FATCA and Canada

208 thoughts on “FATCA and Canada”

1. The high costs of compliance with foreign extraterritorial US laws to individual Canadians and families – and Canadian society. A recent example of the fees paid to compliancers in order to complete SFOP;

   Wed Aug 17, 2016
   https://forums.serbinski.com/viewtopic.php?t=11186&highlight=streamlined
   “….I think what they did, and are doing still, is terrible, dare I say immoral. FYI, they gave me a quote to continue to do my and my two children’s returns every year. It was more than what we spend in a year for groceries.

   By the way, in case you’re wondering: the number I am claiming is only the amount for me. I am not including the amounts paid for my children’s returns.”

2. Sardonically amused at finding this exchange wherein Brian Ernewein of the Ministry of Finance who defends the imposition of FATCA on Canadian citizens and residents, teaches the assembled about residence based taxation vs. citizenship base, and pretends that Canada’s tax treaty prevents double taxation:

   http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=8676337&Language=E&Mode=1#Int-9294272
   ” In point of fact, Canada doesn’t tax on the basis of citizenship. Again, I seem to be picking on the United States, but it’s the only country that actually taxes—with a possible footnote for Eritrea—on a citizenship basis. We tax on a residence basis.

   from
   Standing Committee on Finance
   NUMBER 064
   l
   1st SESSION
   l
   42nd PARLIAMENT
   EVIDENCE
   Monday, December 5, 2016
   Department of Finance
   • Brian Ernewein, General Director, Tax Policy Branch said:
   ” It’s true that we try in our tax treaties to have a provision to make sure that in the case where two jurisdictions both claim a taxpayer as resident there are rules to resolve that, to figure out in which of the two countries or jurisdictions the person truly is resident. It’s not as though there would be tens of thousands of people in those circumstances, however, who would fall out of the tax net as a result of the treaty changes. As we said in our opening remarks and have touched on since, the tax treaty provides certainty in that respect—rules to make sure we can figure out when a person is resident and where they are resident.
   In point of fact, the essential point is that for most taxpayers that answer will be clear. What the treaty does is ensure that there are limits on each country’s right to tax and that there’s an ability to get a credit, or an exemption, but in the case of shared taxation to get a credit for the tax that’s paid in the other country to eliminate double taxation. ”

   from;
   Minutes of Proceedings
   Standing Committee on Finance (FINA)
   42nd Parliament, 1st Session
   Meeting No. 64
   Monday, December 5, 2016, 3:32 p.m. to 6:07 p.m.
   Room 237-C, Centre Block

   Subject Matter of Bill S-4, An Act to implement a Convention and an Arrangement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and to amend an Act in respect of a similar Agreement
   http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&DocId=8681509&File=0

   Now, read Ernewein’s remarks again, and see if you agree that in the instance of the Canada US tax treaty and its gaping tax treaty gaps this is true;
   “…..In point of fact, the essential point is that for most taxpayers that answer will be clear. What the treaty does is ensure that there are limits on each country’s right to tax and that there’s an ability to get a credit, or an exemption, but in the case of shared taxation to get a credit for the tax that’s paid in the other country to eliminate double taxation. ”

   Now read the entire thread starting here, https://openparliament.ca/committees/finance/41-2/32/nathan-cullen-10/ re FATCA being implemented by Canada on Canadian RESIDENTS, and see Ernewein obfuscate in answer to the very astute questioning being done by MPs Cullen and Rankin;
   https://openparliament.ca/committees/finance/41-2/32/nathan-cullen-10/

3. http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=8676337&Language=E&Mode=1#Int-9293914
   Conservative
   Mr. Steven MacKinnon:

   “……….How does Canada determine the order in which it negotiates bilateral agreements with a country? There are 92 treaties and you are saying they need to be modernized. How do you prioritize them?”

   Mr. Brian Ernewein ( General Director of the Tax Policy Branch at the Department of Finance ):
   “Thank your for the question. I’ll offer a couple of observations, and then I’ll turn to my colleague to see if she wants to add any more.
   There are a number of different considerations, but most of them are economic-based—that is, the level of investment between Canada and another country is probably the primary driver of whether to have a treaty or not. We seek to prioritize the countries with which we have the greatest investment, or they in us, as treaty partners or for treaty updates.
   The age or vintage of our treaty is also a factor, so in the case of Israel, it’s a 41-year-old treaty. As a consequence, it’s not surprising it’s a little bit out of date with respect to current Canadian treaty policy and presumably in relation to Israel as well. That is a factor in identifying our priorities.
   The other consideration, of course, is a shared interest. We may be very interested in having a negotiation with another country, but it might not be interested in having one with us, or vice versa. There needs to be that mutual desire for treaty negotiations to get those launched.”

   So we got FATCA’d by the US with the Finance Dept and Ernewein’s help – Canada decided that because of trade priorities, and “shared interest”, Canadian citizens and Permanent residents were expendable, and ran the FATCA bus over us and the Charter and Constitution in the name of expediency.

   He goes on to say;
   “..Our tax treaties are all designed with two general objectives in mind. The first objective is to eliminate tax barriers between two jurisdictions in order to promote bilateral trade and investment. Obviously, removing barriers to trade and investment are paramount in today’s global economy. Investors, traders, and others with international dealings want clear information on the tax implications associated with their activities both in Canada and abroad. Equally important, Canadians with business interests or investments abroad want to be sure that they receive fair and consistent tax treatment. It follows that one of the objectives of Bill S-4 is to remove uncertainty about the tax implications associated with doing business, working, or investing abroad.
   Bill S-4 would also reduce double taxation and encourage investment by reducing withholding taxes…..”

   And what of the FATCA withholding tax? And the gaping double taxation and tax treaty gaps that already exist in the Canada US tax treaty? No amendments to help Canadians deemed taxable USPs with their Canadian government created and blessed TFSAs, RDSPs and RESPs. No amendments to exempt the capital gains tax the US imposes on the proceeds from selling the Canadian family home, or investing locally in Canadian mutual funds, or forming a small business corporation (ex. the family medical practice and accounts of Canadian doctors – which the CMA wrote to Flaherty about https://www.cma.ca/Assets/assets-library/document/en/advocacy/FinanceMinister-reply-Jan2012.pdf , but which did not get exempted from FATCA).

   The hypocrisy and disingenuousness of the Ministry of Finance continues……

4. @Bubblebustin, you’ll be happy to see what John Weston (International Lawyer, McMillan LLP): (former MP for West Vancouver—Sunshine Coast—Sea to Sky Country 2008 – 2015) thinks about double taxation and tax treaties:

   “Mr. John Weston: “……. Such agreements are typical signs of progress between jurisdictions that encourage friendship, free trade, investment, and increased exchange between people.

   Let me quickly cover ten benefits I see in this agreement……….”………

   …. “One, it encourages trade with a decidedly democratic jurisdiction. Two, it allocates taxing rights between the two jurisdictions so that taxpayers are not subject to double taxation. Three, it reduces the risk of excessive taxation that may arise because of high withholding taxes on payments of dividends, interest, remittances, and royalties paid by a resident of one jurisdiction to a resident of the other. Four, it ensures that taxpayers will not be subject to discriminatory taxation in the foreign jurisdiction. Five, it provides greater certainty to taxpayers regarding their potential tax liability in the foreign jurisdiction. Six, it encourages adherence to the rule of law for people by promoting tax compliance. Seven, it increases tax revenues. Eight, it discourages good Canadians—those of Taiwan background—from renouncing their citizenship. In my experience, Canadians who hold dual U.S. citizenship are renouncing their U.S. citizenship in increasing numbers due to arbitrary and capricious practices by the IRS and the U.S. Treasury Department. ……”………………..
   I highly recommend that the committee support Bill S-4.”
   http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=8676337&Language=E&Mode=1#Int-9295093

   Now that Weston is no longer a CON MP, he says;
   “……In my experience, Canadians who hold dual U.S. citizenship are renouncing their U.S. citizenship in increasing numbers due to arbitrary and capricious practices by the IRS and the U.S. Treasury Department. ……”..”

   In contrast, this is what he claimed about the FATCA IGA while in the CON FATCA government;

   “..I am thrilled to report that on February 5, 2014, Canada and the
   United States signed an inter-governmental agreement under the longstanding
   Canada-U.S. Tax Convention. This agreement brings a series of lengthy
   negotiations to a conclusion which, I believe, will be of great benefit to
   dual citizens and Americans living in Canada……”…..
   http://isaacbrocksociety.ca/2014/03/06/a-letter-from-john-weston-regarding-the-iga-we-need-to-educate-the-mps/

   and then later only with the urging of a persistent and determined Brocker;
   http://isaacbrocksociety.ca/wp-content/uploads/2015/09/John-Weston-Letter.jpg

5. ‘FIs — New FATCA Guidance Provides Relief’
   https://assets.kpmg.com/content/dam/kpmg/ca/pdf/tnf/2017/ca-FIs-New-FATCA-Guidance-Provides-Relief.pdf

   I don’t know what this means;
   “….Legislative changes
   Under a recent change in tax law, financial institutions will no longer be able
   to use documentary evidence to determine the status of new accounts, starting July 1, 2017.
   This change aligns the FATCA onboarding procedures for new accounts with the CRS rules that
   require a self-certification to be obtained for all new accounts.
   The CRA has expanded the FATCA guidance to specify that financial institutions
   can continue to rely on documentary evidence procedures that were applied to new accounts
   opened between July 1, 2014 and June 30, 2017 until there is a change in circumstance.”

6. @ Badger,

   I don’t know, but you got me curious, so I’ve started looking around.

   Have you seen this? I found thisCRA Guidance on the Common Reporting Standard, which was issued on March 22nd. I just glanced over this just now, the section on Individual accounts in particular and it sounds related to it.

   Something also puzzling me is that while looking into this just now, I discovered that the link we have to CRA’s Guidance on FATCA no longer works. The link to it on CRA’s site, dated March 22nd, 2017, no longer works either.

   I wonder if there’s some connection between this Common Reporting Guidance being posted on the CRA site and the FATCA Guidance being taken down from the site??? (I can’t recall exactly when I last looked at the FATCA Guidance on their site, it was sometime this winter). Also wondering if the FATCA Guidance is still on their site at a different location, but I can’t find it.

7. Look carefully at anything to do with “self-certification” in chapters 8 and 9 – this is essentially a how-to guide for successfully lying to financial institutions. It will be interesting to see if the CRS guidelines supplant the FATCA guidelines, and if use of the new CRA form is used for both.

   Interesting, very interesting.

8. I think this is the current FATCA guidance. Found it through internal search, saw 22 March 2017 as the date.

   http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/us-eu/gdnc-eng.html

9. @Nonymous,
   Thanks very much for the new link to CRA’s FATCA Guidance. I’ll update our link to it.

10. Contains really strong statements against the imposition of FATCA on Canadians and others outside the US, refers to draconian BSA FBAR, expatriations, etc.

    Preview available and worth reading.

    ‘International Tax Evasion in the Global Information Age’
    Front Cover
    David S. Kerzner, David W. Chodikoff
    Springer, Nov 17, 2016
    https://books.google.ca/books?id=lRaRDQAAQBAJ&lpg=PA330&vq=fatca&pg=PA330#v=snippet&q=fatca&f=false

11. Posted also on other IBS threads, but here for posterity too;
    A revelation about a possible abuse of the IGA, a mention of the ADCS lawsuit, Stephen, and the hearing in the US tomorrow:

    http://www.cbc.ca/news/politics/irs-cra-taxation-fatca-1.4083232

    ‘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’

    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.”
    ..”……

12. “….While banks in Europe have made significant investments to implement the CRS and FATCA, the same does not hold true for banks in the U.S.,” Camille Seilles, a legal and tax adviser with the Luxembourg Bankers Association (ABBL), told Bloomberg BNA in an email statement. “This triggers a distortion in terms of regulatory costs and puts a strain on the achievement of a global level playing field regarding tax transparency………” ”
    https://www.bna.com/eu-politicians-step-n73014450512/

    The EU raises the question, but not Canada?

    Same for Canadian banks and NON-Financial institutions. And other Canadian arrangements that have NO US economic connection.

    So why isn’t our Canadian federal government raising FATCA as a NAFTA trade issue?
    The US has foisted substantial costs onto the Canadian financial sector and also non-FIs. All Canadian accountholders pay for FATCA implementation, and so do ALL Canadian taxpayers.

    That is a direct subsidy to the US financial sector and FATCA is a barrier to trade.

13. https://www.kitchenerpost.ca/opinion-story/7270845-american-worst-at-getting-taxes-done-simply/

    ‘American worst at getting taxes done simply’
    Opinion May 01, 2017 by James Bow Kitchener Post

    Don’t know if this was ever posted on the media and articles link as well.

14. Problems with the veracity/completeness of incomplete or mis/formation being disseminated for Canadians with the UStaxableburden re IRS collection inside Canada;
    “……..And sadly, you can’t hide behind
    the Canadian flag. The Cana-
    da-U.S. Tax Treaty provides the
    IRS with broad legal powers to
    collect income taxes and penal-
    ties due from U.S. citizens resid-
    ing in Canada. ……….”
    http://www.mindengross.com/docs/default-source/publications/the-taxletter-americans-in-canada-us-tax-issues.pdf?sfvrsn=6

15. Canadians:
    Urgent!
    Submit your comments urging that FATCA be a NAFTA issue at the upcoming re-negotiations.
    Townhalls for the public are upcoming (couldn’t find dates and locations, contact your MP).
    Online submission portal open http://www.international.gc.ca/trade-commerce/consultations/nafta-alena/index.aspx?lang=eng
    or,

    Written submissions can go to;
    NAFTA Consultations
    Global Affairs Canada
    Trade Negotiations – North America (TNP)
    Lester B. Pearson Building
    125 Sussex Drive
    Ottawa, ON K1A 0G2
    or via email
    NAFTA-Consultations-ALENA@international.gc.ca

    Deadline was July 18th, but has been extended.

    FATCA IS A NAFTA issue!

    See the recent NAFTA renegotiation submission letter http://www.occ.ca/wp-content/uploads/2013/05/OCC-NAFTA-Letter-with-CCC-July-2017.pdf from the Ontario Chamber of Commerce (OCC) to Minister of International Trade Chrystia Freeland. The OCC submission speaks in part against FATCA as a significant NAFTA issue they urge her to address;
    “………..• Reduce onerous extra-territorial U.S. financial regulation
    The Foreign Account Tax Compliance Act (FATCA) is an example of costly regulation imposed on
    Canada by the US to address a specific domestic concern. The law was enacted in 2010 by Congress to
    target non-compliance by U.S. taxpayers using foreign accounts.
    FATCA is enormously costly to Canada’s banks and insurers because it requires foreign financial
    institutions to report to the IRS information about financial accounts held by U.S. taxpayers, or by any
    entity in which U.S. taxpayers hold a substantial ownership interest.
    The Canadian Chamber supports international cooperation on tax administration, but only in a reciprocal
    environment. But the approach employed in this case effectively threatens Canadian investment and
    trade in an effort to address an entirely separate issue….”

    See other resources I link to at comments starting here;
    http://isaacbrocksociety.ca/surveys-let-them-know-what-you-think/comment-page-1/#comment-7942347

16. Ontario Chamber of Commerce’s submission for NAFTA renegotiation priorities included FATCA (see excerpt in comment above, or read at http://www.occ.ca/wp-content/uploads/2013/05/OCC-NAFTA-Letter-with-CCC-July-2017.pdf ).
    However, interestingly, note that the CBA Bankster letter of their NAFTA priorities does not;
    http://cba.ca/Assets/CBA/Files/Article%20Category/PDF/sub-20170718-letter-on-nafta.pdf

17. Note also that the CBA’s submission re NAFTA renegotiation says; “…….the CBA would be supportive of extending the prohibition of data localization to financial services as long as it is consistent with the banking industry’s domestic statutory and regulatory requirements…..”…….

    Re ‘data localization’
    See; “…data localization:
    Storing user data in a datacenter on the Internet that is physically situated in the same country where the data originated. People who fear losing private data to hackers favor data localization. …”…
    http://www.pcmag.com/encyclopedia/term/66382/data-localization

    US use and dissemination of Canadian personal and financial data is an issue under FATCA. There are really apparently no actual specific and robust controls over how the data is used once in US hands other than the CRA taking the US word for it; https://openparliament.ca/committees/ethics/42-1/8/ted-gallivan-6/ ex. 9:20 a.m.

    Assistant Commissioner, International, Large Business and Investigating Branch, Canada Revenue Agency
    Ted Gallivan

    “The U.S. government agreed not to, and we have a long history of exchanging significant volumes of information with the U.S. government, and so I have no reason to doubt their word.”
    https://openparliament.ca/committees/ethics/42-1/8/ted-gallivan-6/

    Objection to where Canadian owned financial data is held and processed has been raised by at least one complainant to the Privacy Commissioner ex. https://www.priv.gc.ca/en/opc-actions-and-decisions/investigations/investigations-into-businesses/2005/pipeda-2005-313/?wbdisable=true in an instance of outsourcing of financial services to the United States – where a Canadian bank was sending credit card account data across the border into the US for processing, thus exposing the data to US laws (ex. Patriot and Homeland Security) which would provide for wider dissemination and access and use of that data than if it were held only in Canada. The ruling did not result in protecting the complainant and said that the bank did not have to provide an opt-out for the consumer and acknowledge that a risk existed for US access to the data;
    “…The Assistant Commissioner was of the view that CIBC’s notification did not offend any provisions of the Act. The bank took the appropriate step of being transparent about its practices of using a U.S.-based third-party service provider for processing and about the possible risk that customer personal information might be lawfully accessed by U.S. authorities.

    She nevertheless encouraged CIBC to review the language of its cardholder agreements to ensure that its customers clearly understand that they do not have the right to opt out of having their personal information processed by a third-party service provider.”

    There are other objections that Canadians have raised to having their data sent across the border to a US company to be processed – ex. the Canadian census data contract awarded to “Lockheed Martin, based in Bethesda, Md., is the largest U.S. military contractor and also the U.S. government’s top manager of computer networks….” , and this says that “.Under NAFTA rules, companies from Canada, the U.S. and Mexico are eligible to apply for most medium and large-sized government contracts…”
    https://www.theglobeandmail.com/news/national/us-defence-giant-lands-census-contract/article1046974/

18. Ontario Chamber of Commerce’s submission for NAFTA renegotiation priorities included FATCA (see excerpt in comment above, or read at http://www.occ.ca/wp-content/uploads/2013/05/OCC-NAFTA-Letter-with-CCC-July-2017.pdf ).
    the CBA Bankster letter of their NAFTA priorities does not;
    http://cba.ca/Assets/CBA/Files/Article%20Category/PDF/sub-20170718-letter-on-nafta.pdf
    and the CBA’s submission re NAFTA renegotiation says; “…….the CBA would be supportive of extending the prohibition of data localization to financial services as long as it is consistent with the banking industry’s domestic statutory and regulatory requirements…..”…….

    I urge all Canadians to submit NAFTA re-negotiation submissions including objections to FATCA and urging the Trudeau government to protect Canadian data localization.

    For resources, how to submit, etc. see my comments starting here;
    http://isaacbrocksociety.ca/fatca-and-canada/comment-page-8/#comment-7944770 and also, starting here http://isaacbrocksociety.ca/surveys-let-them-know-what-you-think/comment-page-1/#comment-7942347

    I sent in my submission via their portal. The deadline for comments and submissions has been extended.
    http://www.international.gc.ca/trade-commerce/consultations/nafta-alena/info.aspx?lang=eng

    I also wouldn’t take for granted that any of the submissions will be shared with your MPs or with the Senate. Send a copy to your and other MPs and Senators also, and don’t assume that they’ll be privy to the public submissions – remember that when Finance called for public submissions on FATCA, they didn’t share them with the Parliamentarians and Senators who would be discussing and voting on the IGA. Remember that Blaze had to fight to get a copy http://maplesandbox.ca/2014/here-is-what-canadians-said-on-fatca-iga-the-cons-didnt-listen/ .

19. Is this https://youtu.be/InuLK0W3mmU the kind of ‘benefit’ ‘harmonization’ with the US will bring us?

    Will ceding of Canadian national sovereignty in various arenas like our local banking (FATCA), our tax system ( the CRA now an enforcer and Canadian taxpayers as direct funders of US FATCA) and control of our border will bring us? What ‘benefit’ will Canadians gain when our Canadian government overrides our constitution and our Charter to uphold or enable the imposition of extraterritorial US law in our domestic tax and banking and border (ex. “….Part of a bilateral agreement with the U.S., the bill, when passed, will grant American customs agents the right to carry weapons within Canada, perform body searches and detain – but not arrest – them.

    It will also allow U.S. agents to force a Canadian in a preclearance area, who has decided not to travel to the U.S., to stay in the area for questioning. Right now, that same traveller has the right to simply turn around and leave the area without action or consequence…..” http://globalnews.ca/news/3251407/border-strip-search-detention-questions-court-challenge/ and http://www.mondaq.com/canada/x/607872/Data+Protection+Privacy/Canadas+Privacy+Commissioner+Raises+Concerns+About+USCBP+Searches+of+Electronic+Devices https://bccla.org/2017/07/rights-border-still/ ).

    What other ‘benefits’ of US laws imposed inside our own autonomous sovereign borders – overriding our own civil and human rights will we enjoy via the collusion of those sworn to protect and serve Canada and Canadians?

20. US demands in upcoming NAFTA re-negotiation, and links to treatment of financial information and storage (and of course access by the US government via the Patriot and Homeland Security laws) if Canadian’s personal and financial data is stored in the US);
    “…Among the few rather specific ambitions disclosed by the Americans, however, related to where banks are required to store customer data. The U.S. objective calls for all three NAFTA partners to “refrain from imposing measures in the financial services sector that restrict cross-border data flows or that require the use or installation of local computing facilities.”

    The United States’ goal to update NAFTA rules governing financial services caught many in Canada by surprise, as the issue was never raised by U.S. President Donald Trump during his regular public admonishments of the 23-year-old trade deal. However, the U.S. banking industry clearly sees the issue as significant.

    “It is crucial for our financial services firms operating in a global environment to be able to decide where and how to structure [I.T.] infrastructure,” Peter Matheson of the U.S. Securities Industry and Financial Markets Association wrote in an op-ed for the July 13th edition of The Hill newspaper. “A modernized [NAFTA] agreement must effectively address this issue………”
    http://www.bnn.ca/nafta-conflict-brews-over-banking-data-1.808427

    Perhaps the US can supplement the FATCA IGA and the data it is receiving if Canada cedes sovereignty and allows for any and all Canadian personal (ex. health, school, government) and financial data to be stored in the US where only US law and power will prevail.

21. Involuntary inheritance of US taxablecitizenship status continues due to Canadian mothers sent to US to give birth when Canadian hospitals full;
    See;
    https://www.thespec.com/news-story/7521092-neonatal-crisis-mcmaster-children-s-hospital-forced-to-halt-care-for-new-admissions/

    “…No Ontario babies were sent to other provinces or to the United States this week.

    In addition, HHS says all babies born in this region were treated here.

    But a Hamilton mother who had to deliver her premature twins in Buffalo in 2008 because of similar shortages can’t believe there was potential for it to happen again.

    “We were told back in 2008 that they would increase beds,” said Maria Matozzo. “Here we are nine years later and nothing has changed.”

    She says it’s stressful enough to deal with a premature birth, never mind “knowing there are no beds available” on top of that.

    “No parent should have to worry they will be sent away,” she said. “I’m upset that our health-care system is failing us.”

    Matozzo describes mountains of complicated paperwork to recuperate costs and get Canadian citizenship for her boys after they were born in the United States. “We were sent there with no help or direction.” ….”

22. Useful resource?
    ‘Canada and the exchange of tax information’
    by Julie St-Cerny-Gosselin and Lyne Latulippe

    https://cffp.recherche.usherbrooke.ca/outils-interactifs/canada-and-the-exchange-of-information-for-tax-purposes/#_edn6

23. from;
    September 22nd, 2017
    By Electronic Submission via the Federal eRulemaking Portal (www.regulations.gov)
    The Honorable Steven T. Mnuchin
    Secretary
    Department of the Treasury
    1500 Pennsylvania Avenue, NW
    Washington, DC 20220
    Re: Executive Order 13777 (Enforcing the Regulatory Reform Agenda) and Section 871(m)’

    “The Investment Industry Association of Canada (“IIAC”) is writing in response to the Department of the
    Treasury’s (“Treasury”) Request for Information (82 FR 27217) of June 14, 2017, in part, to identify
    regulations that impose costs that exceed their benefit and should be modified or eliminated pursuant to
    Executive Order 13777. The IIAC represents 130 IIROC-regulated investment dealer member firms in the
    Canadian securities industry1 and we appreciate the opportunity to encourage Treasury and the IRS to
    review and consider amendments to the Section 871(m) Final Rules2 based on the policy goals of Executive
    Order 13777.
    The IIAC supports the policy objectives behind the Section 871(m) regulations. The Final Rules, however,
    are complex and burdensome, despite the lack of clear evidence that certain aspects of the regulations
    meaningfully prevent tax avoidance as originally intended by Congress. The IIAC has previously expressed
    our concerns regarding aspects of the Final Rules in several submissions to Treasury and the IRS, including
    a May 24, 2017 submission3………..”…………..
    ………….”International Implications
    The scope of the Final Rules and their application to non-U.S. firms, and particularly QIs, is unclear and
    this should be taken into consideration as Treasury and the IRS determine how best to move forward. The
    United Kingdom, France, Spain, Italy and Germany have raised jurisdictional concerns as to whether or
    not the U.S. has the authority to impose dividend withholding tax on dividend equivalent payments
    between foreign counterparties outside of the U.S. The Canada Revenue Agency has not publicly
    commented on this specific issue at this time. However, Canadian QIs could potentially be in the position
    where they need to decide if they are going to be compliant with local tax laws or their QI Agreement. If
    Canadian QIs withhold on payments of dividend equivalent amounts, but local authorities have
    determined that these amounts are not subject to withholding at source, clients would be penalized as
    they would be taxed according to U.S. laws and yet not able to receive any tax credits under the treaty.
    This will result in contradictory treatment of similar payments across jurisdictions and will create an

    unlevel playing field within the securities industry depending on how various countries respond to the
    jurisdictional question. “……………
    Page 5
    http://iiac.ca/wp-content/uploads/IIAC-Letter-to-Treasury-and-IRS-re-Executive-Order-13777-Enforcing-the-Regulatory-Reform-Agenda-and-Section-871m.pdf

    Interesting comments about “…jurisdictional concerns..”, and the potential for paying US tax but without being able to claim credit for it under existing tax treaty with US.

24. “Interesting comments about “…jurisdictional concerns..”, and the potential for paying US tax but without being able to claim credit for it under existing tax treaty with US.”

    Very. Thanks for that link.

25. Searching brings up a 2016 letter from the BBA (British Banking Association?) to the IRS:

    The proposed QDD rules require prospective QDDs to agree to take primary withholding responsibility for section 871(m) transactions. During the course of implementing FATCA, a number of banks and industry bodies (including the BBA) highlighted that in their jurisdiction, withholding on behalf of a foreign government may not be permitted(1), and that, at best, in a number of other countries clarification was needed from local tax authorities before withholding could take place.

    Addressing this was part of the purpose of the Intergovernmental Agreements signed for FATCA purposes, agreed by the respective tax authorities.

    However, in the case of section 871(m) and the QDD rules, we understand that there have not been equivalent discussions to address the withholding issue. The IRS needs to engage with their counterparts in other tax authorities to discuss these issues.

    There is also an issue for ensuring appropriate double tax relief to ensure that recipients of payments do not suffer tax on a payment under both local law and section 871(m). We are not aware that the tax authority of any country has addressed this issue as yet and time will be needed for governments to consider and address these rules. The consequence of applying section 871(m) is that income which would have previously been treated as sourced and taxable in one country will now instead be treated as taxable in the US. Since this will result in a shift of tax from the domestic revenue to the US, we would encourage active engagement with domestic tax authorities to eliminate double taxation. In particular, if a domestic authority does not recognise the section 871(m) tax, or accept the US Treasury view that it is a dividend, that may lead to the denial of a tax credit.”
    https://www.bba.org.uk/download-file/?f=eyJ1cmwiOiJodHRwczpcL1wvd3d3LmJiYS5vcmcudWtcL3dwLWNvbnRlbnRcL3VwbG9hZHNcLzIwMTZcLzA5XC9CQkEtQ29tbWVudHMtb24tTm90aWNlLTIwMTYtNDIucGRmIiwibmVlZGxvZ2luIjpmYWxzZSwidXNlciI6ZmFsc2V9