Like most other Canadians, I was outraged to learn that the Royal Bank of Canada has been laying off IT workers and replacing them with temporary foreign workers, with the intention of outsourcing their IT functions overseas. I was ever more outraged to learn in today’s news that RBC is not unique among Canadian chartered banks in doing this; several other members of the Canadian Bankers Association also stand accused in the media of the same practice, by some laid-off and even current IT workers from several banks other than RBC (specifically, CIBC, TD, Scotiabank and BMO).
Am I the only person who is wondering whether there is a connection between the outsourcing of the banks’ IT functions to less-expensive overseas contract workers, and the indications we hear of the banks’ preparations to comply with FATCA (which will entail some extensive and expensive IT systems work in these banks)? Outsourcing all that IT work could help reduce the costs to the banks of rolling over and complying with IRS invasion of our citizens’ financial accounts.
Is it the case that not only are the banks preparing to throw Section 15 of Canada’s Charter of Rights and Freedoms under the bus, as well as the account information on thousands upon thousands of Canadian citizens’ financial information to the tax agency of a foreign country, but they also are laying off highly-educated and highly-trained Canadian IT workers to boot in order to achieve this, even requiring those workers to train their under- or un-trained replacements in Canada before those workers go back to where they came from (and where Canadian privacy, banking and Charter rights don’t apply as those workers will be on foreign soil)?
And what will the outsourcing of IT functions overseas do to what remains of privacy, secrecy and security of Canadians’ financial information – of ALL Canadians, not only those of US origin?
I am writing today to my MP to ask these questions. I urge you all to do likewise. I would like some clear and believable answers. (No, I am not writing to CBA. I want an answer I can believe, and I think that Question Period in the House of Commons, followed as appropriate by a federal government investigation to get answers, is the only way that’s going to happen. CBA is not going to have any credibility with me on this one. I believe what fellow Canadian workers are telling CBC, not the insipid denial by that RBC official.)
Over past months, some of us have wondered how to get our fellow (non-US-origin) Canadians interested and upset about FATCA. If my suspicions about the answers to the above questions are correct, I think this could be a real doozy of a way to raise public awareness and concern about FATCA, US violation of our sovereignty, and possible complicity in same by our financial institutions.
IRS Plans to Reduce Corporate Audits…..The Internal Revenue Service is planning an 18 percent reduction in its audits of large businesses in the current fiscal year, according to a new report.The IRS document also projects a 14 percent drop for the year ending September 30 in the available time for the specialized revenue agents required to conduct such audits compared to two years ago.Other data from the IRS indicates a smaller decline in the audit rate for individual taxpayers. Tax audit rates for individual taxpayers fell by 5.3 percent in fiscal 2012, but because the number of returns filed had increased, the chances of audits fell at an even faster pace, by 7 percent.
http://www.accountingtoday.com/news/IRS-Plans-Reduce-Corporate-Audits-66304-1.html?ET=webcpa:e6939:430732a:&st=email
Well, well OVDI/P and VD finally show its impact 🙂
Chasing Minnows around the globe is just more fun than going after transfer pricing within GOOG and AAPL – you got to love it !
@swisspinoy… this one is for you : -)
Little did Zurich-based lawyer Peter Hafter imagine how things would turn out when he ordered a $2,700 offshore kit to create a front company in the Cook Islands on September 13, 1993. Twenty years on from that day, the fax he sent, the ensuing emails and all his business correspondence with Portcullis TrustNet in Rarotonga, the largest island in the archipelago, have been copied and passed on to journalists around the world.
http://www.icij.org/offshore/swiss-lawyers-who-help-europes-richest-families-park-their-wealth-offshore
@Mike Tarrantes, wow, interesting stuff! What bothers me about this, though, is that my name isn’t written anywhere. I’d love it if the press mentioned me having $1000 million stashed away somewhere in some secret account, that I could use to pay $999 million in taxes and penalties, as long as I could keep the remainder!
On the outsourcing of IT jobs by Canadian banks, it makes a difference whether the outsourcing is:
a. Data processing, or
b. Programming, systems development, etc.
Both are bad, but a. is worse than b., as data processing entails personal information and could be in the hands of a large number of low paid workers, with temptations to steal information. The second possibility is bad because it is an opportunity for an outsider to build a tunnel into the bank’s systems, but probably represents less of a risk.
And the cost to our big banks for FATCA? Can the banks not look before leaping and thinking no one will notice how they’re saving money for their bottom line?
Indian firm ‘indentures’ bank workers while making millions — Canadian bank insiders say outsourcing savings not worth the cost
“It’s the elephant in the room that’s finally being talked about,” he said, adding he was upset to learn RBC paid iGATE more than $100 million in 2012, according to U.S. securities filings.
Meanwhile, in response to Go Public’s story and the ensuing reaction about iGATE outsourcing, RBC CEO Gord Nixon is now apologizing to staff and customers.