The Federal Conservatives just announced that they are dropping their plans for a big “E-Snooping” Bill. More below:
Harper government kills controversial Internet surveillance bill
We’ve listened to the concerns of Canadians,” Justice Minister Rob Nicholson told reporters outside the House of Commons on Monday.
He said that “we will not be proceeding with Bill C-30. And any attempts to modernize the criminal code will not contain …warrantless mandatory disclosure of basic subscriber information or the requirement for telecommunications service providers to build intercept capability within their systems.”
Instead, the government has carved out a sliver of the bill to ensure warrantless wiretaps during emergencies remain legal.
“We are immensely relieved,” said Chantal Bernier, the federal assistant privacy commissioner. She said the government’s reversal “is the result of the recognition of the fundamental right to privacy of Canadians, and also of their attachment to it.”
Bill C-30 caused a furor when it was introduced a year ago this week. The legislation would have permitted police and other government officials to compel Internet service providers to disclose identifying information linked to clients’ ISP addresses without a warrant.
So how will they justify a FATCA IGA. Or is FATCA dead now too?
It could be dead if only there was more media attention. One thing I have noted about Canadians is that law or regs that even remotely smell of American fascist police state are rejected quite forcefully by the people in general.
@a,
You would think that the whole idea of interfering with our money – our legal, post-tax, made-in-Canada savings, would be something significant enough to trigger that strong automatic anti-US gag reflex and have the Canadian media up in arms.
I think it would catch on and get Canadians riled if it got more coverage and was explained properly, particularly if it was emphasized that the US has arrogantly made its definition of a taxable-by-the-US-person so broad that many non-US individuals here can easily become ensnared. For instance, all those snowbirds, and those buying US retirement properties, etc. – if they stay too long in Florida and Arizona. The anti-US sentiment gets turned against duals here, and anyone deemed American in Canada. And are we to believe that those of US origin, or who inherited US status from a parent live in isolation? There have to be lots and lots of Canadian households with a US member.
And I think that is why there is complete and utter official silence. The feds and others must think that there could be significant public opposition to FATCA, or they wouldn’t bother to keep it so quiet. They know this is potentially explosive if truly understood. And it explains why no official public stand against FATCA from the official opposition parties either. Otherwise, why only the Greens taking a loud and principled party stance? There are individuals from the parties, ex. Liberals, like Ralph Goodale, and lukewarm letters from Bob Rae, but nothing recent, and nothing on the federal party websites. Strong statements from NDP in BC particularly, on their individual websites in the fall of 2011 particularly, but the federal leader – Mulcair, who attended parliamentary committee hearings on Canadian tax evasion issues, heard Scott Michel of Caplin and Drysdale who was invited to speak to the committee – so he has a bit more background about what the US has been doing – but it doesn’t translate into a formal stance. Why not? Are the federal NDP and federal Liberals just too preoccupied with other issues, or do they just not want to take the US on? You really have to wonder what is up. Is it because they are Obama fans? If so, they should remember that naked US self interest is timeless and a constant – just insert syrupy words about ‘close relationships’ and ‘friends and neighbours’ whenever expedient.
It’s very ironic. I always warned Canadians around me about letting the US eat up Canadian natural resources, and Canadian sovereignty, even though I was born in the US. But strangely, for all the anti-American stuff I heard while growing up here, it seems that there isn’t enough organized mass public opposition every time a Canadian politician like Harper gives away another piece of Canadian autonomy – like the ongoing Border security initiative – with drones patrolling the shared border.
FATCA may shift Canadian society and immigration/emigration patterns. No longer will there be those Canadian families whose children or other members consider so easily, going to the US to study or work, because they suddenly then have a problem re estates, joint/family banking, Canadian registered accounts, etc. if they decide to stay longer. US status will be recognized for the burden that the IRS Treasury and Congress have made it, instead of an advantage.
Who can do any normal financial or future planning in any family here with a US member? Whether that US member is a US resident, or a Canadian one – it affects everyone else with RESPs, financial planning, future planning for estates, disability, etc.
There are so many Canadian families who would be shocked if they really knew what this meant for them. I can easily think of about 20 households with one US spouse here in Canada, or adult children who’ve gone to the US to study or work, or married an American, but I don’t think anyone is aware of the situation, and it is so draconian and so Orwellian, that those I have told can’t quite believe it could really be true.
The double taxation spectre is bad enough, but it is the FBAR, FATCA jeopardy and all the prohibitions on all our normal savings options that are the most insane. And that Canadian politicians are just letting it happen – that betrayal is the hardest part of all.
I think that the wave of anti-US sentiment will be huge if a FATCA IGA gets signed here, and the true ramifications become apparent, but that will be too late. And I think that when the true scale of the impact on the > 1,000,000. households in Canada with a US member is revealed, it will change banking and investing here significantly. The banks may think they can just get on with making money, and having all Canadians foot the compliance bill, but that is > 1,000,000. or 1/32 that will NOT be buying or investing in the most popular investments – NO Canadian mutual funds, NO RESPs, NO TFSAs, NO RDSPs, NO PRPPs (which the banks and investment houses desperately want to sell to us). Nothing that could be a ‘foreign trust’ or a PFIC, or anything else. So, how will they sell those products to households where the whole family has to quarantine their accounts so as not to spread the FBAR and FATCA taint and jeopardy? Already, it significantly distorts our banking and personal financial arrangements where even just one of us has the US burden. It leaves spouses unable to legally and sensibly plan for emergencies – unless they want the possibility of having ALL the household accounts potentially subjected to the rigors of the FBAR, and FATCA reporting, and the attendant penalties for even the smallest accidental errors – levied per account. And households are hampered and burdened if they want to operate businesses, or take jobs with signatory duties, so it skews career choices, employment planning and work. It skews finances between spouses. It skews communities – because we can’t handle volunteer accounts for fundraising. We can’t take on financial responsibilities for anyone else – even in contingency planning.
How are the Canadian banks going to justify to their shareholders that despite an IGA, they will still have to pay for ongoing compliance and reporting – whether it is to the IRS directly, or to the CRA. Those costs will be forever – and have to be passed to all account holders. And all taxpayers will pay for the Canadian government to comply – forever.
God forbid that you have a situation where you need to sell your Canadian house as a senior and it has gone up in value – inflated over time- and then you’ve got US capital gains tax to pay – and it eats away at your home-as-nest-egg money for retirement or longterm care. Or to pass to your non-US kids. Or someone needs to be named an executor, or co-sign on an account, but won’t/can’t take on the liability.
What kind of Canadian government would bring all that down on Canadian society – for all time? What are they trading? It’s got to be something like oil and the pipeline, or some other concession that the Harper government really wants. Most likely to be oil in Alberta, or access to the Arctic for drilling, etc. It’s going to be some natural resource for sure.
We are economic hostages held in bondage by the US.
consider sending the Green Party link to all media you know…
http://www.greenparty.ca/statement/2013-01-28/backgrounder-canada-and-fatca
Badger, I agree with your assessment that the USP rather than citizen label is part of a slow creep that will eventually ensnare more and more Canadians, whether they have an actual USP in their household or not, but getting Canadians to see this has proved very difficult.
I know many ppl who have US spouses, obtained SS numbers, greencards or citizenship while working in the US and who own property or winter down there, and they are all, for the most, not willing to believe that they currently are or someday will be debt serfs for Uncle Sam.
In spite of the latent, and sometimes not so, anti-Americanism that runs through Canadian culture, Canadians just don’t think that the US can come after their wealth b/c Canadian law and govt prevents it. Until it starts happening on a wider spread basis that the media can’t ignore, I don’t know how to remedy this.
@badger, you’re right, but we have a twofold problem: (1) unlike the implications of e-snooping, US extra-territorial tax policies are so complicated that most people won’t take the time to inform themselves about them, and (2) most people on both sides of the Canada-US border don’t think those policies affect them anyway. How can we raise awareness of the collateral damage caused by US extra-territorial tax policies in general?
With other kinds of collateral damage, it’s easier to raise awareness. Drone strikes that kill civilians and make more enemies in the process are fairly easy to understand. Likewise, people can understand how intrusive internet surveillance, ostensibly aimed at child pornographers, could be misused. But taxes? Most people’s eyes glaze over at the mention, and they don’t want to hear about it or deal with it unless they think it affects them directly.
The efforts here at IBS to raise awareness of the implications of US tax policies are commendable, but they also show just how very hard it is to do. Only continued pressure on politicians, plus whatever news we can generate about large numbers of US expatriates “voting with our feet” by shedding US nationality, has much chance of changing things. But sadly, as you have so explained so well, most Canadian politicians don’t want to raise awareness of the issue. So I’m not optimistic that FATCA and the like will be as easy to stop as e-snooping..
In my never-ending daily quest to discover the answer for myself to “Why Isn’t FATCA a huge story relayed to ALL Canadians by the Canadian media?” I gathered some thoughts I fully agree with that were collected here, including this one from you, badger (and from AnonAnon and “a”*). I sent these on to Kevin Shoom (to add to my other IGA comment submissions) — Collection of thoughts on why Canadian government and media is silent on FATCA and Negotiations for Signing an Intergovernmental Agreement with the US…
A couple of more thoughts:
In the context of the Canadian political and legal system there is nothing to push FATCA onto the radar screen. No agreement has yet been signed by Canada, no legislation introduced to change current law, no agreement ratified. All of the previous are fairly extensive steps to take none of which can be done that quickly. At a bare minimum any treaty has to go through a 21 parliament sitting days cooling off period to take effect. As of today based on the current Parliament calendar that takes us to March 26th which is a long ways away in politics. May 28th give or take though is an important drop dead date after that nothing can take effect at the earliest until the fall.
Tim, I hadn’t thought about that, but there are rules and deadlines. Given the rush the USG is in to bag some IGA participants, could Canada’s strategy be to run out clocks? We’ve discussed in other threads that other countries might be waiting on Canada to lead with a firm “no” but sometimes, silence and runaround is an answer too.
It is difficult to push the overall wrongness on FATCA for Canadians when its been largely dealt with behind doors in Ottawa.
Tim,
Thanks for your footnote to the thoughts on why FATCA is not a significant Canadian media story.
I’ll try to be more patient in my understanding of the Canadian political and legal process and put a little more hope into my black thoughts of all of us USPs being sacrifical lambs / collateral damage of a Canadian buy-in to FATCA.