President Obama gave a speech to the Canadian House of Commons on Thursday, June 29, 2016. I thought his message deserved a response from a US-born Canadian. Here are my replies to excerpts of his remarks.
In his opening statement Mr. Obama addressed the “people of Canada”.
He was certainly not addressing those of us who actually hail from his country originally. In 2010 he signed into law the Foreign Account Tax Compliance Act (FATCA) by which he began the extortionate enforcement of an antique law from over 100 years ago that nobody knew about, the law of “Citizenship-based Taxation” (CBT). There are many in the Canadian population reckoned to be American by virtue of birth in the USA even though we have subsequently become Canadian citizens, and are as Canadian as the Prime Minister! Yet because of the law of CBT we are also judged to be US taxpayers until the words “I renounce my United States citizenship” comes out of our mouths at the cost of $2,350 USD, five years of back taxes, and potentially bankrupting penalties.
Belying the festival of brotherly love in the House of Commons on the 29th of June, divorcing their connection with the United States is now the primary goal of many so-called “US Persons” in Canada. This is because FATCA demands that all Canada’s banks notify the Canada Revenue Agency (CRA) of any clients suspected of being US citizens. The CRA will, in turn, hand over that information (which includes the clients’ names, their account numbers, and the balances in their accounts) to the American Internal Revenue Service (IRS). The record of a client’s birthplace is enough to set this scheme rolling.
In the few seconds it took each of us to read that dreadful news when it first hit the newspapers in Canada in June 2011 our lives were changed forever.
“…it can’t get any better than this”, said Mr. Obama of America’s relationship with Canada.
For American-born Canadians it can’t get any worse. Under Obama’s administration we have gone from free people to 2nd-class citizens in our own country, and criminals without due process in the other.
“…the extraordinary alliance and deep friendship between Canadians and Americans. Justin, thank you … for the new energy and hope that your leadership has brought to your nation. … My time in office may be nearing an end, ….”
I grew up in British Columbia not far from the “Peace Arch” on which is inscribed the words “Children of a Common Mother; may these gates never be closed”. They have clanged shut for many Canadians who are afraid to visit their native land because they are now aware that they are considered to be tax cheats there and could be subject to detention at the border.
When “Justin” was in Opposition he and his colleagues spoke eloquently against the “FATCA Intergovernmental Agreement” (IGA) that the Conservative government had struck with the USA. That gave us hope. Now that he is Prime Minister he is prolonging our agony by turning about-face on those anti-FATCA statements. His actions have proved that he believes that “a Canadian is a Canadian is a Canadian” …. as long as they weren’t born in the United States. No, Mr. Obama, Mr. Trudeau’s leadership has not brought us hope. The only “new energy” he has brought us is the energy to fight his government tooth and nail in the courts until we are reinstated as full citizens of our own country, free to save and invest in any way we choose, just like every other Canadian.
As for your tenure in office nearing its end, our tenure in the distress which you have caused us has no foreseeable conclusion.
“…this cathedral of freedom …” (reference to the Parliament Buildings in Ottawa)
Not for us. Not anymore.
“We could not ask for a better friend or ally than Canada. We could not.”
Naturally! Canada has proven to be your most loyal lap-dog on earth. Canada comes running whenever you throw her a bone and cowers in fear at the strong arm of Uncle Sam.
“… the only forces crossing our borders are the armies of tourists and business people and families who are shopping and doing business and visiting loved ones.”
… except for the sons and daughters of your own country that can never again visit their loved ones because of your tax policy. You accuse Donald Trump of being a builder of walls yet your “longest border of peace on Earth” has become, under your watch, an impregnable fortification for people like me.
“And what makes our relationship so unique is not just proximity. It’s our enduring commitment to a set of values, a spirit alluded to by Justin that says no matter who we are, where we come from, what our last names are, … here, we can make of our lives what we will.”
For those Canadians whose origins are in your country, Mr. Obama, these words are a sick lie. We do NOT share a set of values. If we did, like every other nation (except Eritrea), you would tax only your residents and those who earn money in your country, NOT every Tom , Dick and Harry on earth who happen to have been born on your soil or who have had some relationship to you at some point in their lives. People like me canNOT “make of our lives what we will” … because of your extraterritorial tax laws and our poodle of a Canadian government that says “absolutely, three bags full, sir.”
“We’re linked by the ties of friendship and family.”
I have not visited the United States in five years because of my new awareness that in your country I am considered a tax evader. I will not put myself in harm’s way by visiting your country. I have missed two funerals and a family reunion during that time. I cannot scatter the ashes of my own parents in the place they wished to spend eternity together.
“As president, I’ve deepened the ties between our countries. And because of the progress we’ve made in recent years, I can stand before you and say that the enduring partnership between Canada and the United States is as strong as it has ever been and we are more closely aligned than ever before.”
That’s for sure! Canada has never been closer to being the 51st state than it is today!
“…we can look upon a world that has benefited enormously from the international order that we helped build together.”
I cannot agree that the world has “benefited”, but the United States, with Canada’s help, has certainly gone a long way to creating a new international order. It more resembles something from the mind of George Orwell than policies devised and agreed to by the leaders of two of the world’s great democracies.
“The world is by almost every measure less violent than ever before, but it remains riven by old divisions and fresh hatreds.”
One of these “fresh hatreds”, very sadly, is the new emotion against the United States felt by so many of her very recent friends and supporters who are now vilified by many in the American press, officials of the American government and their own former countrymen. You have lost the irreplaceable goodwill of your own diaspora.
“The world is more connected than ever before, …”
…but my community cannot play a full part in this new connectedness.
“The world is more prosperous than ever before. But along-side globalization and technological wonders, we also see a rise in inequality and wage stagnation across the advanced economies, leaving too many workers and communities fearful of diminishing prospects not just for themselves, but more importantly, for their children.”
Like so many people in my position, I am a retired person. I have what I have and I will earn no more. I must live on the income from my savings and investments but I am now “fearful of diminishing prospects” for myself. I am in danger of having much of my nest-egg stolen by a government of a country I haven’t lived in for nearly 60 years!
“And in the face of such rising uncertainty, it is not enough to look at aggregate growth rates or stock prices or the pace of digital innovation. … if our democracies seem incapable of assuring … opportunity for everyone, then people will push back out of anger or out of fear.”
I have never been a politically active person, but you, and the governments of both Canada and the United States have proven incapable of assuring opportunity for me. On the contrary, your actions have thrust me and my compatriots together to form a group of angry and fearful citizens that are, indeed, pushing back. We will not stop until we have achieved our goal of the right to be taxed ONLY by the governments that serve us. We are not served by the United States. We don’t live there!
“And politicians, some sincere and some entirely cynical, will tap that anger and fear, hearkening back to bygone days of order and predictability and national glory, arguing that we must rebuild walls and disengage from a chaotic world…”
Your not-so-veiled words accuse Donald Trump of building walls when you, yourself, have erected the world’s newest Berlin Wall. Not only do your “citizens” not feel free to visit their native land; they can no longer survive outside the US. Your laws have both locked them in and locked them out.
“… the long-term trends of inequality, dislocation, and the resulting social division, those can’t be ignored.”
So why do you? You and the American government are deaf, dumb and blind to our pleas for reasonable treatment under the laws of morality and human rights. Our letters to the House Ways and Means Committee and the Senate Finance Committee have gone unheeded for three years. The corporate taxation problems are being considered but there is no thought for individual citizens who cannot afford the high-powered lawyers and accountants that are needed currently to get themselves out of this mess.
“And fortunately, the partnership between the United States and Canada shows the path we need to travel. For our history and our work together speak to a common set of values to build on, proven values, values that your prime minister spoke of in his introduction, values of pluralism and tolerance, rule of law, openness, global engagement, and commerce, and co-operation, coupled with equal opportunity and an investment in our people at home.”
This “partnership” is the path the world MUST NOT travel if freedom is to be accessible for ALL peoples, not just Americans living in America. If one country on earth is able to wield power enough to convince all the world’s financial institutions to bend to its will, and to force all the world’s governments to pass laws contravening their own constitutional statements against discrimination, how can anyone be free?
“Now, let me start with our shared economic vision. In all we do, our commitment to opportunity for all of our people has to be at the centrepiece of our work. We are so fortunate because both of our countries are so well-positioned to succeed in the 21st Century.”
Anyone who leaves the United States to settle in another country has his economic future automatically compromised by the necessity to pay huge sums of money to expensive accountants annually just to file forms that tell the US government they owe no tax. And, it’s possible they WILL owe tax … to a government that no longer serves them …. just because they are considered citizens of the United States. What has tax become, a membership fee?
“But if the financial crisis and recent recession taught us anything, it’s that economies do better when everyone has a chance to succeed.”
CBT gives an American living outside the United States LESS chance of succeeding than anybody else on Earth. They increasingly cannot bank nor invest. The USA even taxes and depletes the tax-deferred accounts of disabled children!
“So we need growth that is broad and that lifts everybody up, including tax policies that do right by working families, and robust safety nets for those who fall on hard times.: As John Kenneth Galbraith once said: The common denominator of progress is our people. It’s not numbers. It’s not abstractions. It’s how are people doing?”
Listen to your own words, Mr. Obama, and those of Mr. Galbraith.
“And so for those of us who truly believe that our economies have to work for everybody, the answer is not to try and pull back from our interconnected world. It is, rather, to engage with the rest of the world, to shape the rules so they’re good for our workers and good for our businesses.”
And this “shaping of the rules” MUST include the abandoning of CBT.
And the experience between our two nations points the way. The United States and Canada have the largest bilateral trade and investment relationship in the world and we are stronger for it. It means a company in Quebec can create jobs in North Carolina and the start-up in Toronto can attract investment from Texas.”
But God help the American worker who goes to live in Canada.
“Now, the problem is that some economies in many of the fastest- growing regions of the world, particularly the Asian-Pacific region, don’t always abide by the same rules.”
Don’t blame the “fastest-growing regions of the world”. The United States is the country that doesn’t abide by the same rules. You and your strange bed-fellow, the dictatorship of Eritrea are the only two nations on Earth that practice CBT! You hypocritically disparage and sanction nations you call tax havens when FATCA, and your government’s refusal to approve its promised reciprocity, have vaulted the US into the position of the world’s #1 tax haven under your governance. The new US motto: Do as I say, not as I do.
“… it also affords us the opportunity to increase protections for workers and the environment and promote human rights, …”
Your country’s own concept of human rights needs to include the right of your own people to leave your country and take up residence elsewhere without having to pay a preposterous fee for doing so or be shackled by the chains of taxation to the country of their former residence for the rest of their lives.
“And that way, our workers are competing on a level playing field and our businesses are less prone to pursue a race to the bottom.”
Americans who live outside the US have already won the race to the bottom. Thanks to CBT and FATCA (its new enforcement tool) expat Americans are having trouble opening bank accounts, holding investments and getting mortgages. They are being passed over for promotions to positions of signing authority because of the Foreign Bank Account Report (FBAR) requirement. Sometimes they can’t even get a job at all. The well-wishing for “All of us” does not seem to include “Americans” who left the “Homeland”.
“… more trade and more people-to-people ties can also help break down old divides.”
I (and my community) am experiencing the effects of LESS people-to-people ties because of your country’s tax policies.
“In fact, both the United States and Canada believe our own security, and not just prosperity, is enhanced when we stand up for the rights of all nations and peoples to live in security and peace.”
While you are busy ensuring that the rest of world shares the freedoms and benefits we have enjoyed in our countries for so long, you have been busy tearing down those same freedoms and benefits that WE have been used to.
“Just as we’re joined in our commitment to protecting the planet, we are also joined in our commitment to the dignity of every human being. We believe in the right of all people to participate in society. We believe in the right of all people to be treated equally, to have an equal shot at success.”
CBT and FATCA have destroyed my ability to participate fully in my chosen society of Canada. I am no longer treated equally by my bank or by my government. I am no longer able to reap the fruits of my own labours without fear.
“…to right past wrongs.”
I have so far devoted my “golden years” to the effort to right this present wrong that you have brought to my life.
” … there are those who offer a politics of us versus them, a politics that scapegoats others — the immigrant, the refugee, someone who seems different than us.”
… or an emigrant who has chosen to live elsewhere than where he was born, or who was taken to another country at a young age and knows no other home. “Expats” may seem “different” to people who have always stayed at home. But we are human beings, too, and ask only to be left to live our lives in peace, paying taxes in the country where we live like everybody else on Earth. Stop calling us “tax cheats”. We pay dearly and gladly for what we enjoy in the nations of our residence.
“It’s because we respect all people …”
You don’t respect ME or my community. You call me a “tax cheat”.
“Being Canadian, being American is not about what we look like or where our families came from.”
Apparently, it IS about where I came from; at least that’s what the FATCA IGA says.
“And we must continue to welcome people from around the world.”
Nobody will welcome Americans when the world’s nations finally figure out that their economies are being pilfered by the US government through taxation of their expat citizens.
“The vibrancy of our economies are enhanced by the addition of new striving immigrants.”
…unless they’re Americans. American immigrants will COST their new societies because of CBT.
“We can insist that the process is orderly. We can insist that our security is preserved, borders mean something. But in moments like this, we are called upon to see ourselves in others, because we were all once strangers. If you weren’t a stranger, your grandparents were strangers, your great-grandparents were strangers. They didn’t all have their papers ready. They fumbled with language, faced discrimination, had cultural norms that didn’t fit.”
And none of them were being asked to keep paying taxes to the countries they came from.
“The girl who fled Afghanistan by donkey and camel and jet plane and who remembers being greeted in this country by helping hands and the sound of robins singing, and today, she serves in this chamber and in the cabinet because Canada is her home.”
But Afghanistan doesn’t insist that she continue paying taxes to Afghanistan just because she was born there. Canada is my home, too, but I am expected to keep paying the United States, a country in which I have not lived since Eisenhower was in the White House!
Mr. Obama, if you do only one thing in your last six months in office, start paving the way for the adoption of the worldwide norm of Residence-Based Taxation in the United States so that people like me are included in your message of goodwill.
Here is a link to the entire text of President Obama’s speech:
“Under Obama’s administration we have gone from free people to 2nd-class citizens in our own country, and criminals without due process in the other.”
No, it’s under the Fiberal-Conartist coalition that you went from free to 2nd-class citizen in your own country.
The Bush-Obama coalition made you a criminal without due process in the other.
Meanwhile Bloomberg brings us up to date:
“America’s Offshore Tax Cheats Are Feeling the Heat Once Again”
‘Since 2012, 30,000 Americans avoided stiff tax penalties by declaring they had innocent reasons for failing to disclose offshore holdings. But under the program they received no guarantees that they wouldn’t be prosecuted in the future.’
‘The risk of being scrutinized falls on those taxpayers who came forward under the government’s so-called streamlined program. Those living in the U.S. paid penalties of 5 percent of their undisclosed offshore assets, while overseas residents paid none.’
Did Brockers who entered Streamlined pay none? Did the US guarantee[*] that diaspora who enter Streamlined wouldn’t be penalized?
[* Not that a guarantee would have any validity of course. Cf Fifth Amendment. Cf settlements written by the IRS.]
I thought the IRS was urged by TIGTA to renew its interest in those who were rejected from or dropped out of OVDP, not Streamlined. The IRS’s renewed interest does not include those who opted into Streamlined from OVDI, at least according to this report:
Oops, admin please remove double posting of link.
OK, Bloomberg and a compliance condor disagree. But that doesn’t matter. Governments will continue cooperating to ensure that the US’s diaspora get worse than the worst of both worlds.
Ok, so you’re my best friend, right??? Please forgive me if I wasn’t buying your speech Mr. President. I think I need to remind you of how you have treated your very, very good friend. 1# Fatca – drains monies from other nations to stimulate the US economy. 2# Softwood lumber dispute (by the way the WTO ruled against the US, not that that the US cared.) 3# US judge rules against BC Hydro and the state of California refuses to pay (still trying to figure out how a US judge had the right to judge this case). 4# Dispute over labeling of our meat (also ruled against by the WTO). 5# The Great Tomato War. #6 A looming milk trade dispute. Your speech really was very lovely. Kudos to who ever wrote it, BUT we all know it’s empty words and the smile is only polite when the US is winning. You have talked a lot about globalization, trading partners and trade agreements. We all know from experience that protectionism is alive and well in the US and if the WTO finds against the US, they choose to ignore the finding. Sorry, I don’t think we need friends like you.