December 7, 2017 CANADIAN FATCA IGA LITIGATION UPDATE:
Our trial on Canada’s FATCA IGA legislation in Federal Court is being delayed because Government is having a difficult time providing retainer contracts to their expert witnesses (our side’s experts and Plaintiffs have already filed affidavits).
We can’t move forward until we receive Government’s evidence.
I can say now that if Canada will not agree to a date to provide its evidence early in the new year then our litigators will seek the assistance of the Case Management Judge, whose job it is to keep the litigation moving. The purpose of the Case Management Conference will be to obtain a court order to get Government to provide its evidence in a timely manner.
As to future timelines: this is my personal guess only (which depends in part on the evidence, as yet unknown, to be provided by Government), but I expect that the trial in Federal Court will take place in the last half of 2018 with a decision possibly in very late 2018/early 2019.
Maybe they cannot find expert witnesses who want to sign their name because they actually are embarrassed to try to find reasons how these actions do NOT violate Canada`s Charter of Rights?
I’ve no legal background. This is from a common sense point of view. But I think any expert witness would see that the actions violate the Canadian Charter of Rights and Freedoms. Also that the USA threatens Canada and other countries with financial sanctions should they not comply. It’s a bully scenario, plain and simple.
Good Morning Steven,
Thanks for providing an update on this. Hopefully, this is only a small delay and we will see some victory with this.
Cheers,
Rocky
Polly,
I believe (but don’t know for certain) that the Government delay is not caused by difficulty in finding expert witnesses, but in difficulty in using the slow Government Procurement process to retain these experts.
Pat Canadian,
You say that the Government experts will say: “…that the USA threatens Canada and other countries with financial sanctions should they not comply.”
I think so too.
Canada has already responded to our Claims by saying: The Impugned Provisions are reasonably necessary to achieve the dual goals of relieving Canadian financial institutions and their clients of the potential for crippling tax and commercial consequences of non-compliance with FATCA and furthering Canada’s international commitments to share information for the better administration and enforcement of taxation laws.”
Thank you for updating us, Stephen. Whatever the reasons for this government delay it is inexcusable. They’ve had plenty of time to get their act together. Bring on the court order!
I wonder if ordinary litigants are allowed such leeway. Would that the Canadian govt be condemned for foot dragging.
Can enough time go by that we can just win by default?
At a certain point the case management judge needs to step in. “Justice delayed is justice denied” or is that just an American thing? The government is dragging their heels and needs to step up and defend their position, or call it quits on Fatca.
The question seems to be whether crippling sanctions against Canadian financial institutions is enough to allow discrimination against Canadian citizens resident in Canada.
@Stephen Kish
Have the lawyers discussed whether the following scenario is possible?
What if the courts find that the IGA is indeed a violation of the Canadian Charter of Rights and Freedoms, but they allow it because of the crippling sanctions?
Marie. They are well aware of that possibility.
Not that related , but does anyone know if the US have any intention to ratify the Multilateral convention on Mutual assistance in tax matters and if it includes the non incorporated territories such as USVI and Puerto Rico?
@DoD @Marie
Do the courts have the power to do that on their own? Have they ever done such a thing?
My understanding is that this would only be possible under the invocation of the notwithstanding clause, which hasn’t happened yet–in fact the federal government has never invoked the notwithstanding clause. Moreover, even if the federal government DID invoke the notwithstanding clause for the very first time in this situation, would it apply retroactively? The notwithstanding clause, if invoked, is in effect only for a defined five year period, and no such five year period had commenced at the time the litigation was filed.
@ernest De Zoe
On a related note, can a US-Canadian dual citizen avoid the impact of CBT by establishing a tax home in VI or PR?
I think invoking the notwithstanding clause for the very first time in this case would be a politically VERY difficult decision for a Canadian government to make–and ESPECIALLY so if the two leaders in question are named Trudeau and Trump. A Trudeau and avowed feminist publicly bending over to Trump? It is difficult to see that happening.
@DoD @Marie
Actually I guess there is the limitations clause as well:
The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.
It is hard to see how accepting the dictates of a foreign power have any place in a “free and democratic society” but I guess that remains for the courts to decide, and we have a long way to go yet in this battle it seems.
Thank you for all the work you and the others do to help us.
@Dash1729
That is exactly where I was headed, the notwithstanding clause.
What is the difference between these two scenarios? Is there a difference?
1.invoking the notwithstanding clause
2. Government acknowledges that the IGA violates the charter, but is necessary because of sanctions against banks/customers, etc.
It’s right there in article 1 of the Charter. No need for notwithstanding.
1. The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.
“On a related note, can a US-Canadian dual citizen avoid the impact of CBT by establishing a tax home in VI or PR?”
If the dual lives in USVI or PR then they pay RBT in USVI or PR. If the dual lives in Canada then they pay CBT to the US.
(This includes duals who were born in USVI or PR and never entered the areas that the US designates as the US.)
(If the dual receives income from the US they have to pay something to the US.)
DoD et al.,
Government already deals with section 1 of the Charter in its response to our Claims and says (which we oppose):
“Charter, Section 1. In the alternative, if the Impugned Provisions infringe ss. 7, 8, or 15 of the Charter, which is denied, the Impugned Provisions are constitutional because any such infringement is justified in a free and democratic society… Further, these objectives are of sufficient importance to warrant limiting any right which may be infringed and any infringement is proportional to the objectives and to the benefits conferred by the impugned provisions…”
Marie,
My prediction is that the Federal Court Justice will likely rule that the rounding up and turning over a subgroup of Canadian-resident citizens to a foreign government violates one or more Charter sections.
However, will the Justice rule that the “benefits” to Canada of turning over these Canadian citizens justify the Charter violations?
Stephen, Canada will choose between its banks and the value of its citizens and residents (its sovereignty), when those banks are only vulnerable because they have chosen to invest in a foreign country, whereas those citizens have no choice but to be turned over because of characteristics not within their control.
“The test for deciding whether the violation of a Charter right is a reasonable limit on a right or freedom was created by the Supreme Court in R. v. Oakes, [1986] 1 S.C.R. 103. Known simply as the Oakes test, it asks the following questions:
Is the purpose of the legislation to limit the charter right or freedom? If so, it is not a reasonable limit.
Is the limit proportional to the objective? It is if it meets all of the three following criteria:
The limit has a “pressing and substantial objective”
The limit infringes on the Charter right as little as possible to meet its objective (aka the “minimal impairment test”)
The benefit of the limit is greater than the harm caused by limiting the right or freedom
The Oakes test is still used by the Supreme Court, although it has nuanced the second part of the proportionality test. The Supreme Court found that a limit on a right should infringe at right “as little as possible” when the objective of the law is to set relations between the government and the individual (for instance, in criminal law, where it is the government against the individual)…
Equality
According to s. 15 of the Charter, everyone is equal before and under the law and has equal protection and equal benefit of the law, without discrimination. Section 15 further lists some prohibited grounds of discrimination: race, national or ethnic origin, colour, religion, sex, age, mental ability, and physical disability.
Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143defined discrimination. Discrimination is a distinction which imposes disadvantages or withholds advantages based on the characteristics of an individual or group. A mere distinction is not enough. It must be a distinction based on characteristics that a person has because he or she belongs to a certain group.
That group must either be distinguished by one of the prohibited grounds above, or “analogous” grounds. A ground is analogous if it has some of the following similarities to the grounds listed, such as:
having that characteristic is not in the control of the individual
that characteristic cannot be altered or can only be altered at unacceptable cost
the groups defined by that characteristic have relatively little power in society
https://en.wikibooks.org/wiki/Canadian_Constitutional_Law/Charter_of_Rights_and_Freedoms
@BB
Wow. I’m beginning to think I did indeed make the right decision in leaving Canada for the USA which I did in 1987 one year interestingly after Oakes. Although in the specific case in Oakes they did uphold the Charter rights, the test that became the precedent seems so weak as to be useless. It sounds like the court basically ruled that rights can be limited if the benefits of doing so outweigh the costs. A “right” that can be taken away the moment someone else benefits a bit more than the person is hurt isn’t much of a “right” at all. By that measure I could even justify stealing money as long as I could prove I will put the money to slightly better use than the person I’m stealing from.
I can’t imagine the USA courts, at least pre 9/11, interpreting “rights” in such a limited manner.
I hope that Arvay and team have some ingenious arguments up their sleeves. Sadly Oakes doesn’t seem to give them much to work with. But I know Arvay and team are very, very committed to this effort and will do all they can to pull out a victory no matter how improbable.
Thank you Stephen.
And I had a funny sense of sovereignty ceding capitulation to the US – a kind of FATCAesque “deja vu all over again” when I read the stories and issues surrounding the current Bill C-23 https://ipolitics.ca/2017/12/06/independent-senator-decries-urban-horror-movie-bill-c-23/ , ex. “…“It’s a reduction of privacy rights, it’s a reduction of personal security and there’s no genuine remedy anywhere in the (bill) that allows us, as Canadians, to rely on the Canadian Charter of Rights and Freedoms,” said McPhedran….”
I note that yet again, vis a vis the US, the Canadian government of the day – again, it is the gLibs implementing the previous CON agenda, attempting to justify an agreement that represents craven capitulation and the ceding of Canadian sovereignty and autonomy to the US, ON CANADIAN SOIL Yet again, elevating expediency of commerce over our Charter rights, and pushing it through despite serious flaws raised by the Privacy Commissioner, civil liberties groups ex. https://www.wireservice.ca/index.php?module=News&func=display&sid=22500 , and voting down important amendments proposed by Senators Serge Joyal and Marilou McPhedran. The Glib government again pleads that they are powerless to make important changes to protect us, rationalizing their capitulation to US demands by saying that the agreement in question predated (2915) their current term in government, and so despite being elected by Canadians to change course from the injuries inflicted on us by the Harper government, they can’t change course even to uphold the Charter and civil rights of Canadians, our constitution, and our sovereignty and autonomy;
http://nationalpost.com/news/politics/ambassador-to-u-s-is-mystified-by-privacy-concerns-around-canadian-border-pre-clearance-bill
Again we also have the US Ambassador to Canada up here telling us that US interests override the rights, Charter and constitution of Canadians on Canadian sovereign autonomous soil http://nationalpost.com/news/politics/ambassador-to-u-s-is-mystified-by-privacy-concerns-around-canadian-border-pre-clearance-bill .
No doubt if we look through the records we can again find Liberal statements opposing the bill the gLibs just pushed through, just as with the FATCA IGA.
And this is in the year celebrating Canada’s 150th birthday as a nation.
When will the Stars and Stripes finally be raised over Parliament?
Sorry, typo above, date of border preclearance agreement by Cons was in 2015.
I know this is not the topic of this thread, but it is such an egregious example of the infringement of our Canadian rights on Canadian soil, like FATCA, that I just can’t help myself. The Canadian Bar Association said;
“… it is not necessary that these benefits be gained at the expense of Canadians’ rights under the
Canadian Charter of Rights and Freedoms.
2 We continue to assert that Bill C-23 unnecessarily and unjustifiably sacrifices the rights and
liberties of Canadian travellers, and urge that the Bill be amended to address these concerns …”
https://www.cba.org/CMSPages/GetFile.aspx?guid=c3b7eb96-4912-4be6-865e-6b9aeb17cecd
What will the Canadian government do next to limit the exercise of our Charter and constitutional rights on Canadian sovereign autonomous soil at the behest of the US bully? And when the inevitable legal challenge comes to this latest injury, they’ll be sucking more of our Canadian taxpayer dollars to defend the injury they’ve done us, just as they are doing with FATCA.