Our lawsuit claims that the legislation that enables the FATCA IGA “agreement” between Canada and United States violates Canada’s Charter of Rights and Constitution.
In this phase of the litigation, which little advances the lawsuit, the Canadian Government has asked, in a Motion, the Federal Court to compel the Plaintiffs to provide much additional private financial information. Our Vancouver litigators have had to spend time responding in a very lengthy document that such a request is unreasonable.
Personally, I am disappointed that our litigators have had to spend any time responding to the Government Motion.
Here is the “Overview” to the March 9, 2017 reply to the Government from Plaintiffs Ginny, Gwen, and Kazia:
“OVERVIEW [from pages 28 and 29 of Plaintiffs’ reply to Government Motion]:
1. More than two years after this constitutional and Charter challenge was initiated and its basis made clear to the defendant federal government ministries, the government is now asserting that it requires vast and invasive disclosure of private financial information concerning the Canadian citizen plaintiffs who have taken on the task and public responsibility of challenging highly problematic legislation on constitutional grounds.
2. The government’s motion is more than a mere fishing expedition. The effect of its application for such vast disclosure, if successful, could be to discourage Canadians from advancing precisely the sort of constitutional challenge being advanced in this proceeding.
The plaintiffs respectfully submit that the Court should not permit the government to require private citizens to comprehensively disclose years of private financial information as a precondition to challenging legislation on constitutional and Charter grounds.
This is especially so in the circumstances of the government’s present motion which, as set out below, completely fails to advance any reasonable theory as to how the documents it seeks are relevant to the plaintiffs’ challenge.
3. The government misleadingly glosses over the extremely remote nature of its theory as to the relevance of the disclosure it seeks. Put simply, the defendants [Mr. Justin Trudeau’s Attorney General and Minister of National Revenue] assert that, since Canadian financial institutions could be subjected to a 30% withholding tax on their operations in the United States if the impugned legislation is struck down as a result of the plaintiffs’ challenge, the plaintiffs must comprehensively disclose several years of their financial history on the tenuous and highly speculative theory that those financial institutions could pass on the costs of such a withholding tax to the plaintiffs in some unspecified and unquantified manner.
Among other things, this theory ignores the obvious fact that financial institutions – even when they face a new cost such as a foreign withholding tax – are obviously not automatically permitted to directly deduct amounts from their clients’ accounts in order to cover such costs.
4. As the government openly admits in, among other places, paragraph 16 of its Written Representations, its theory rests on the notion that debits in the plaintiffs’ bank accounts “may be increased” if the aforementioned withholding tax were imposed; while the plaintiffs’ financial holdings “could be devalued”. The who, what, where, and how of such speculative “increases” and “devaluations” are not explained. Suffice to say, these ideas require highly speculative and remote assumptions about how Canadian financial institutions and the U.S. government would react if the impugned legislation were struck down.
5. As for the government’s demand for particulars, the plaintiffs submit that this is simply a delay tactic as demonstrated by, among other things, the extreme lateness of the government’s motion. Not only is the government seeking particulars long after pleadings have closed (and indeed more than two years after receiving the plaintiffs’ original claim), but the particulars sought are, in substance and to the extent that have not already been provided by the plaintiffs, requests for evidence which the government will have the opportunity to request through discoveries.
It is trite that requests for particulars are an inappropriate means of seeking to obtain evidence from an opposing party. The pleadings are intended to illustrate the case to be met; not how it will be proven. In any event, it is extremely rare for particulars to be sought, let alone granted, where, as here, more than two years have passed since the relevant pleading was served and discoveries are contemplated to take place soon.
There are no exceptional circumstances that could justify the government’s delay.“
[The above is part of a 216 page document containing much legalese and private financial information of the Plaintiffs.]
I am disappointed in that if that if the tax justice folks came after those of “us” in the court of public opinion whether it be yourself, the other plantiffs, the legal team, just people like myself who comment at Brock I believe the net effect would be to make you look good and them look bad. I believe in a true and open debate “our” side easily wins. My frustration is that the “other” side whether it be government lawyers hiding behind endless delays and bogus depositions or tax “justice” advocates who refuse to engage any public debate seem to want avoid any type of confrontation between our side and them.
I brought the Ms Henein example up as I think those people who went after her for basically doing her job have basically discredited themselves completely. I kind of wish our opponents would discredit themselves in such an obvious way instead of hiding behind mindless delays and obfuscation. Having said that I personally am not as directly affected as yourself, the other plantiffs and even most other posters here. So a “direct” confrontation perhaps doesn’t seem so frightening and intimidating to me.
I have been involved in this issue since 2010 I guess I am really this is the year it is finally resolved.
I guess for me personally this is an issue I deeply care about but due to my own circumstances I am basically left a bystander without the personal standing to really challenge the current circumstances. For example I am attending the hearing in Washington DC on April 26th but simply as an attendee. This in many ways frustrates me immensely as I know many of the witnesses from our side will be attacked as tax cheats blah blah blah and part of me wishes I was in the line of fire instead of an passive observer.
One reason I am going in particular is I want to make sure short of giving thrown out of the hearing that everyone knows in the room that people in Canada such as yourself are fighting FATCA no matter what the US or Canadian governments want people to think something I am little nervous that even people sympathetic to our cause in DC might be loathed to bring up.
Thirdly one thing I can’t quite understand if the Canadian and US government were so confident the law was on their side they would quit the delay tactics and quickly move to summary trial. Instead by using delay tactics both governments look like they are afraid of losing.
So great you can attend the hearing on our behalf, Tim. Can’t wait for your report. Yes to all you said about the delays. Have a great weekend and thanks for all the support.
I actually spent this evening installing a new garbage disposal myself instead of calling a plumber for 200 dollars. This is basically the money I am going to spend to go DC and the hearing. I am not the most mechanical person and it was quite the ordeal. Luckily crossing my fingers it seems to be connected securely and is not leaking.
Thank you Tim. Hopefully you will lend support to disposing of some garbage legislation seeping from the US to Canada. Best wishes!
@ Dash Result: This Court Orders that the first six digits of the Plaintiffs’ Canadian social insurance numbers and American social security numbers shall be redacted in materials filed or to be filed with the Court,
I agree this order was an over-reach. We don’t have SSNs. I am not worried about it, but thanks for your keen observation.
“I agree this order was an over-reach. We don’t have SSNs.”
It might be boilerplate.
In US Tax Court, SSNs and ITINs are supposed to be redacted entirely, financial account numbers are supposed to be redacted except for their last 4 digits, and I don’t have other redactions memorized. Fortunately I no longer have chequing account number 74; redaction would have worked wonders to prevent identity theft on that account. The IRS interprets that rule to require redaction of SSNs (with varying degrees of compliance) but only redact some ITINs and not redact other ITINs (i.e. not even trying, but alleging that some ITINs shouldn’t be redacted).
In other US courts, SSNs are supposed to be redacted except for their last 4 digits, I don’t have memorized what they say about ITINs, financial account numbers are supposed to be redacted except for their last 4 digits, birth month and date are supposed to be redacted but birth year shown, and home addresses are supposed to be redacted. The US Department of Justice doesn’t even pretend to try — they just file tax returns as exhibits without redaction at all. But even when other parties redact the first 5 digits of an SSN, the other 4 digits combined with name are usually enough to get the full SSN from a company like Axciom or from identity thieves.
The Privacy Act of 1974 prohibits disclosing SSNs to unauthorized persons (such as everyone worldwide who wants to get a PACER account), so the US Department of Justice intentionally violates a statute in addition to violating court rules. US District Court for the Central District of California ruled that court rules are too difficult for the US Department of Justice to obey therefore the district court lacks jurisdiction, this is now under appeal in the 9th Circuit, and the Department of Justice argued that the Privacy Act of 1974 doesn’t apply.
Home addresses, oh yes. If the plaintiff is pro se such as us minnows, we have to put our home address on the title page of every court filing and in district court we have to repeat it in one of the first few paragraphs, so are we supposed to write it and then immediately redact it, oh that’s so sensible. But I don’t think a statute addresses that question, so I didn’t redact my home address and I didn’t complain when opponents didn’t either.
US rules don’t call for redaction of Canadian SINs, or Japanese “My Numbers”, etc.
Anyway, maybe the Canadian court just issued a boilerplate order without noticing if any SSNs actually exist that need redacting.
I hadn’t seen this. Wow – a revelation about a possible abuse of the IGA, a mention of the ADCS lawsuit, Stephen, and the hearing tomorrow:
‘Some Canadian bank record information being sent directly to IRS
IRS website lists 9,654 ‘financial institutions’ based in Canada and registered with the IRS’
A breakthrough in the Canadian media.
By Elizabeth Thompson, CBC News Posted: Apr 25, 2017 5:00 AM ET Last Updated: Apr 25, 2017 5:27 AM ET
“Thousands of reports containing confidential Canadian banking information records have been sent directly to the U.S Internal Revenue Service, without the Canadian government’s knowledge.
According to information obtained by CBC News under a U.S. Freedom of Information Act request, 31,574 such reports have been sent directly to Internal Revenue Service over the past two years under the U.S. Foreign Account Tax Compliance Act (FATCA).
That is in addition to about 469,827 reports that the Canada Revenue Agency has transferred to the IRS under a Canada-U.S. agreement negotiated in the wake of the adoption of FATCA.
That means more than a half million Canadian banking information records have now been sent to the IRS.”……….
“….The revelation that information about some Canadian banking records is flowing directly to the United States is the latest twist in a controversial system set up by Congress. While it was designed to ferret out offshore tax cheats, thousands of Canadian residents who have dual citizenship or various ties to the U.S. have also gotten swept up in the Foreign Account Tax Compliance Act, known as FATCA.
On Wednesday, the impact of the reporting regime on Americans living outside the United States will be front and centre when a House of Representatives subcommittee holds hearings on the issue in Washington…….”
…”New Democratic Party Revenue Critic Pierre-Luc Dusseault said the new numbers are “surprising” and raise questions about whether the intergovernmental agreement between Canada and the U.S. is being respected.
“At some point we need to look at the fact that the agreement maybe is not being respected. Maybe financial institutions are transferring their files directly to the IRS which would be against the intergovernmental agreement with the U.S. government.”
Stephen Kish, a member of the group fighting in Canada’s Federal Court to have the banking record sharing deal struck down, said one of the key concerns of those affected by FATCA is the confidentiality of their banking information.
“The Canadians that I talk to, they are very concerned about the security of the data that travels between the CRA and the IRS,” Kish explained. “They are very worried because they know computers can be hacked, information can be stolen.”
Our motion for Constitutional-Charter trial has been made today and shortly Government will also receive our affidavits of experts (their opinions) and lay witnesses. Once all is received I will explain in a post and publish what I can.
There will also be a teleconference on May 19 with Case Management Judge, Government attorneys, and our litigators, in which arguments will be presented re: Motion to compel additional documents from our Plaintiffs (we oppose the motion).
Thank you for your patience in this very long litigation.
Thank you for the update, Stephen. Nice to see some progress forward with the expert and lay witness affidavits being submitted to the defendants.
@ Stephen Kish
If it seems like a long litigation to us (and it does), it must feel like an eternity to you and the ADCS team. Thank you for the update. Our plaintiffs have gone above and beyond with the information they’ve given to date so I truly hope sanity and justice prevail. Motion for more — DENIED.
Embee and Bubblebustin, it has been a series of eternities of waiting for me and our Plaintiffs. I am now just waiting for a link to the Motion to be made so I can post.
The Motion for Summary Trial is a very short rather technical document (the long form with the arguments fleshed out comes later), but it moves us forward and does contain these good words in which I hope Justice and Reason will prevail:
Thanks for the update, Stephen. Glad to hear things are moving forward, even if it is slower than everyone would like.