THE INTENDED FOCUS OF THIS POST IS THE ALLIANCE FOR THE DEFENCE OF CANADIAN SOVEREIGNTY (ADCS) FATCA IGA LEGISLATION TRIAL IN CANADA HELD ON JANUARY 28, 2019.
The Government of Canada (who we are suing), together with some commenters on this site, strongly emphasize that Canadians should thank their lucky stars because they can easily get out of any FATCA-related “problems” (e.g., Canada won’t collect on behalf of the IRS at the present time, IRS at present time is not prosecuting all those turned over by FATCA, American interference is only hypothetical, “US citizens in Canada don’t seem to have much to fear from America or Canada, apart from the pointless automatic reporting. Canada may in fact be the last remaining country in the world where dual citizen status isn’t risky.” etc.). Why then did our Plaintiffs put themselves personally at financial risk with this lawsuit?
One reason for this trial is that Plaintiffs Gwen and Kazia want Canada’s FATCA IGA legislation, infringing on their privacy (Charter section 8) and equality (section 15) rights, declared unconstitutional by Canada’s Federal Court — and that a lawsuit is the way to achieve this specific objective.
Do privacy and equality rights matter? Should we care?
Plaintiffs also say in their court submission: “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.”
Is it important that Canada be a sovereign nation and not bargain away Charter rights because of a threat from a foreign bully? Does standing up to a foreign bully matter?
The CBC tells us that information on 600,000 accounts/year has been turned over to the US IRS during the past years. Even those who do not support Plaintiffs’ lawsuit would likely admit that at least “some” of the accountholders did not give consent for the turnover — meaning that the loss of Charter rights is not hypothetical.
Gwen and Kazia believe, and shouldn’t this really be obvious to all Canadians?, that the loss of our Charter rights, the loss of Canada’s sovereignty, and the loss of dignity of a subgroup of Canadian citizens, are more than, as some commenters argue, just “a relatively abstract sort of harm”.
Canada argues no harm caused by the FATCA IGA, but does acknowledge that if Charter rights are infringed, it had plenty of justification to do so — Canada had no choice but to comply with United States FATCA demands and could not have said “no”.
The lawsuit began during the time of the Harper Conservative government. We had hoped that when the Liberals came to power, there would be no need to continue the lawsuit, because of statements made on June 25, 2015 by Justin Trudeau to ADCS (“The Government of Canada has a responsibility to stand up for its citizens when foreign governments are encroaching on their rights. We believe that the [FATCA] deal reached between Canada and the U.S. is insufficient to protect Canadians.”) — but this was not to be, and the lawsuit continues even with the change in government.
When reading the diverse comments below on a variety of topics please try to consider what Plaintiffs’ Gwen and Kazia want to achieve, on behalf of all Canadians, with their lawsuit.
More discussion of the lawsuit below:
THANKS TO our brave Plaintiffs Gwen, Kazia, and Ginny, witnesses, supporters who never stopped giving, and lawyers Joe Arvay and Arden Beddoes— and thanks to the Federal Court for selecting this trial for the very first live webcast
Our Alliance for the Defence of Canadian Sovereignty’s FATCA IGA legislation lawsuit finally (almost five years after ADCS incorporation as a non-profit) came to a Charter-Constitutional trial in Canadian Federal Court. It was held in Vancouver British Columbia from January 28 – February 1, 2019. We expect a decision in June or so of this year.
See our ADCS legal counsel John Richardson interviewed by CBC on the FATCA trial. In 2016 and 2017 private information on a total of 600,000 private accounts were turned over by Canada to the U.S. IRS each year. Read the Court submissions.
SOME OF THE TRIAL EVENTS:
DAY FIVE: Canada argues that our Plaintiffs have no standing. Arvay responds that the fact that Plaintiffs are designated US persons and have banking accounts at risk should be enough. Also mentions the public interest in this case and that Plaintiffs are carrying the torch for all those designated as US persons in Canada.
Discussion of remedy: (Section 24 vs. 52 vs. Declaration). Arvay asks that primary remedy sought be section 52. Canadian Charter section 52 says: “The Constitution of Canada is the supreme law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect“.
If Plaintiffs Gwen and Kazia win, Arvay wants the remedy applied in six months, argues that Canada never keeps to one year remedy. Canada wants one year.
A lot of discussion on CRS (which came after the IGA) vs. the IGA. Arvay says that we are not in court to defend or challenge the CRS.
Canada says that banks put data into a T5 for millions of Canadians, so what’s the big deal with the IGA? Arvay responds by saying that if Canada tried to impose a requirement for IGA data in, for example, the massive cash-independent contractor economy, would that not require a warrant? Absolutely he says. Where is the warrant for the IGA?
Arvay: The IGA is a HUGE fishing expedition just because of a hunch. WE WOULD NOT ALLOW THIS FISHING EXPEDITION IN CANADA. IGA allows IRS to pursue those people under the rubric of the tax system.
Canada justifies the legality of the IGA on the basis that our Tax Treaty with US says each will assist the other in tax compliance. But Arvay responds that just because we have a treaty with a country — that does not make it charter-proof: A TREATY DOES NOT MAKE A CHARTER-FREE ZONE as Canada appears to suggest.
There was a discussion on whether the merits of US tax law impact on this case.
Arvay pointed out that the only reason the IGA is relevant to the US tax scheme is because the US has citizenship-based taxation (CBT). But it has also been argued that the Court cannot rule on the merits of a foreign tax. Yet Arvay says that isn’t Canada obliged to explain why it is important for CANADA to give effect to the US CBT law? No evidence, he says, that this purpose is important to Canada.
He gives an example: So what if the US amended its tax law so that there would be a special tax on all US persons whose parents were born in China (because the US is angry at China).
Would we then uphold a Canadian IGA law that helped in this human rights-violating US tax compliance? Canada would say Yes? Because we are not allowed to consider the merits of any sacrosanct US tax law — and we said in the treaty that we would help in US tax compliance? Canada can’t be asked to do this just because it is in the treaty, Canada has to justify that the law has a valid purpose says Arvay.Canada asserts that the IGA is better for Canadians than FATCA. Arvay counters in part by saying that with FATCA you get a choice to disclose or not disclose — puts the choice in the hands of the citizens, not the banks.
Canada asserts that it provides oversight when providing our banking info to the IRS. Arvay responds that CRA placing a stamp on the documents could not be oversight that provides any protection.
Arvay disagrees with Canada’s assertion that a section 1 onus to justify for Canada only applies to criminal case. Disagrees also with Canada’s narrow view on a section 15 criterion that the category of persons affected (US citizens plus others) is too broad.
Canada says that Parliament already provides protection to Canadians because Canada cannot collect on behalf of the US per the Tax treaty. Arvay responds that the IGA exposes a group of Canadians to enforcement and has denied this group the protection of Canadian sovereignty.
Arvay points out that Canada did not respond to his assertion on whether the IGA is arbitrary re: “accidental” “Americans”.
Canada argues that there is no problem using IGA obtained data for domestic purposes. Arvay argues that that is not a purpose of the IGA and that the type of data collected could not be used in Canada without a warrant.
Arvay mentions that yes it is true that Canada will not help collect FBAR penalties, but Canada has provided no evidence that IRS will not use IGA data for FBAR purposes.
Trial ends. Justice says that this is a complicated case.
DAY FOUR: Just so no one has any doubt whatsoever as to Canada’s number one reason for the IGA, Canada confirmed that, yes, as we all had expected, the primary objective of the IGA was to avoid those nasty complications of non-compliance. [If a really powerful country points a gun to your head, just comply.] Canada says that this primary important objective weighed against the low privacy concerns of the data seizure and the minimally intrusive way the info is collected make the IGA provisions reasonable.
Canada points out that some of our witnesses received a Chapter 3 and not a FATCA letter, but the point is that Canada does admit that accountholder information has in fact been turned over to IRS and that is not in dispute. [600,000 in 2016 and in 2017 per CBC]
Canada feels that IGA is not overly broad because you can’t check what you don’t know. The IGA is ok because everybody does it (e.g., CRS).
Regarding privacy Canada says that once account info has been turned over to CRA an expectation of privacy is lost and it’s ok for Canada to use the info for domestic purposes (not a purpose in the IGA).Even if there is an expectation of privacy that expectation is very low.
Regarding section 15 equality Canada says that the distinction between the Plaintiffs and other Canadians is not an acceptable enumerated factor — we say it is and the Justice said that she will think about it. For those who feel that we might re-negotiate a better deal with the bully, Canada helpfully told us that FATCA is what it is and that we can’t change that system.
Canada says that it does careful monitoring of the info sent to IRS because an officer puts a stamp on the document telling IRS to keep the contents secret.
The Charter should not protect those who flaunt US law says Canada. Canada ended today’s presentation with this: Plaintiffs are asking the Court to put the country at risk just so that someone can travel there — this is outrageous and NOT a privilege that the Charter can protect. In other words, we and the Plaintiffs are in it only for the travel.
DAY THREE: Canada explained in its scholarly economic assessment that there can only be MUCH DOOM AND GLOOM FOR CANADA if Plaintiffs Gwen and Kazia win the lawsuit. Canada says that if Gwen and Kazia win on behalf of all Canadians, and the Court rules that the FATCA IGA legislation violates our Charter rights, the U.S. would never re-negotiate FATCA because Canada brings NOTHING to the table.
DAY TWO: Our side explained why Canada’s FATCA IGA violates Charter sections 8 and 15 and why a section 1 override is not justified. Mr. Arvay read the powerful words of our witnesses who felt that they were abandoned by their country, treated as a second class citizen, betrayed by Canada — statements relevant to the section 15 violation.
DAY ONE: The Justice asked our lawyers generally: So what SHOULD Canada have done [instead of the IGA legislation?] Our lawyers answered in part: We expect Canada to stand up to the bully when our Constitutional rights are at stake…We don’t negotiate our Constitutional rights away for economic reasons…
[DISCLAIMER: The official record of the trial events is only the official transcript provided by the Court — and not the recollections made in the Post or in any comments below.]
@portland and others,
The problem is, when such statements that I commented on on this thread go unchallenged, then someone who has just had their OMG moment or a law maker or even a judge wanting to learn what all the hubbub is about and comes IBS for the first time, well what are they going to think? They are most likely to come away thinking something along the lines of “WTF is all the fuss over!?” and tune out all further discusion on the topic. Is that the response you want to elicit?
As so very few Brockers challenge the repeated statements that all one need do is just ignore their filing obligations to be free of the IRS, yet many complain about we few who do challenge them, it would appear that the majority here at IBS also believe that this is much ado about nothing. Is that the impression you wish to leave first time visitors to Brock?
When you read posts suggesting that all is well because the IRS (currently) lacks the ability to collect, think about what this must imply to someone visiting Brock for the first time. Is that what you want them to take away?
“Those comments are now completely buried by what has become basically, a bunch of off topic repetitive banter, that eventually takes over every Brock post. In fact since February 5 there have been few comments that are related to the trial itself. I feel bad that your efforts are being depreciated. But, what can one expect. This is the new Brock. As the saying goes: “The old gray mare, just ain’t what she used to be.””
Then why are so many content to allow such comments but then blast those who challenge them?
“The fact that some Brockers feel that individuals can avoid detection or cannot be held liable for U.S.. taxes (whether true or not) is completely and absolutely irrelevant. This attitude is reminiscent of the:
“Well, if doesn’t affect ME it’s not really an issue”.”
HALLELUJAH!
So, why is that I am called out for fighting such comments?
“The thing that amazes me is that for such an important trial there has been zero media coverage as far as I can tell. You would think that the media would at least show some minimal interest in a Charter case.”
Hench, I keep saying that nobody knows about any if this. We are in a bubble.
@USCitizenAbroad
I agree 100% with you post giving the reasons and thanks for the lawsuit and those who brought it. So why is it that it is left to myself and few others to challenge those who repeatedly state that ii is no big deal? Instead, you and others remain silent until proved, apparently by my posts, to defend those points.
In my view, any such pounts should be immediately challenged by any of of us who believe as you do, not just by a couple of us who earn the hate of all for doing so.
@Japan T: With all due respect, first time Brockers will come away with the impression that this is the Japan T Blather Society, and will likely give up in despair before they find any information relevant to any thread such as this one. Sorry, but that’s the fact. You’re not helping newcomers by burying every post with multiple, repetitive, off-topic remarks. See above five-in-a-row for evidence.
“So why is it that it is left to myself and few others to challenge those who repeatedly state that ii is no big deal?”
Nothing is “up to you”. Such arguments and counter-arguments flood every thread on this site. All you’re doing is repeating yourself for the five hundred thousandth time. You are single-handedly (with help from Plaxy) driving people like me away from Brock. Can you please just be more reserved in having to have the final word on every comma and full stop anyone else has written? There, I’ve had my say. I’m not interested in your inevitable three responses in a row to my comment.
I pity newcomers to Brock having to wade through all the blather, and to also see angry remarks like mine. I’m out of Brock for the time being. Cheers, all.
Of that I have no doubt, sadly, but I believe it is better than they leave thinking that this ia all about nothing.
But as it seems ok for others to repeat their, ‘what’s the problem’ posts unchallenged and wrong for me to call this out, fine. I’m gone.
But before I go, I decided that smaller, one point posts woukd be more digestsble than one long post.
Would we have gotten the superb restatement of purpose from USCitizenAbroad if I had not asked point blank why the lawsuit was needed?
Out.
@USC. If I remember correctly, particularly with regards to your support of Republicans TTFI, weren’t you pushing the meme in some of your past Brock articles that it is the compliant US persons who actually have a problem. Not inconsistent with nononomous at all.
@Barbara, If you get your wish such that JapanT, NormandD, Plaxy and Nononomous (have I missed anyone) stop commenting, will you start commenting more to pick up the slack? Otherwise new visitors will think no one cares about US persons. Oh right… No one does.
@plaxy and ND and to a lesser extent JT and Nononomous, yes you all monopolize the comment section. It’s a free world though and apparently there’s no word limit at Brock, so why let others shame you? You all are not stopping others from commenting. But, don’t you get bored talking bout the same thing over and over and over? Seriously. It can’t be healthy to be stuck in this rut.
This sort of issue has come up in other fora, and one solution that you might want to consider is limiting all posters to a certain number of posts–two per day, for example.
@gobsmacked
What would suggest as a subject on IBS ? The weather? This is not the weather channel. I only agree to what you stated initated to Barbara et al . Since you mentionned getting on another subject ,please do. I’d certainly would listen .
Or would you rather have total silence which you initially inferred when mentionning” picking up the slack.” It’ s a delicate balance. Unless,someone has a definite concrete plan of action, this subject should be left alone.
@Japan T
My comment was not directed specifically towards you (or anybody else for that matter). For what it’s worth, I think the you have been unfairly singled out (during the last slew of comments). The problem of threads being misappropriated is not because of any single individual. It’s a group dynamic where the whole becomes greater than the sum of the parts.
Brock has evolved into a chat room. It needs a permanent post where people can just chat. This would leave the purpose of the posts intact.
Anyway, you and I have both been at Brock for a very long time. Although I don’t know you personally, I think that you are a good man. Peace.
It seems to me that the goal should be to find a way for every to maybe just “comment a little smarter” – maybe work a bit harder on furthering the purpose of the posts.
Why not leave this thread for comments only on the trial? There will be important information forthcoming in the future that deals with that issue only – such as the decision, appeal prospects, funding and whether/when the recording of the webcast will be available. And there may be important commentary on the trial itself as people have the chance to fully digest what transpired. If the webcast recording becomes available it may and hopefully will provoke more commentary.
A separate thread could be created for those who wish to debate the pros and cons of various methods of dealing with the IRS, if at all. But it seems to me absolutely counterproductive to have that overtake the very significant trial issues.
Thank you Stephen, Gwen, Kazia, Ginny, John R, Carol, Tricia and all supporters who helped to bring this phase of the fight to fruition.
Part of the problem is the structure of the site. There is only enough space in the Recent Comments column for 20 or so comments. When JapanT, ND and a few others get going, no one else can leave a comment that can get noticed. Much of the balance of the splash page is obsolete or irrelevant.
My goal has been to share my experiences and try to help newcomers understand that they have real options.
No idea how to fix without a major overhaul.
maz57:
“The thing that amazes me is that for such an important trial there has been zero media coverage as far as I can tell. You would think that the media would at least show some minimal interest in a Charter case.”
I agree. It does seem a little odd that a trial should on the one hand attract almost no press comment yet on the other hand be selected as the first to be streamed live, and should also be selected for archiving because of public interest in the subject.
Indeed. And it would be logical to extend that protection to cover reporting also.
Canada says that because of the Treaty it “cannot” assist the US in collecting US tax debts from Canadian citizens who were Canadian citizens at the time the debt was incurred. Yet Canada persists in reporting the Canadian accounts of Canadian citizens even including those who don’t owe US taxes, claiming that the aim is to prevent the evasion of US taxes? It doesn’t hold water.
If Canada could be persuaded to seek a renegotiation of the IGA to exclude reporting on their resident citizens, that could allow the exclusion to be adopted in other IGA1 countries, including those who don’t have a mutual collection agreement. Turn this tractor round in the other direction, towards reducing US extraterritorial invasion.
The fact that renegotiation of the deal was actually discussed in court as a real possible outcome of the trial (http://isaacbrocksociety.ca/2019/01/23/live-feed-anticipated-for-january-28-2019-canadian-fatca-iga-trial/comment-page-21/#comment-8591726), seems to me a very positive sign.
Renegotiation could potentially solve the problems, it appears to me.
The category of persons affected is not “US citizens plus others.” The category of persons affected is “persons born in the US plus others.”
A Canadian with a Canadian birthplace (and no American “indicia” — hateful Mccarthyite word) is not affected; a Canadian with a US birthplace is.
And this why it’s important to make the point that compliance is unnecessary: because if a US-born Canadian thinks they can’t renounce because it would cost them thousands in compliance costs in addition to the thousands for the CLN, they’re trapped in US citizenship.
The question of whether US tax return filing is optional or is legally compulsory and enforceable by Canada against Canadian citizens, is far from irrelevant to the FATCA issue.
Zla’od’s idea to limit the number of comments per person per day might be a good one. If you create a separate post just for people to chat then you will still have the newest comments section overrun by a few, though it should keep the individual posts more on track. It would probably need to be a mostly self enforced rule of Brock though as I doubt WordPress supports this. If people go over the 4 or whatever comment per day limit, warnings could be given before actually banning them.
Another idea might be to create a ‘chat post’ but don’t allow comments to that post to show up on the ‘newest comments’ . Not sure if WordPress allows this but if possible that could be a way to allow the more prolific commenters to do their thing without distracting from the individual posts and without clogging up the’ newer comments’ section.
I would be very happy if the outcome of the trial (or subsequent appeals) were to extend the same protections to reporting that already exist for collection. More clearly worded: exclude from reporting anyone who is protected from collection. There’s a certain logic to having those aligned. How it might work is a bit of a mystery, but if they’re already comfortable with unverified self-certification, no reason why they can’t simply adjust the questions.
I don’t know what sort of Charter rights apply to permanent residents versus citizens, so I can’t say whether that would pass muster, but it would be the job of US-only citizens to mount that challenge. (And given how easy it is to obtain Canadian citizenship, I’d recommend they do that instead.)
Using up two of my allotted four daily posts this morning (I’m self-certifying):
Unless there is serious moderation and/or site restructuring, the comments are always going to be a shit-show. When there isn’t actually anything new to talk about – what has happened since the trial concluded? – pointless chatter and endless contradiction inevitably fill the void.
The priority should be sane commentary on any developments, and helping newcomers with their OMG moments, problems and questions. (Unfortunately many of the arguments originate when people disagree with the advice given by others.)
Purely with regard to the situation in Canada, I feel it’s important to educate Canadian citizens about the realities of US tax compliance – it’s optional – and counter the propaganda issued by the likes of Moodys. I don’t see how this goal undermines the legal action, or renders it unnecessary.
@Nononymous:
“I would be very happy if the outcome of the trial (or subsequent appeals) were to extend the same protections to reporting that already exist for collection. More clearly worded: exclude from reporting anyone who is protected from collection. There’s a certain logic to having those aligned.”
I’ve been thinking the same and here’s how they could do it. The CRA already knows if an individual is a Canadian citizen because the question is asked on page 1 of a Canadian tax return. So the bank reports to the CRA, the CRA checks the tax return, then deletes the FATCA data if the person turns out to be a Canadian citizen. Seems fairly straightforward to me.
The other thing our government needs to do is to tell the US to back off on this transition tax business. Canada has primary taxing rights on those retained earnings and the US has no right to do an end run around the treaty by creating an imaginary distribution with the stroke of a pen. This is true whether or not the person is a Canadian citizen.
@nononymous, although many may be following your often mentioned advice to ignore the whole US tax compliance issue, there is a risk that if people deem it a nonissue then it will be challenging to raise funds for further lawsuits. So yeah, your advice is well meaning and helpful on one hand, but from a fundraising perspective, not so much. I don’t think you are being selfish or not getting the bigger Charter issues. Many agree with your approach to not let banks know you are US owned according to the US and Canada. However, there is a danger in us making it seem like Canadians really don’t have much of a problem under the IGA. Damned if we do. Damned if we don’t.
No doubt that’s exactly why the regime in Canada is so lenient.