Reply From Canadian Bankers Association (Updated)

71 thoughts on “Reply From Canadian Bankers Association (Updated)”

1. fantastic idea @blaze, I knew that Susan Eng was talented and tenacious, but not that she is also a lawyer and – in taxation. Bonus for all of the ‘Canadian Grandmas/Grandpas’ – since she’ll understand the issues…..maybe all the Canadian Brockers should join CARP and start a lobbying block re the IRS threat to seniors, their estates, and their children and grandkids…..

2. Great Idea. I just joined!

3. If anyone else is interested, you don’t have to be retired or a senior to join CARP. You just have to be 50 or over. Here’s a link to their website. http://www.carp.ca/

4. Susan Eng is quite a firebrand. This may be a keen move on our part. I’m going to wait a week or two and then send her an email!

5. All reactionaries are paper tigers. In appearance, the reactionaries are terrifying, but in reality, they are not so powerful. From a long-term point of view, it is not the reactionaries but the people who are powerful.

6. Oldie but a goody!

   http://www.theglobeandmail.com/news/opinions/opinion/help-im-on-the-irs-hit-list/article2171697/comments/

   studentadvocate
   6:36 AM on September 20, 2011
   My aunt was born in US, but lived in Canada as a Canadian citizen most of her 60+ years. She was scared of being arrested by American agents or losing much of her retirement savings to this US cash grab. I made it my research project and read case law, the tax treaty, and reports from international tax firms. I learned:

   – US has no power in Canada to collect taxes, take wages, or seize Canadian bank accounts. These are “extra-jurisdictional” tax claims, very difficult to collect, and our courts favored Canadian defendants.

   – in 2006, less than 40,000 US people in Canada filed US tax returns. In 2006 there were maybe 600,000 of them here.

   – Under Tax Treaty, Canada Revenue cannot collect US tax from Canadian citizens born in US, unless the claim was from before they became a citizens. And CRA told Don Cayo at Vancouver Sun they would not collect any US bank reporting penalties.

   – My aunt’s bank has no record of her US birth. Treating a Canadian bank customer differently because they were born in the US is discriminating based upon “nationality or origin”. This violates our Charter and Human Rights law. Sending customer bank records to a foreign state, or closing an account because of where they were born, is discriminatory.

   It’s sad that the US – 14 trillion in debt and borrowing money madly to keep the lights on – wants part of my aunt’s life savings. They can’t tax billionaires and GE, so now they want her money! Sadly, she will never vacation or visit the US again. Considering all the guns and how things are falling apart there that’s OK with me 🙂

7. Last one for tonight

   http://www.rightsidenews.com/2011092214550/us/politics-and-economics/the-attack-on-accidental-americans.html

8. @Everyone

   This is not probably the best case to be associated with as it is basically about a real Canadian tax cheat however, it is interesting that charter considerations are being made in court in reference to information sharing provision under Double Taxation Treaties.

   http://www.cbc.ca/news/canada/story/2012/04/05/taxes-offshore-court-action.html

   http://www.cbc.ca/news/pdf/zabra-20120309.pdf

9. @Everyone

   While I am not exactly thrilled with the prospect of the above mentioned person winning his case against CRA if he does it will make FATCA compliance that much more difficult under the Charter of Rights and Freedoms. (In the sense that Tax Treaties Canada signs with other countries such as the US must be Charter compliant).

10. @all, I found a lot of useful information here (it’s quite detailed). Excerpt: WHAT IS A WITHHOLDABLE PAYMENT?
    An FFI’s withholding obligations (discussed above) apply to withholdable payments. Withholdable payments are:
    U.S. source fixed or determinable annual or periodical income (FDAP), such as interest and dividends;
    Gross proceeds from the sale or disposition (in a taxable transaction) of any property that produces U.S. source interest or dividends.
    The proposed regulations exclude many types of U.S. source FDAP from the definition of withholdable payments, including:
    Interest or original issue discount on short-term obligations;
    Income that is effectively connected to a U.S. trade or business; and
    Payments made in the ordinary course of business (including interest on payables from the acquisition of nonfinancial services or goods).
    http://blogs.reuters.com/financial-regulatory-forum/2012/04/04/financial-institutions-and-investment-funds-should-prepare-now-for-fatca/

11. …only the full compliance date has been extended to January 2014, hasn’t it?

12. You may note (and add comments) that this self-righteous lawyer has not responded to Joe Link’s scenario of other nations instituting their own FACTA’s

    http://ataxingmatter.blogs.com/tax/2012/03/still-havent-filed-your-fbar-dont-wait-til-you-get-hit-with-forfeiture-like-this-alaska-plastic-surg.html#comment-6a00d8341cf2a753ef0163039a535b970d

13. “But FATCA could also prove to be a marketing boon for Canadian financial institutions that don’t operate in the U.S., and an incentive for marginal players to exit the U.S. market.”

    Again, I reiterate, there will be many opportunities to remain proudly and safely Canadian.

    http://www.theglobeandmail.com/report-on-business/commentary/barrie-mckenna/why-the-irs-crackdown-puts-canadian-banks-in-a-tight-spot/article2275481/

14. @joe, someone get a fire extinguisher over there!

15. Here’s another one of those FATCA submissions:
    http://www.clhia.ca/domino/html/clhia/clhia_lp4w_lnd_webstation.nsf/page/32ADB200938EFB6F852579F10064C7DA!OpenDocument
    from:
    “The Canadian financial services sector:………” This submission has been prepared jointly by the Canadian Bankers Association, the Canadian Life and Health Insurance Association, the Investment Funds Institute of Canada, and the Investment Industry Association of Canada (descriptions of each association are included in Appendix A). ”

    “We would also like to acknowledge at the outset the value of the proposed “intergovernmental approach” that Treasury is exploring with several countries that would see FATCA reporting on a tax authority-to-tax authority basis. This is a welcome development and we encourage Treasury to undertake similar processes with other countries, including Canada. In addition, we underscore the need for a global approach to FATCA that minimizes differences in compliance for global FFIs that will be operating in various “FATCA partner” countries with different bilateral intergovernmental agreements (IGAs) as well as in “non-FATCA partner” countries without IGAs. Our comments on the Proposed Regulations are not premised on the existence of any IGAs but rather reflect the changes that we believe are necessary or desirable for the implementation of FATCA. ”

    Apologies if this is posted in another thread.

16. @ Badger
    If I read that right then those b-turds are throwing Canadians under the bus. The words “reporting on a tax authority-to-tax authority basis” are downright chilling. The words “we underscore the need for a global approach to FATCA” reinforce Just Me’s contention, which I share, that FATCA is the first step to GATCA.

17. @Em, they go where they see their global interests lie, with no regard for allegiance to a higher national interest or sovereignty.

18. see: http://www.iiac.ca/welcome-to-iiac/events/upcoming-events/

    “Welcome to iiac.ca, the website for the Investment Industry Association of Canada (IIAC).

    IIAC is a member-based professional association with 180 members representing a majority of IIROC registered organizations (IIROC is the national self regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada).

    IIAC advances the growth and development of the Canadian investment industry, acting as a strong, proactive voice to represent the interests of our members and the investing public.”

    (regarding the above mission statement – WHERE IS THE so-called ‘INTEREST’ OF THE “INVESTING PUBLIC” in all this???)

    Foreign Account Tax Compliance Act (FATCA) Compliance Solutions Conference

    Date: May 30-31, 2012

    Location: ONE KING WEST, Toronto, Ontario

    Presentation Information:

    The Canadian Institute’s FATCA Compliance Solutions conference will offer advice and strategies foreign financial institutions (FFIs) need to transition into FATCA compliance.

    Topics include:
    Identifying practical implementation strategies for FFIs with global operations
    Coordinating your existing AML/KYC procedures with FATCA regulatory requirements
    Complying with IRS and Treasury Regulations and Guidance: Critical strategies for identifying U.S. accounts
    Analyzing passthru payments and FATCA’s impact on securities and investment banking

    This program will feature speakers from a variety of different professions, including tax professionals, compliance officers, operations and IT, in-house counsel and internal auditors. IIAC’s Andrea Taylor will be co-chairing the program along with John Staples, Partner at Burt Staples & Maner LLP.

    For more information or to register, please click here.
    IIAC Members are eligible for a discount. Please contact Katherine Tiller (ktiller@iiac.ca) for more information

19. If you want to see if you’re involved with one of the IIAC members – check this list:
    http://www.iiac.ca/welcome-to-iiac/about-us/iiac-members/

20. So, I’m sticking with my credit union.

21. The following comments did not make the transfer from isaacbrocksociety.com:

    1. For the record, I am inputting the
       Canadian Bankers Association testimony at the May 15th FATCA public
       Hearing. I chose this thread as it seemed to have the most discussion
       regarding their position. This so you can see what was said publicly
       and see if it provides any reassurance as to how strong they will be in a
       push back to FATCA. You be the judge.

       MS. HWA: And next we’ll all hear from Mr. Darren Hannah representing the Canadian Bankers Association.

       MR. HANNAH: Good afternoon. My name is Darren Hannah and I’m the
       director of banking operations with Canadian Bankers Association. The
       CBA represents the banking industry in Canada. Our main role is to
       advocate for effective public policies that contribute to a sound,
       successful banking system that benefits Canadians and Canada’s economy.

       Our submission on the regulations was prepared jointly with the other
       major financial sector associations in Canada. My intention is not to
       cover all of the aspects of that submission, but rather to touch on some
       key recommendations and to offer some thoughts on the intergovernmental
       agreement process that the United States Government has undertaken with
       several countries.

       At the outset, I want to provide you with a brief overview of the
       banking system in Canada and the Canada/U.S. relationship since it’ll
       give you some context for our discussion.

       Canada has a strong national banking system regulated by the
       government of Canada. Canada is a strong economic partner with the
       United States. In launching the 2011 Beyond the Border Initiative,
       President Obama and Prime Minister Harper described the relationship as
       follows: “Over $250 billion of direct investment by each country in the
       other and bilateral trade of more than half a trillion dollars a year in
       goods and services create and sustain millions of jobs in both
       countries.”

       At the Canada/U.S. border, nearly $1 million in goods and services
       crosses every minute, as well as 300,000 people every day who cross for
       business, pleasure, or to maintain family ties.

       The U.S. Congressional Research Service reports that Canada is the
       largest source of foreign direct investment in the U.S. banking and
       financial sectors. And most importantly, Canada is not a tax haven and
       is a low risk of harboring U.S. tax evaders. Canada has a higher
       personal income tax rate than the U.S. and has an automatic nonresident
       tax information sharing arrangement with the U.S. that is unique. This
       combination makes it highly unlikely that a U.S. tax evader would ever
       choose Canada as his destination of choice.

       We believe the U.S. should — officials should take that into account
       when drafting regulations for FATCA in developing foreign financial
       institution agreements. There is discretion in the regulations to adjust
       for risk, and we continue to encourage Treasury and the IRS to use it.
       So that’s the backdrop for the comments I want to make today.

       I think it’s well understood that FATCA is – FATCA compliance is
       challenging financial institutions. To date, by our count, there have
       been about 350 different submissions from 30 countries representing all
       parts of the financial sector that have been made on FATCA notices and
       regulations. All of them have outlined the number of technical,
       operational, and legal issues that they need to contend with to
       implement FATCA.

       The complexity stems from the fact that FATCA affects the interaction between the financial institution and its client.

       It sets out rules about how to classify accounts. It sets out rules
       about the information that has to be collected and recorded on accounts,
       the information that has to be reported to the IRS, withholding on
       income where a client is deemed to be recalcitrant, or indeed, closing
       accounts and terminating relationships. All of these issues are also
       governed by a body of domestic practice, legislation, and contractual
       obligations, and therein lies the heart of the complexity:

       How do you satisfy Canada’s strong comprehensive and internationally
       allotted domestic regulatory environment while facing U.S.-based
       requirements under FATCA, all while working hard to keep customers
       happy?

       And that’s not an easy balance.

       We think that more needs to be done to reduce the complexity of FATCA
       and to make it more workable for financial institutions. It is on that
       that our recommendations are based. Clearly, there’s not enough time to
       go through all of the recommendations, but I do want to highlight a few
       of them that we think deserve some special merit and attention.

       First and foremost, we’re concerned about the documentation and
       document retention requirements. The requirement to renew documentation
       upon expiration is a recipe for creating recalcitrant account holders.

       Documentary renewal isn’t required in Canada and many customers will
       have little incentive to come into a branch to renew their
       documentation. We believe that re-documentation should only be — is only
       appropriate where there’s a change in circumstances that suggest an
       account holder has become a U.S. person.

       As well, the requirement to photocopy documentation is problematic
       from an operational and a legal perspective. As it stands, if banks
       needed to renew all expired documentation and keep photocopies of every
       document, they would need to regularly re-document the vast majority of
       their client base and do so in a manner that raises some serious legal
       and operational issues. This simply isn’t feasible.

       More broadly, and touching on a theme a number of people have touched
       on today, we recommend that regulations allow FIs to rely on their
       domestic anti-money laundering and KYC practices, especially where
       you’re coming from a country that’s a FATF member.

       The complexity of the entity account system is problematic. The
       regulations propose somewhere in the neighborhood of 40 different entity
       classifications. As a practical matter, we think that’s simply too many
       for frontline staff to contend with. We think the system needs to be
       greatly simplified. In the area of expanded affiliated groups, we
       appreciate the addition of the limited branch and limited affiliate
       categories, but we are skeptical, though, that the legal issues that
       give rise to these situations are going to be resolved by 2015.

       We, therefore, recommend that the groups be allowed to hold limited
       affiliates and limited branches indefinitely. The restrictions placed
       around these entities are substantial, so at that point we don’t view
       them as a significant risk of tax evasion.

       In the area of deemed-compliant financial institutions, the
       regulations propose a number of categories, and we propose some
       amendments we think make them work better. For example, with respect to
       the local bank and the local FFI categories, we think they’re good
       ideas, but we think some improvements need to be made, like lifting the
       restriction on the marketing of a U.S. dollar account. That’s a product
       that’s incredibly common in Canada given the proximity and the
       relationship, and raising the asset size limit.

       More generally, we believe there should be a provision allowing
       financial institutions to apply for deemed-compliant status if they feel
       they’re within the spirit of the deemed compliant categories but can’t
       meet the strict terms of the regulations. They should be given an
       opportunity to make their case.

       Finally, we need more time, again, a theme you’ve heard today.
       Financial institutions cannot be expected to start building systems
       until the regulations and the FFI agreements are finalized. It’s,
       therefore, unreasonable to expect that a financial institution will be
       in a position to comply when entering into FFI agreements in mid-2013.
       Therefore, we’re recommending that FFIs get an 18-month implementation
       window from the time they enter into their agreement.

       Finally, I want to highlight the proposed intergovernmental agreement
       process that the U.S. has entered into with several European countries
       and, we hope, with several others.

       As we stated in our comment letter, the CBA is a strong supporter of
       that process and we want to see similar agreements for other countries,
       including Canada. The CBA and many commentators have said repeatedly
       that FATCA at its heart is an information sharing arrangement, and,
       therefore, is best addressed on a state to state basis, building on the
       tax information sharing mechanisms that are already in place.

       In closing, I just want to reiterate that Canada is a low-risk tax
       jurisdiction. We are a trusted neighbor with a long history of working
       closely with the United States on regulatory issues, and we trust that
       you will take that into consideration, as you consider our comments and
       implement FATCA. And that concludes my remarks. Thank you for your time.

    2. Also, I am adding the testimony of the TD Bank Group, a worldwide financial services group headquartered in Toronto, Canada.

       MS. HWA: All right. Next we will hear from Peter van Dijk representing the TD Bank Group.

       MR. VAN DIJK: So, my name is Peter van Dijk, and I’m the head of tax
       at TD Bank Group, a worldwide financial services group headquartered in
       Toronto, Canada. In the United States, TD Bank, America’s most
       convenient bank, is one of the ten largest banks with more than 25,000
       employees and 7.5 million customers.

       TD bank has approximately 21.5 million customers worldwide. Our
       business includes both Canadian and U.S. personal and commercial
       banking, wealth and insurance, and wholesale banking.

       TD fully supports FATCA’s goal of minimizing U.S. tax evasion. We
       commend the Treasury Department and the IRS for their efforts to
       achieve, as stated in the preamble to the proposed regulations, an
       appropriate balance between fulfilling the important policy objectives
       of Chapter 4 and minimizing the burdens imposed on the stakeholders.

       We also believe that the announced intergovernmental approach to
       FATCA implementation is a promising step to minimize administrative and
       compliance burdens and address conflicts between FATCA and local laws.

       That being said, we have some serious concerns about the proposed
       regulations, which would require us to make significant and expensive
       changes to existing systems and processes to identify and report the
       small number of our account holders who are U.S. persons, the vast
       majority of whom do not owe any U.S. tax.

       The proposed regulations also would put us in an untenable position
       of complying with FATCA or complying with Canadian privacy and access to
       banking legislation.

       My testimony today covers three main points: risk, documentation, and
       timing. And my counsel has asked — Phil West, he has asked me to repeat
       this: risk, documentation, and timing.

       So, first, the risk based approach to FATCA implementation should be
       adopted. This should include special rules for low-risk, locally focused
       retail banking. We’ve heard that before today.

       Second, the documentation and due diligence required by proposed
       regulations should be better aligned with AML and KYC requirements.
       Failure to do so, among other things, makes FATCA implementation
       disproportionately expensive and unfairly favor U.S. banks over FFIs in
       the important and growing online banking area.

       Third, the time for FATCA implementation, and we’ve heard this before
       too, should be extended. FFIs should be given 24 months, not 18 – 24
       months to implement FATCA after the letter of the release of the final
       regulations or the conclusion of the relevant intergovernmental
       agreements.

       Returning to the first point, Treasury and the IRS should take a
       risk-based approach to FATCA implementation. We believe that the
       statute’s regularity authority should be used to interpret the statute,
       so that the costs and benefits of FATCA compliance are balanced to a far
       greater degree. One logical way to improve the balance would be to
       adopt a risk-based system with appropriate special rules for low-risk
       businesses.

       For example, Canadian retail banking is a particularly low-risk
       category. Ninety-eight percent of Canadian retail bank account holders
       are Canadian residents. These account holders typically are subject to
       tax in Canada at rates comparable to or, most likely, higher than those
       in the United States. The number of U.S. persons holding Canadian bank
       accounts is small. The number of U.S. persons with residual U.S. tax
       liability is likely even smaller. And the number of those who are not
       reporting are likely de minimis.

       Thus, the cost for Canadian financial institutions to create new
       systems and processes to find what will ultimately amount to few
       Americans is far disproportionate to the potential benefit to the U.S.
       Treasury.

       A risk-based approach could be implemented through agreements between
       the United States and other governments along the lines described in
       the joint statement on FATCA implementation. In fact, the joint
       statement recognizes the willingness of the United States to identify in
       intergovernmental agreements, specifically categories of FFIs that
       would be treated as deemed compliant or representing a low risk of tax
       evasion. We urge the Treasury and the IRS to include locally focused
       retail banks in this group irrespective of the size of their balance
       sheets.

       My second topic is documentation and due diligence requirements of
       the proposed regulations. They are inconsistent with existing — and
       we’ve heard this many times before, but it’s an important point — they
       are inconsistent with existing AML/KYC requirements and market
       practices. They require significant operational changes, they conflict
       with foreign law, and they unfairly benefit U.S. banks. I will highlight
       several examples and our specific recommendations.

       There continue to be inconsistencies between documentary evidence
       applicable under FATCA and identification acceptable for account opening
       in Canada. Certain documents, such as a social insurance number or SIN
       card, are widely used for identification and are acceptable under
       AML/KYC, but not appear to qualify as documentary evidence under the
       proposed regulations because they lack an address or are not
       specifically mentioned in a jurisdiction’s attachment to the qualified
       intermediary agreements.

       We suggest that the regulations be amended to expand the category of
       documentary evidence to include documents typically used for
       identification in a jurisdiction with approved AML/KYC rules including,
       but not limited to, those referenced in the jurisdiction’s qualified
       intermediary attachment.

       Further, the documentation requirements in the proposed regulations
       unfairly favor American institutions over FFIs with regard to their
       ability to compete in the fast-growing online banking space. As a matter
       of fact, the documentation requirements, as proposed, would completely,
       in my view, eliminate the convenience of opening a bank account online.

       Online banking generally relies on third-party identification
       services to verify identities of prospective account holders. The
       proposed regulations should be amended to permit the use of these
       services to document accounts.

       Another example of how FATCA should be aligned with existing AML/KYC
       standards relates to the renewal of documentary evidence. We recommend
       that documentary evidence need not be renewed until a change in
       circumstances or when the documentation is required to be updated under
       AML/KYC standards. Requiring otherwise would force FFIs to incur
       significant cost with likely very little benefit to the U.S. Treasury.

       Another troubling example is the requirement that FFIs maintain the
       original, a certified copy, or photocopy of documentation. This too is
       inconsistent with existing AML and KYC rules as well as Canadian privacy
       laws. And, again, this is a point that has been made a couple times
       before.

       In addition, we’ve estimated that the documentary evidence renewal
       requirement and photocopying requirement together would cost our retail
       bank alone $6 million in initial implementation and $6 million annually
       to maintain.

       We recommend that FFIs be permitted to record, in their account
       opening files, the relevant information from the documentary evidence.

       The last example I will mention is the entity account documentation
       requirements. FFIs must identify entity accounts as one of the 30 or
       more FATCA entity types and obtain documentation beyond that’s required
       by AML and KYC. As explained in our April 30th letter, we believe that
       the entity accounts documentation requirements can and should be made
       considerably less burdensome.

       We’re hopeful that these and other inconsistencies between the FATCA
       documentation and due diligence requirements and AML/KYC and market
       practices can be reconciled in the final regulations and/or future
       intergovernmental agreements.

       Finally, more time is needed for FATCA implementation. Retail banks
       typically require 18 months to make changes to account opening systems
       and processes. Given their complexity, the FATCA rules will require even
       longer to implement. Further, we cannot even begin implementation in
       earnest until the regulations, intergovernmental agreements, and
       relevant forms are finalized.

       As a result, we recommend that the FFIs are given at least 24 months
       to implement a new regime from the letter of the date of the final
       regulations and the date of the relevant intergovernmental agreement.

       I hope you will favorably consider the points that I’ve discussed
       today about risk, documentation, timing — again, at the request of Phil,
       he thought that this would be particularly effective — as well as other
       recommendations described in TD’s April 30th submission.

       We look forward to a continued dialogue and I thank you very much for your time.

    3. @JustMe

       Good work on finding this. Nothing unexpected they are basically
       saying what they have to will stressing there continue to be huge legal
       conflicts. What is more important and interesting is the head of the
       Canadian Bankers Association Terry Campbell is starting to talk
       publically about FATCA in front of Canadian audiences in a not so
       “cooperative” way.

    4. @justme, TD Bank: ” How do you
       satisfy Canada’s strong comprehensive and internationally allotted
       domestic regulatory environment while facing U.S.-based requirements
       under FATCA, all while working hard to keep customers happy?” I read
       this a shot against the US’s handling of its financial affairs and how
       the customer is important to Canadian banks (maybe they realize that
       when a customer is unhappy, their dollars also walk out the door?) As
       far as Canadian law goes, the Treasury has already stated that some
       countries may have to change their laws to implement FATCA, leaving it
       up to each country to work out the details. In light of the negative
       response to DATCA, is reciprocity one way of helping derail of the FATCA
       train?

    5. @JustMe: Thanks! It doesn’t
       exactly instill confidence that Canadian banks care about legal rights
       of customers, does it? Most of the focus seems to be on how difficult
       and costly implementation and administration will be to the banks.

       @Bubblebustin: That exact same sentence jumped out at me. “Keep
       customers happy?!?” It sounds like he thinks we are kids throwing a
       temper tantrum. Why wasn’t the focus on ensuring we are protecting our
       customers legal banking, privacy and human rights. I personally found
       reference to Canadian laws to be superficial and weak.

       It also seems CBA is promoting government to government exchange of
       information. If a recent article in Globe and Mail was accurate, the
       government may be attempting to negotiate that. This again could make
       “US persons” in Canada second-class Canadian citizens and residents. No
       other group of Canadians has information about their financial assets
       submitted by to Canadian government for submission to a foreign
       government.

       Through the tax treaty this information on income from assets
       invested in one country while living in the other is already exchanged
       between US and Canadian governments. So, why negotiate anything
       further?

       In one letter and four e-mails, I have advised Mr. Flaherty he needs
       to tell Canadian banks they must adhere to Canadian law. Plus, he needs
       to assure Canadians that Canadian law .will not be changed to
       accommodate a foreign government. Until he does that, I worry that we
       may all be vulnerable to losing our rights to managing our assets and
       finances in privacy and with confidence with our Canadian financial
       institutions.

       So far, nothing from CBA, TD or the government assures me that they will not capitulate to FATCA
       .

    6. @Blaze

       I think for a long time all of the involved parties on the Canadian
       side have wanted some type of “mutually beneficial” agreement with the
       US. This is simply following the pattern of US Dominion relations since
       the War of 1812(Webster Ashburton Treaty, Treat of Washington, Boundary
       Waters Agreement etc).. The problem is in this particular dispute is I
       can’t figure what exactly a mutual beneficially agreement would even
       be(and not to embellish but many people think I am really smart person)
       and I have a feeling Flaherty’s staff can’t figure that out either.
       Repealing Citizenship taxation is actually as much of a solution to
       FATCA as repealing FATCA itself.

    7. @Tim, citizenship based taxation is the sacred cow that needs to be slaughtered!

    8. @Tim: I think you’re a really smart
       person, too. I always look forward to your input. I cringe to think
       what a “mutually beneficial” agreement will be. I don’t think I’m
       reassured that even Flaherty’s staff don’t know what that could mean.

       Plus, Steven Mopsick tells us Washington is run by highly educated,
       intelligent, moral, caring, people and they give us citizenship-based
       taxation, HIRE, FATCA, FBAR, OVDP, Ex-PATRIOT, etc. etc.

       Where is Steven anyway? Steven was ticked off at Michael Miller in
       the Quiet Disclosure thread when Michael called him an “outlier” a
       couple of weeks ago. Steven said “We’re done” and I think that’s the
       last we heard from him.

       Come back Steven, don’t lawyers disagree all the time? You can take it, can’t you?

    9. Flaherty’s people to be fair are
       “smarter” in my opinion than the people in the US Treasury. I linked to a
       video below so you can see for yourself who Flaherty’s people are. One
       thing that is a bit shocking is how young they are like the woman in
       charge of Federal Gas Taxes.

       The video below gets more interesting towards the end:
       http://senparlvu.parl.gc.ca/Guide.aspx?viewmode=4&categoryid=-1&eventid=7749&Language=E#

       Here is the way I describe tax policy there are two types of taxes as
       I call them Academic and Political. Academic taxes are those created by
       the “best and the brightest” whether they be in Ottawa, Washington DC,
       or Wellington, NZ. Examples of Academic Taxes are the Canadian GST/HST,
       much of the modern Canadian Income Tax System, US FATCA, US HEART or the
       Mark to Market US Exit Tax(Modeled essentially on the Canadian exit
       tax). Political Taxes are those created by politicians to serve
       political purposed first and revenue raising purposes second. Examples
       of these would be Citizenship based taxation in the US(a US civil war
       policy completely at odds with the rest of the world), much of the US
       internal revenue code, the Estate Tax(eliminated in Canada in the 1970s
       in favor of deemed disposition on death), the old Canadian Manufactures
       Sales Tax, and the old Ontario Provincial Sales Tax. Overall Canada has
       more “academic” taxes thus making the best and brightest in Ottawa even
       better and brighter than in DC. For example the GST, a creation of the
       best of brightest in Ottawa has a lot of provision that raise very
       little revenue but make the tax more “academically” “pure”. Charging GST
       on supplies to embassies and consulates who can get the tax they paid
       refunded from CRA after the fact is an example.

    10. @academic v political taxes, you offer a great perspective on the difference. One is thought out, the other often knee jerk.

    11. @Blaze

        My sense is Flaherty’s idea of a mutually beneficial agreement would
        be an “expansion” of the existing automatic information sharing
        agreement between Canada and the US that is completely reciprocal and
        centered around residency not citizenship. The problem is from a
        legislative perspective on the US side the existing information sharing
        arrangements are irrelevant. I am sure Canada wouldn’t mind the US
        sharing more information on Canadian tax residents with assets in the US
        but that is irrelevant from the perspective of FATCA. I would tend to
        doubt that the IRS even has the legal authority to force US financial
        institutions to collect additional information from Canadian tax
        residents beyond what they already do. FATCA was drafted to be
        completely unilateral and one sided basically in terms of reciprocity.

    12. @Tim: I like to think “our” people
        are smarter than “their” people (although some of the policies and
        comments that come out of Ottawa and Toronto sometimes lead me to
        conclude otherwise).

        Unfortunately, our “smart” people seem to be negotiating “mutually
        beneficial” (without understanding what that means) with “intelligent”
        people who are only interested in “American beneficial,” so I don’t know
        where this will all end.

        Do you have any sense of when we might have some definite statements about what the government thinks is “mutually beneficial.”

        Can you also tell me why it seems to be impossible for the Minister
        of Finance or the Prime Minister to make two simple statements: 1.
        Canadian banks must adhere to Canadian laws and 2. Canadian laws will
        not be changed to accommodate a foreign government.

        Those two statements seem to me to be a no-brainer. They would do
        much to reassure many of us. Yet, our Ministers of Finance and the
        Prime Minister won’t say them. Making those statements might also give
        Canadian banks something to “take to the bank” in discussions with
        Washington.

    13. @Tim: Thanks. It seems you posted the answer to my question just as I was posting the question.

        Any input you can give on the second part about why it is so
        difficult for the Finance Minister and PM to make two simple statements
        would be appreciated.

    14. @Blaze, I agree that those two
        statements would go a long way, but then that involves making a clear
        stand and for some reason (diplomacy, stall tactics, no cojones?) that
        line in the sand isn’t being drawn. Yet. However, the above statement
        from TD doesn’t sound like surrender to me and they’re adding to the
        chorus that may just derail FATCA, if the US can be reasoned with on
        this. The uncertainty is killing me too.

    15. @Blaze

        From what I seen several places that won’t be any official
        communication out of Washington on FATCA until the of August at which
        point they should be able to provide more details of the
        “intergovernmental” negotiations.

        @bubblebustin

        I think Steven Mopsick is right to say that FATCA is ingenious in
        many ways. It doesn’t contradict any tax treaty commitments of the
        US(something Flaherty has admitted) and in theory gives institutions the
        right to opt in or out with no hard feelings on the part of the US
        government unlike some of other legislation coming from the likes of
        Carl Levin that gets into blacklisting and sanctioning countries and
        institutions. (My sense is Treasury say FATCA as preferable to the more
        heavy handed ideal of blacklisting and sanctioning). As to my academic
        vs political dichotomy FATCA is an academic tax vs Carl Levin’s Stop Tax
        Haven Abuse Act which is more political and punitive. However, from a
        political standpoint US Treasury has to take a strong line on FATCA to
        avoid giving ammunition to likes of Levin who want to start drawing up
        blacklists of “uncooperative” countries and things like that.

        Another example of the academic vs political dichotomy is you have
        seen a lot of former US Treasury and IRS officials who were involved in
        developing the 2008 Heart Act Exit Tax(which the US Treasury wanted to
        bring in way back in 1995 and is a copy of the Canadian Exit Tax see my
        posting from last night on Paul Martin’s 2000 press release) coming out
        critical of the Schumer Casey Ex-Patriot Act in favor of leaving the
        expatriation law as it is. I also from doing some research have found
        out the US Treasury and State Departments have tried to get the Reed
        Amendment repealed on several occasions but were blocked by political
        considerations(I found out that Bill Clinton and Larry Summers as US
        Treasury Secretary made a big push to scrap the Reed Amendment in his
        final year in office). So as much I don’t like the senior public service
        of the US Government on many occasions I do think over time they can be
        reasoned with. Its just Washington is much more “political” environment
        than Ottawa.

    16. @Blaze

        I do also strongly believe a solution will be worked out for people such as yourself that have a strong claim of relinquishment.

    17. @Tim: Thanks for your insight and
        what often seems to be inside information. Another Brocker and I are
        quite intrigued by your knowledge, comments, recommendations and what
        often seems to be insider information.

        I hope you’re right that something will be worked out for those of us
        who have a strong claim to relinquishment. For Tiger and me, we have
        obtained (Thanks to Schubert’s advice) copies of our citizenship oath,
        which then included renouncing any other citizenship. USA can say what
        they want about us being “US persons.” I don’t see how any Canadian
        bank could not accept that as absolute proof that we’re not “US
        persons”under FATCA.

        Have you ever told us your situation? Are you what the US deems to be a “US person?’