue their fine work and consider how much the Trudeau Liberals should offer to pay the United States for a permanent “buy out” of those who the U.S. considers to be its property in Canada.
Would the methodology for the calculation be based on both (1) the actual cost of the leakage and (2) the opportunity cost of having the money remain in Canada (3) the cost of impoverishment as detailed in Karen’s comment above?
Just realizing the trouble US persons are should make it a self-correcting problem, USCA.
The widespread kicking out of Americans is unfortunately too real prospect to talk about cavalierly. The U.K. is already planning to kick out all non-EU citizens who have lived in the country for several years but are not making 35,000 pounds (about USD$50,000). These are young, able-bodied people mainly, so they don’t cost the U.K. anything like $50,000/year. Nurses are protected, but teachers are being given the boot, even if they work in hard to fill specialties. The newspapers contain many sad stories of Americans and others being kicked out for not having a salary that is well above the U.K. average.
Excellent that somebody has finally looked into this and produced some sort of estimate of how much this U.S. extortion racket, quite sinisterly disguised as a law to catch tax cheats, is costing the Canadian economy and Canadian citizens. You would have thought that even an incompetent government, such as that of Harper, and the current one as well, would have investigated this and made it public, before having signed the FATCA IGA with the U.S. extortionists or accepted inheriting it without a whimper. Apparently the extortionists’ threats of financial retribution on Canadian banks scared the poor subjugated Canadians into giving up their sovereignty and opening the Canadian tax base to the U.S. extortionists, allowing them free reign over imposing taxes and penalties of their choosing and design upon Canadian property, Canadian capital gains, Canadian mutual funds, Canadian inheritance and so much more. The extortionists are the masters over Canada’s economy, over Canada’s tax base and they solely decide what they take out and which Canadians they penalize.
If this outrage doesn’t get front page coverage, then the extortionists must also be controlling the Canadian media as well, which is most probably likely.
Look at the millions being siphoned out of Canada and then think of all the other countries in the world, with far greater populations where the extortionists have also taken control and we have the greatest shakedown ever perpetrated in history. A totally disgusting disgrace! To see the current government support all of this is beyond frightening, for if they are oblivious to what is going on, it is truly worrying and if they know about this extortion, yet do nothing to stop it, then they are complicit and that is truly and deeply terrifying.
@It Has To Stop – “…and design upon Canadian property, Canadian capital gains, Canadian mutual funds, Canadian inheritance and so much more.”
I’m well aware of the others, but can you provide explanation RE Canadian inheritance?
I don’t think it was meant cavalierly. I think a lot of people are not getting the point. Canada has 1 million expats plus families. The total population is about 35 million. The country cannot afford this over the long run. It is interesting that absolutely no financial analysis was done beyond that of the banks (who of course, only looked at their own situation) who claimed we could not sustain withholding. Well I wonder how they think we will withstand the kind of capital loss we will experience due to the IGA. They just PRESUMED the only loss would be theirs. Unfortunately, the entire country will lose.
I don’t think it is the same as what is going on in the UK. Those non-EU citizens (as long as the majority are not US Persons) are not being taxed by their home country courtesy of the UK treasury on an ongoing annual basis. Maybe there is drain on the economy but it is not due to another country imposing its system on the UK. (except for FATCA, of course).
Have read about that and it is tragic and horrible; very hard to understand how they can separate families in that way. Doesn’t it have something to do with if they have been out of the country they can’t come back in or is it just cut-and-dry based on an amount?
What this sums up is that we need representation in Parliament. We need expats running forbpublic office here. In fact we need people willing to become a political party.
We thought the government would sit up and take notice: do the right thing once they were called on the carpet yet we see that they are not seeing the Light so to speak.
What we need now is to infiltrate Parliament and become MPs ourselves.
Yes, I can see how it is different for Canada with its much greater population of U.S. persons.
Other Brockers got me thinking. Can anybody come up with a number that the Canadian government might offer the USA to buy complete form filing freedom for all US persons who are Canadian citizens or permanent residents plus FATCA report filing freedom for all Canadian financial institutions? I’m thinking of a one time payout for permanent relief for both individuals and institutions. What if there was a fund raising campaign and the government matched the amount raised dollar for dollar? So if individuals (most likely to be only “US persons”) contributed $250M and institutions contributed $250M then the government would contribute $500M to make a $1B payout. If 1 million individuals contributed that would be $250 each. If 1000 institutions contributed that would be $250,000 each. Canadian taxpayers would then pay around $20 each to make the government’s contribution to the $1B payout. These are just wild guess numbers and I have no idea what payout amount would be considered negotiable. Probably the USA would nix it anyway but this is about freedom from form slavery imposed by a country which should be a neighbour not a slave master, so I’m hoping there is some price to be put on that. Any ideas? Think of the headlines … Canadians pay millions to buy their freedom from American slave masters … Canada bribes the USA to stop the form torture … Canada offers cash to make US CBT and FATCA go bye-bye … Canada pays to make the USA become a neighbour instead of a slave master …
Although the buyout idea has come up before on Brock, it was most recently put forward by @maz57 who I now give credit for the suggestion that Canada, in essence, reverse engineer RBT for the USA by buying its exclusion from CBT and FATCA. If the USA won’t do the right thing on its own (i.e. switch to RBT and repeal FATCA) then maybe a big one-time payout will get Canadian residents off the hook. Obviously I’ve got a buy-our-freedom bee in my bonnet today.
Not sure where to put this thought, but it’s related to the topic:
I question how many forests are being felled, not only in Canada, but worldwide, for FATCA?
Some basic experience: My husband and I received a total of 5 FATCA packets from our bank for our single joint savings account. As I recall, around 12 to 14 pages of documents, instructions, and blather, plus an A4-sized envelope and a return envelope.
My brother-in-law, who has zero US taint, also received 4 FATCA packets in regard to his business account. 16 pages each.
Our son, in Hong Kong, received 4 FATCA packets. The first two went to the shredder, based on my advice. He decided to send in the third one, and just got a fourth. 12 pages, plus return envelope and A4 envelope.
Multiply these figures by millions of US-tainted persons abroad. Then multiply my brother-in-law’s packets. Though not of US taint, apparently the banks are carpet-bombing EVERY business account holder in order to cover the bank’s asses.
We’re talking tens of millions of sheets of paper, just to send out compliance letters. That doesn’t count all the internal paperwork and memos inside every bank.
Perhaps worth mentioning in any document on the costs of FATCA to Canada: in this era of global warming awareness, vast tracts of Canadian forest acreage clear cut to feed the paranoid hegemony of the US government. (On the other hand, it does give a boost to the pulp mills and paper industry, so maybe not a good idea to mention it)
“A boondoggle is a project that is considered a useless waste of both time and money, yet is often continued due to extraneous policy or political motivations.”