(used with permission)
Report 1 – Rogers TV – Some Candidates Debate – Nov. 13/13
Report 2 – St. Michael’s College Attempted Debate – Nov. 16/13
Report 3 – Toronto Centre “FATCA Centric” ALL Candidates – Nov. 18/13
Introduction – Equality of Canadian Citizenship – Are Some Canadians less equal than others?
The November 18 debate was the only Toronto Centre “All Candidates Debate“. It was/is the only debate to which each and every Toronto Centre candidate was invited. It was also a specific opportunity to discuss FATCA – The U.S. “Foreign Account Tax Compliance Act” – an extraterritorial law which the U.S. is trying to impose on Canada. It was also the only debate to focus on a topic of clear national importance. As a result it attracted the attention of organizations opposed to FATCA. It was attended by the CBC and attendees outside of Toronto Centre. It was not attended by the the majority of candidates (making one wonder why they are running for Parliament).
The point is that:
FATCA is a serious issue. It is an issue that affects all Canadians. It is an issue that affects Canada’s sovereignty. It is an issue that affects Canada’s economy. It affects GNP. Ultimately it will even affect Canada’s future immigration policy.
Yet of the eleven candidates on the ballot only five attended.
Who are the candidates and which candidates attended?
First those candidates who did not participate:
Chrystia Freeland – Liberal – Did not even respond to the invitation. (A November 18 article in MacLeans suggests that Ms. Freeland may be subject to FATCA).
Liberal MP Ted Hsu is asking the Harper government some hard questions about FATCA.
Geoff Pollock – Conservative – Did not even respond to the invitation. (At the November 13 Rogers Debate he confirmed his pride in representing the Conservative Party. His Conservative Party is currently negotiating with the United States, the conditions under which Canada will agree to imposing the U.S. FATCA law on Canadians.)
John Deverell – Green Party – Did not respond to the invitation – But did comment on a third party blog that he did not believe that FATCA was a significant issue in the Toronto Centre by-election. He says this even though the official position of Elizabeth May and the Green Party is to oppose FATCA.
Judi Falardeau – Libertarian – Did not respond to the invitation. (Surprising given the fact that the purpose of the Libertarian Party is to oppose government regulation and support human freedom.)
Kevin Clarke – Independent – Did not respond to the invitation and did not appear.
Second, those candidates who did participate
Bahman Yazdanfar – Independent – Has been on record as an opponent of FATCA. Has also recognized and acknowledged the “reign of terror and trauma” that FATCA and the IRS are inflicting on Canadians.
Leslie Bory – Independent – (Representing the unregistered Maple Party of Canada which is NOT affiliated with the anti-FATCA MapleSandbox.ca blog.)
John Turmel – Independent
Michael Nicula – Online Party of Canada
Dorian Baxter – Progressive Canadian Party of Canada – (The Progressive Canadian Party under the leadership of the Honourable Sinclair Stevens organized the only FATCA Forum in Canada which took place in December of 2012.)
What is FATCA anyway?
FATCA – The Foreign Account Tax Compliance is part of the U.S. Internal Revenue Code (See s. 1481) .
In it’s most simple terms FATCA:
– is a U.S. law that the U.S. is trying to impose on Canada (and other countries)
– that requires all Canadian banks to identify Canadian citizens who were born in the United States, whose parents may have been born in the United States or people who have lived in the United States
– report that information directly to the IRS so that the IRS can subject Canadians to taxation on their Canadian tax deferred TFSAs, RESPs, principal residences, income earned by their Canadian Controlled Private Corporations (even if not distributed) and more.
– in so doing extract money and assets created in Canada (with after tax money) and take that money to the United States for the use of the U.S. government.
Now, those who support FATCA may say argue that this characterization is unfair, an exaggeration and that “there must be more too it”.
I would say:
No, it’s not unfair. That’s exactly what it does.
Since, that’s what it does, it’s not an exaggeration.
Yes, there is more too it because it affects many Canadians who were not born in the U.S. In other words, the “there must be more” reveals that is far worse than just described.
For the purposes of this post, I am minimizing what FATCA is about. But, I want to keep it simple. FATCA is intended to do what I described and more.
Why would the Canadian banks even consider complying with a U.S. law called FATCA?
The answer is that if the Canadian banks do NOT do as the IRS says, than the IRS will withhold 30% of ALL PAYMENTS IN U.S. DOLLARS TO THAT BANK!!!!!!!!!!!! REGARDLESS OF THE SOURCE, REGARDLESS OF THE REASON! THIS IS OF GREAT CONCERN TO CANADA’S BANKS.
Therefore, it is shocking that a majority of Toronto Centre Candidates and NONE of the main party candidates bothered to attend this meeting! Simply incredible!
Although the main party candidates did NOT bother to appear CBC Radio – “The World at 6″ DID appear. They included the comments of two attendees in the following CBC audio clip which begins at at approximately the 14:30 mark and continues to about the 18:00 minute mark.
As one commenter noted – making reference to Gwen (the woman interviewed by CBC who has lived in Canada since she was five and has no ties to the United States):
The sob in Gwen’s voice will get to a lot of people. It got to me. I’ve been close to sobbing but I’m still too mad.
(If you continue listening after the FATCA clip ends, it moves to a discussion of people trying to escape the North African nation of Eritrea (right on cue). Eritrea and the United States are the only two countries in the world that attempt to impose taxation based on citizenship.) Incredibly, the U.S. criticizes Eritrea for imposing citizenship-based taxation on its citizens abroad, while retaining the right to do exactly the same thing!
Even if Toronto Centre candidates have not, CBC has taken an interest in Canada. In fact as recently as last week, McGill Law Professor Allison Christians and a former U.S. citizen (who was forced to relinquish her citizenship because of similar (to Gwen) FATCA related fears) were interviewed.
On the level of human interest, note that the woman in Canada renounced her U.S. citizenship to protect her marriage and Canadian family! Even U.S. tax lawyer, Robert Wood notes that renunciations of U.S. citizenship are soaring!
Where are the Toronto Centre Candidates?
What did the candidates who attended say about FATCA?
In fairness, FATCA is a complex topic that affects many people, many things, in many ways. Therefore, it is impossible to hold them to a high standard of technical knowledge. Nevertheless, the debate unfolded by identifying various aspects to this issue. These aspects included:
The question of protecting Canada. Who makes laws for Canadians? Are Canadians subject to U.S. laws?
Human freedom vs. Security
It’s interesting that the impact of FATCA has been recognized to part of the U.S. insatiable demand for data and the move by the U.S. to end privacy of any kind. Recent events have revealed the extent of U.S. spying on other countries. Spying requires effort on the part of the U.S. government. FATCA is really a U.S. initiative to create a “Stasi Like State” where the countries banks will spy on its citizens and turn that information over to the United States.
Recent NSA spying allegations aside, privacy has always been protected for U.S. citizens. Yet FATCA affords no financial privacy. It requires banks to report back to the IRS account numbers, names, addresses, balances, and transactions. Why should foreign banks be expected to trust U.S. citizens when even their own government does not extend the same faith? And imagine if this disclosure requirement was applied by other nations. Would America’s banks really be comfortable reporting back to Mexico, China, or Russia the financial portfolios of the 11 million immigrants living in the U.S.?
My impression was that the candidates were divided into three groups:
Those focusing on protecting the Canadian banks – Those who thought that FATCA could not be stopped and that co-operation with the IRS was necessary to protect the Canadian banks. – Michael Nicula was of the view that FATCA could not be stopped. He identified that the concerns of the banks. How would non-compliance with FATCA affect the Canadian banks.
Those focusing on Canadian citizens – Those who thought that FATCA has no place in a free and democratic Canada and that all efforts should be made to stop it. – Dorian Baxter and Bahman Yazdanfar were the strongest opponents of FATCA. Dorian Baxter characterized FATCA as an attack on Canada similar to the War of 1812. Bahman Yazdanfar characterized FATACA as an assault on freedom everywhere. Baxter and Yazdanfar were focused on the rights of people.
Those focusing primarily on Canadian sovereignty – Leslie Bory and Dorian Baxter were the leaders in viewing FATCA as an assault on Canada’s sovereignty. It’s like 1812 all over again. When it comes to Canada:
“It’s important to stand on guard for thee!”
As one commenter noted:
You are flogging a dead horse. You are arguing pragmatism, and we are arguing principle. I appreciate your take on this and your points are made respectfully. You do concede that FATCA is a bad law — everyone outside the U.S. seems to concede that. The question is, at what point do you confront the bully? We think this is an appropriate line in the sand; if the world caves on this it might as well just accept that the “world” government is run out of Washington D.C.
And as far as directing it at the wrong players — there are no wrong players. I believe that trying to raise awareness of this issue with the people who are hell-bent on implementing FATCA will, if nothing else, remind them that their own customers are mightily PO’d at what they are doing. Before this little demo in Toronto, most of those financial types had given zero thought to the effects of FATCA compliance on their clients. Now they’ve been educated.
The Banks vs. The People
The candidates identified that a large part of the debate centers around:
1. The Role of the banks in a FATCA rollout in Canada
This is a fascinating discussion. Those interested might read a post and the comments at the Isaac Brock Society (which recently protested the role that Canada’s banks has in implementing FATCA). The Canadian banks have resigned themselves to FATCA are encouraging the Government of Canada to surrender – in the form of an IGA – to the United States.
2. The Rights of the Canadian Citizens vs. The Rights of the Banks
What about rights? Is FATCA a situation where the rights of banks shareholders should get precedence over the rights of Canadian citizens? Does it matter that FATCA will affect only 10% (a minority) of Canada’s population? Interesting question. Is it okay to “offer 10% of Canada’s population as a tribute to the U.S.?)
Interesting question. Doesn’t democracy mean that the majority should get their way? Doesn’t democracy mean a majority can impose its will on the minority? Isn’t it therefore “democratic” to hurt a minority to protect the majority? There is a fascinating thread of comments on this issue at the Isaac Brock Society beginning here.
We are introduced to one: J.E. Gutirrez (a probably representative of a pro-FATCA group. Who else would be able to spend three days writing comments supporting FATCA on a third party blog?).
He/she is trying to make the case that the Canadian banks have no choice in obeying U.S. law and the interests of the banks must be protected. As the discussion unfolds (over a couple of days) we see the question becoming:
When the interests of the banks collide with the interests of the people, which set of rights should be given the priority? A thoughtful comment comes from a poster named Badger who writes:
- Anti-FATCA movement gains momentum – Time to protest Canadian banks (torontocentredebates.wordpress.com)
- @TorontoCentre Debates ALL #TorCen candidates to #FATCA Centric All Candidates – November 18/13 (torontocentredebates.wordpress.com)
- @IsaacBrockSoc invites some #TorCen candidates to #FATCA protest (torontocentredebates.wordpress.com)
- Thoughts on @RogersTV #TorCen @TorontoCentre Candidates Debate (torontocentredebates.wordpress.com)
- Nov. 18 @TorontoCentre All #TorCen Candidates #FATCA debate referenced in Caymans (torontocentredebates.wordpress.com)
- McGill Law Prof Allison Chrstians discusses #FATCA on CBC The Current – Nov. 13/13 (torontocentredebates.wordpress.com)
- #TorCen Candidates need to understand what #FATCA implies for privacy rights in Canada (torontocentredebates.wordpress.com)
- All #TorCen candidates have been invited to the ONLY ALL Candidates @TorontoCentre debate on November 18, 2012 (torontocentredebates.wordpress.com)
- Canada’s Charter of Rights – Political Debates and #TorCen Debates (torontocentredebates.wordpress.com)