UPDATE: FATCA IGA litigation in Canada Federal Court: The guts of our Plaintiffs’ (Gwen and Kazia) arguments and those of the Government we oppose (for simplicity, “Canada”) can now be found in four court documents (that our supporters paid for) submitted between October 3 and December 13, 2018 (see below for some excerpts). The Court submissions can be found on our ADCS website.
The trial, which fleshes out the written arguments in orals in Federal Court, has been held the week of January 28, 2019 in Vancouver.
OUR TRIAL WOULD NOT HAVE HAPPENED WITHOUT THE GENEROUS SUPPORT OF BROCKERS. Somehow you found the monies to pay for this trial.
THE FEDERAL COURT DOCUMENTS THAT OUR SUPPORTERS PAID FOR:
1. October 3, 2018 Plaintiffs’ Complaint. We argue in part that Canada’s FATCA IGA legislation violates Sections 7, 8, and 15, of our Charter of Rights and Freedoms and the sovereignty of our country. Includes: ” …the principle of nonintervention between states is a cornerstone of the international order and intrinsically connected to state sovereignty; it is undoubtedly considered by all Canadians to be fundamental to their notion of justice that Canada will not expose them to enforcement of another state’s laws; and it is predictable and easily applied – simply, Canada may not allow other state to enforce their laws on individuals residing in Canada.”
2. November 21, 2018 Canada’s response to Plaintiffs’ Complaint. Many arguments including: Canada argues that it responded wisely to a threat from a bully:“…severe consequences to the Canadian financial sector, its customers and investors, and to the Canadian economy as a whole if Canadian financial institutions were unable or unwilling to comply with FATCA.” “…the plaintiffs have no standing..” because their accounts were not turned over, etc. “The CRS has been adopted by over 100 countries, including Canada…” “While it is acknowledged that the Impugned Provisions cause the seizure of information for the purposes of s.8, the plaintiffs do not have an objectively reasonable expectation of privacy in that information.” “The plaintiffs argue for the recognition of a novel principle of fundamental justice “that Canada will not deny its citizens the protection of Canadian sovereignty”. This proposed principle does not meet the requirements of a principle of fundamental justice as outlined by the Supreme Court of Canada.” “Avoiding the possibility of such catastrophic effects as a decline in GDP, labour income, employment, a depreciation of the Canadian dollar and a lowering of the standard of living of Canadians, are certainly sufficiently pressing and substantial to justify any minimal limitation on rights which may be found to a be result of the Impugned Provisions.”
3. December 7, 2018 Plaintiff’s response to Canada’s motion to strike out some testimony of our witnesses. Includes: “Canada seeks to strike the entirety of the Second Nightingale Affidavit based on a lack of relevance. The Second Nightingale Affidavit concerns the Exit Tax. As explained in the plaintiffs’ Memorandum of Fact and Law, the Exit Tax is relevant context in this constitutional case because it constitutes part of the burden faced by some individuals of avoiding exposure to the Impugned Provisions.” “The out of court statements referred to by Ms. Tapanila to which Canada objects are not adduced for the truth of their contents, but rather for the fact that they were made. The plaintiffs do not rely on the legal advice lay witnesses were given for the truth of its contents. Rather, the plaintiffs rely on the fact that these witnesses sought and paid for legal advice, in many cases from multiple lawyers and at significant expense. This evidence establishes that it can be onerous and costly for an individual to determine whether and how they may be affected by the Impugned Provisions – and if they are affected, whether and how they may avoid this by changing their immigration status under US law – as referred to in the plaintiffs’ Memorandum of Fact and Law, at paragraph 19. The specific legal opinions lay witnesses received are not relevant to this point.” [I will not provide a link to this short submission, which includes the names of witnesses other than that of Carol Tapanila, whose name is already in the public domain.]
4. December 13, 2018 Plaintiffs’ reply record for the Summary Trial. Includes: “This is the first time Canada has raised standing as an issue. It does not plead that the plaintiffs lack standing in its Amended Statement of Defence. Canada’s assertion that the plaintiffs’ rights have not been affected by the Impugned Provisions is incorrect. It is undisputed that the plaintiffs bear US Person Indicia, since they both have an unambiguous US Place of Birth. As a result, any Low Value Accounts they own now or in the future may be reported and shared pursuant to the Impugned Provisions. For Lower Value Accounts or High Value Accounts that they own now or in the future,the relevant FIs are required pursuant to the Impugned Provisions to obtain or review the plaintiffs’ Proof of Loss of US Citizenship.” “Further, or in the alternative, the plaintiffs have public interest standing to challenge the Impugned Provisions…Relatedly, in an earlier summary trial in this proceeding, this Court declined to grant costs given “the public interest involved in clarifying the scope of novel provisions affecting hundreds of thousands of Canadian citizens.” etc. “Canada relies on the expert report of Matthias Oschinski for the proposition that if all of Canada’s big banks did not comply with FATCA, and the Impugned Provisions were not implemented, Canada would face significant negative economic impacts. In fact, Mr. Oschinski agreed that the severity of those impacts was subject to a “great deal of uncertainty” More importantly…” “This Court has already observed that the Common Reporting Standard is different from FATCA in “significant ways”. Comparing the CRS and the Impugned Provisions – as Canada does in various parts of its argument – does not aid in the resolution of this case.”
“…the record before the court actually does not establish that the plaintiffs have US tax reporting obligations [!]. There is no expert evidence before the court that considers the plaintiffs’ immigration and citizenship status under US law. The plaintiffs are affected by the Impugned Provisions because they bear US Person Indicia, not because they are US citizens. This is important: it is the presence or absence of US Person Indicia – as defined in the Impugned Provisions – that determines whether an individual is affected by the Impugned Provisions, not their citizenship status under US law. As noted above, Canada’s submission unreasonably assumes that the two are perfectly correlated.” “Canada states that its primary purpose in enacting the Impugned Provisions was to “avoid the potentially catastrophic impacts of FATCA on Canadian financial institutions, their customers and the Canadian economy.” It says its secondary purposes were to (a) lessen “the burden of the direct application of FATCA on Canadian financial institutions and their customers” and (b) “obtaining additional automatic exchange of information from the US to Canada for Canadian taxation purposes.” Assuming that the first of the secondary purpose is different than the alleged primary purpose, we do not accept that lessening of an undefined “burden” would be a legitimate objective for purpose of s. 8 or s. 1. As to Canada’s secondary purpose (b), while it is supported by one paragraph of the preamble to the IGA, it is undermined by all other relevant evidence and the effect of the law…Third, and in any event, Canada’s articulation of its “primary purpose” is too general to be accepted. A purpose that is articulated in too general terms will provide no meaningful check on the means employed to achieve it. Not only is the threat of economic harm Canada refers to amorphous and highly uncertain, it is so general that it could justify any rights infringement arguably motivated by such a threat from a foreign state…Canada effectively maintains that it enacted the Impugned Provisions under duress from a foreign state. The Court should be very slow to accept this as a justification for infringements of the Charter. Canada is expected to defend the constitutional rights and freedoms of its citizens and not bargain them away or capitulate to threats from a foreign bully state. The notion that a foreign state could indirectly cause the violation of a Charter right in circumstances where Canada could not do so directly simply cannot be accepted. This is a deeply illiberal proposition and it would undermine the principle of the rule of law which explicitly animates the Charter. ”
“Further, even if a desire to avoid financial punishment by a foreign state is accepted as the actual objective underlying the Impugned Provisions, and is considered a valid basis to violate a Charter right, there is significant uncertainty surrounding (a) whether the United States actually would have inflicted that punishment if Canada did not abide, or would do so now if the Impugned Provisions were declared of no force or effect, and (b) the severity of the financial consequences if they were to materialize.” “Canada does not deny that the CRA will use Accountholder Information obtained pursuant to the Impugned Provisions for domestic tax compliance work, nor does it refute the plaintiffs’ contention that such use is unrelated to the objectives of the Impugned Provisions. However, Canada relies on Jarvis for the proposition that “once information is validly gathered by the CRA any reasonable expectation of privacy in the information is lost.” On this basis, it suggests that the CRA’s use of this information is not unreasonable. Jarvis cannot be applied to the present case in the manner suggested by Canada. First…”
“In asserting that the Impugned Provisions are minimally impairing, Canada states that it is not the court’s role to speculate about whether Canada could have achieved a better deal through negotiations with the United States. We disagree. It is Canada’s onus to prove that the Impugned Provisions are minimally impairing and if its claim is that it had no choice because of US demands then it must prove that by appropriate evidence.”
“Finally, the plaintiffs do not assert, as Canada suggests, a right “to avoid the consequences of choosing to violate US law.” The plaintiffs claim their Charter rights, and they claim that they have been breached by Canadian law for the reasons set out above.”
“Finally, the plaintiffs do not assert, as Canada suggests, a right “to avoid the consequences of choosing to violate US law.”
Canada’s assertion is as disgusting as MP Gerald Keddy saying that the FATCA IGA “doesn’t affect real Canadians”. Canada can’t bend over far enough for the US, can they.
Very interesting summary. Thanks for posting it.
Good luck to the plaintiffs, and all associated.
Congratulations and thanks to our legal team, our plaintiffs and all others who helped to put our case into such powerful language. In just six weeks we’ll finally have this before a judge. I won’t be able to be in the courtroom this time but my future is riding on the outcome, as it is for so many of you. I will be there in my heart.
This is fascinating. It seems like a rock solid case.
Canada should never give in to foreign demands to harm our rights. Imagine if China gets wind of this
Interestingly, the concept of “Impugned Provisions” would repulse American Citizens under the US Constitution, which if any foreign power attempted to violate would draw some level of resistance also, some lawsuits, demonstrations etc. Why do those in the Canadian Government believe otherwise for Canada and Canadian Citizens? In my opinion, the Canadian Government Employees that wrote and or signed the “Impugned Provisions” which violate the Canadian Charter should be charged with TREASON in CANADA!
Perhaps that would be the next step?
Stephen Kish, why are you so certain that the Gov’t would appeal should they lose this?
Because they always fight to the last nickel. They have unlimited funds
I pledge my financial support to any appeal. I hope that the good guys win (not the Canadian government) and that there is no appeal.
Me too, Barbara.
We need to get people coming back to Brock.
@BB: “We need to get people coming back to Brock.”
First step: how lovely it would be if someone actually moderated the forums and simply culled the repetitive and incessant chatter on some of the (formerly) useful threads. Many of the most essential threads have turned into a free-for-all which veer way off topic, raking over the same-old-same-old coals that have been raked over in every one of the other popular threads. It’s become so that I don’t even come to IBS much anymore. I check for new top-level posts and anything new on the “Current Media and Articles” thread and skip the rest of the bla-bla-bla because I’ve read it all so many times before.
Sorry to be so negative. When I first joined IBS a couple years ago, it was a clean, mean source of wisdom. I wonder how I’d feel if I joined now, with so much of the useful discussion buried under so much steamy hot air. I wish there were a separate thread called “The IBS Pub” where all the windy conversations can cheerfully continue, while those who simply need clarity about renunciation, etc., don’t have to comb through page after page of blather to find the few nuggets.
I still very strongly support the principles here, and the actions of the brave souls who put their time, money and lives on the line for the rest of us, and therefore I am happy to offer financial support.
I would have thought that the unequal treatment of Canadian citizens is the main reason for a Charter violation.
And it is such a shame that fighting for the Charter should be a matter of money. Does this mean that if one doesn’t have the cash, that the Charter gets violated?
I pledge to support an appeal, if necessary, also.
In the EU, as I understand it, it’s the court of final appeal that hands down a definitive ruling.
If the case doesn’t get that far, there could be further challenges, down the road.
So Member State governments do keep appealing against adverse rulings in the lower courts, unless they can reach an agreed settlement.
I don’t know if it’s the same in Canada.
Please RT/Like on Twitter:
“The notion that a foreign state
Please Retweet/Like on Twitter
“The notion that a foreign state could indirectly cause the violation of a Charter Right in circumstances where Canada could not do so directly simply cannot be accepted.”
with reference to this feature
I, too, pledge my financial support when needed for the appeal.
You say “I would have thought that the unequal treatment of Canadian citizens is the main reason for a Charter violation.”
It is one of arguments-claims (section 15 violation of the Charter) made in Plaintiffs submission the “Complaint”. The key arguments can be found in the “Complaint” document but some are also also found/fleshed out in the reply documents to Canada.
The Plaintiffs say in part:
I pledge my financial support . I also hope to attend the court case to remind the Canadian government by my presence that I am a Canadian citizen , a Canadian tax payer and a Canadian voter.
Is there by any chance a link to a document containing the Court’s observation, and any related comments or discussion?
I agree completely. In fact the time has come to reflect on the purpose of Brock and what Brock should be going forward. As a long time poster/author I am particularly disappointed that the site seems to have lost its focus. In the early years it had a research and educational purpose. It had many contributors. It was a forum for collaborative learning. That is no longer the case.
Brock has now disintegrated into a chat site where the purpose of the posts is no longer even part of the chat. The effect has been (IMHO) to drive a number of people away. These people could be making valuable contributions. The chatter is so incessant and so divorced from the purpose of the posts that new people cannot see beyond the chatter. Beneath the chatter lies, what I believe is the best source of research on the problems of Americans abroad which exists in the world. But, it is now invisible.
The use of Brock as a forum for endless chatter is actually destroying the value of Brock and all the work that was done to make it the site that it was (and if people could see beyond the chatter) what it really still is (as noted by Barbara).
I believe that Barbara’s suggestion has merit. Why not establish a group of “Chat Rooms” – where it is understood that the only purpose is to just chat. This would encourage intelligent, sustained discussion on the content of the posts. It might encourage more posts.
The “Chat Rooms” could be on the side bar”. But, even the Chat Rooms might be themed. For example:
“FBAR Penalties on Mars”
“The Once And Future Renunciation”
“To Comply or not to Comply, That Is The Question”
As goes the chat on Brock, so goes the future of Brock.
To be clear, that is not a criticism of any specific individuals (it is a general trend). But, if this does’t stop there will no longer be a Brock.
As I conclude this comment, I realize that this comment is also unrelated to the core purpose of this post. But, it is an addition to the thoughts of BB and Barbara. I thought of making this comment a separate post, but have decided not to.
I urge the administrators of Brock (who clearly care about the future of the site) to please consider this problem!
Tight moderation to winnow out sub-standard comments and block unwanted commenters would indeed seem to be the obvious solution.
Or how about turning the site into a membership society, with an application process, and perhaps a nominal fee, and allowing only members to post or comment.
Or make it a facebook page.
Perhaps a Chat Room where people can contribute other suggestions as to how to get rid of themselves?
There seem to be fewer newcomers coming here to ask questions which probably stems from more information becoming more widely available , this also leads to extended debates from our longstanding Brockers.
There are also minor points debated here that may not be relevant to the many but may be extremely important to the few.
I believe Petros principals were such that there shouldn’t be censure or moderation except in cases of of insult or abusive comments.
I do think that if there is a disagreement on point then we should seek to agree to disagree sooner rather than later in respect of others coming here to ask questions that often get lost in the mayhem.
“I believe Petros principals were such that there shouldn’t be censure or moderation ”
A degree of moderation can be very helpful in keeping discussions on track. But it may be easier to do, and less time-consuming, using forum software rather than blog software.
@BB, Barbara, USCitizenAbroad, Heidi, Plaxy
In order to keep the comments on Stephen’s post on topic, I have created a new post for any discussion of moderation. Kindly add any new comments there, rather than on this thread.
Please note, we do not have the capacity to simply move comments. All we can do is copy/paste and move them but they would show as coming from whoever moved them. Also, no one has time to engage in that. There are limits on WP.
I’ll try to help in the event of an appeal but it can only be in a small way this time. (Sort of shot my wad in the 2014 ADCS fund raiser because I couldn’t bear the thought of this lawsuit possibly not happening for lack of backing.) To me it seems that it’s actually Gwen and Kazia who are defending Canada’s Charter by asserting their rights while the Canadian Government is opposing it by denying them these rights. Anyway, I’m wishing our extraordingary plaintiffs and their legal team double-much good luck in January.