If you have not already done so, please take some time to email or write the Canadian Finance Department with your comments regarding the signed Information Exchange Agreement between Canada and the United States. (Due date now past: thanks to all who participated).
http://www.fin.gc.ca/treaties-conventions/notices/fatca-eng.asp
Tax Policy Branch
Department of Finance
140 O’Connor Street
Ottawa, Ontario
K1A 0G5
RE: Information Exchange Agreement Signed Between Canada and the United States
COMMENT ON THE LEGISLATIVE PROPOSAL
I am writing to express my concerns over the Intergovernmental Agreement (IGA) announced by our Minister of Finance on Feb. 5, which would grant the United States extra-territorial jurisdiction over Canadian citizens and residents in its implementation of the Foreign Account Tax Compliance Act (FATCA).
My specific objections:
No evidence of due process. If there were lengthy negotiations, as claimed by Minister Flaherty, MP John Weston and others, it is not evident in the text. Despite the fact the Government of Canada has taken a very public stand against FATCA, the Ministers, in the end, accepted a template agreement with only minor exemptions that can be revoked by the U.S. at will. Even worse, all of this so-called negotiating is occurring under threat of heavy sanctions by the U.S. on our financial institutions. All of these things considered, how can Canadians trust in the good faith of the Ministers, let alone the legitimacy of this entire process?
The IGA allows financial institutions in Canada to discriminate against citizens and residents based on their place of birth. This treads rather carelessly on rights guaranteed by the Charter. No doubt there will be legal challenges and even if the Government of Canada prevails it will be costly for taxpayers.
The IGA threatens the privacy of Canadians. Canadians considered to be “U.S. persons” will have their personal data collected by banks and handed over to the Internal Revenue Service by the CRA. There are no provisions to prevent this data from being shared with other U.S. agencies, including the National Security Agency (NSA).
Minister Flaherty himself expressed concerns about this when he wrote “[FATCA] … would raise significant privacy concerns for Canadians.” See Jim Flaherty’s Letter on FATCA (September, 2011).
The IGA enables a system of citizenship-based taxation that is widely seen as unjust and heavy-handed. Only the U.S. and the dictatorship Eritrea tax its citizens abroad.
The IGA will take money out of Canada. It makes no economic sense to allow the U.S. government to syphon money out of the country in the form of exorbitant penalties imposed upon law-abiding Canadians and residents, many of whom weren’t aware of their tax obligation in the first place.
The IGA will do little to catch tax evaders. As Minister Flaherty himself has written, “Canada is not a tax haven.” It will, however, hurt a whole lot of good, hard-working, law-abiding people.
Canada must say no to FATCA Canada is in a unique power position on this issue. As opposition to FATCA grows in the U.S., a flat-out refusal from its friendliest partner could send the legislation off the rails for good.
I implore all decision makers on this issue to stand up to the bully. The answer must be no and it must be in no uncertain terms. It will require strong leadership and firm resolve. I wonder: does this government have what it takes?
@W… Awesome letter!
MuzzledNoMore –
I like the care of your reading, and the content of the other item you posted today. Nevertheless, I read OR differently. Start with the related action fails to provide on request. You seem to read the OR as “any particular one” of the three specified numbers. I read the OR as “any and/or all.” I’m not a lawyer. Are you? Even then, the ambiguity might become an unresolved matter of a yet nonexistent court decision. Like so much of what so many can only remain uncertain about.
This is off topic for this post, but I wasn’t sure where else to put this comment. Our friend David Lesperance seems to think we are wasting our time with a Charter Challenge.
See his response below to a comment by CanadianDeemedUSTaxSerf at: http://www.arbitragemagazine.com/features/facta-is-the-u-s-cracking-down-on-tax-evasion-or-is-it-an-invasion-of-privacy-many-canadians-are-being-forced-to-report-u-s-earnings-795/
CanadianDeemedUSTaxSerf says:
The FATCA (not FA C TA) IGA (Intergovernmental Agreement) which the Harper government signed off on – to be implemented in Canada is being challenged by a group of Canadians on Charter grounds http://isaacbrocksociety.ca/20…
David S Lesperance says:
The problem is that such a challenge will not be reached by and settled by the Supreme Court of Canada until years after the FATCA implementation date. Therefore even if successful will be a pyrrhic victory at best.
@All, I learned a new phrase today thanks to D. Lesperance. From Wikipedia, a Pyrrhic victory is a victory with such a devastating cost that it is tantamount to defeat. Someone who wins a Pyrrhic victory has been victorious in some way; however, the heavy toll negates any sense of achievement or profit (another term for this would be “hollow victory”, or “a ruinous situation”).[1]
sent in my comments to Finance. The Lesperance website (above) has a widget to determine if you are a US taxpayer. Not exactly accurate, as it does not include relinquishment, but for snow birds and children of US born parents it seems to guide to the correct answer.
“grouchyandmad says
March 9, 2014 at 10:05 pm
sent in my comments to Finance. The Lesperance website (above) has a widget to determine if you are a US taxpayer. Not exactly accurate, as it does not include relinquishment, but for snow birds and children of US born parents it seems to guide to the correct answer.”
From Lesprence who information is wrong
“One does not lose Resident Alien Status when their alien registration card expires. Therefore there are many people who have secured US resident alien status at one point in their lives who mistakenly believe that they lost this status and their US tax liability when they moved out of the US;”
This is not the way Canadian government is looking at it.
even for people with an unexpired Green Card
” I hold a U.S. green card. How does this affect my tax residency?
If you are a green card holder (that is, a lawful permanent resident of the U.S.), the U.S. considers you to be a U.S. resident.
However, if you are a resident of Canada for tax purposes and do not hold U.S. citizenship, you should not identify yourself as a U.S. person to your Canadian financial institution.”
http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/ndvdls-eng.html
A lot of the stuff posted is nonsense and the 1995 USA Canada tax treaty is a hell a lot worse. The CRA will collect from Canadian residents. Our FATCA is massively different then in Europe where Bank accounts are being shut down. They do not even have the 30% withholding on US property and all US citizen need to do is get a CLN and not be tax compliant to USA (exit taxes, form
88428854).“Does the agreement require Canadian financial institutions to report to the CRA on any individuals who were told that they relinquished their U.S. citizenship when they became Canadian citizens?
The agreement does not require Canadian financial institutions to report on any individuals who have relinquished their U.S. citizenship and are not residents of the U.S.
WhiteKat if what he is saying is true then we have wasted our money UNLESS we can get a court injunction to stop its implementation until the court case.. Someone here needs to get a ruling from Joe on that post.
Frankly I’m sick and tired of so called “due process” and all the fucking bullshit our legal system is. Almost NONE of our leaders deserve to be where they are. Are Canadians fucking stupid to vote in any election? I think ANYONE who votes in this country is STUPID. This is the 51st State and I’m not voting in any American elections for any American (Canadian) candidates such as Cheeseburger Man, Son of Middle Finger Man or Growly Bear
David Lesprence probably has a point about the length of time for a charter challenge. But I think its definitely worth going for provided the legal opinion is favorable.
Having said that, anyone contemplating getting a CLN should not wait to see what happens with the charter challenge.
@ChearsBigEars, and others scared of Leserance’s comments,
Pay little (if any ) attention to Lesperance’s fear mongering. He has commented several times at Brock, and at articles throughout the internet. His message never changes – resistance is futile.
@JoeBlow, I agree that the Charter Challenge will take time, but a CLN is not the only way out of this mess for everyone. Some ‘US persons’ are quite willing to ride out the storm by structuring their financial lives in such a way that a CLN will not be required during the time it takes for the Charter Challenge to succeed. At some point, FATCA WILL FAIL, whether due to the Charter Challenge or not. People should not panic, and assume that a CLN is the ONLY way to get through this.
and keep in mind that Lesprence is a lawyer in a firm that needs high net worth clients and #FATCA is feeding them right to his doorstep. Even if he thinks FATCA is unfair he is not going to say anything that would support those invested in overturning FATCA. I understand his caution about a charter challenge taking time, but we have hired our own lawyer and need to wait to see what recommendations he gives.
@GeorgeIII thanks for the CRA link and information. Appreciated.
Actions and challenges can have multiple functions in and of themselves – whether ultimately successful or not. Signal, message, flare, volley, call to rally round the flag.
Not sure if this is the right thread, but “Perspective Group” a law firm in Ottawa posted this on twitter today – http://business.financialpost.com/2014/03/10/canadas-draft-legislation-undermines-fatca-agreement-with-u-s/
It says Canada’s interpretations of the IGA could void the agreement and put Canadian Banks back on the hook.
The John Richardson and Stephen Kish submission is really awesome. I haven’t quite finished reading it but it doesn’t seem to have missed a thing and it doesn’t mince words either. Sorry I can’t post the pdf but you can get to it here:
http://citizenshipsolutions.ca/2014/03/10/richardson-kish-comments-on-canada-fatca-iga-submitted-to-departement-of-finance/
BTW, Mr. Em e-mailed a submission just in time today too. He didn’t mince words either. (I sent mine mid February.)
Allison Christians and Arthur Cockfield also have a joint submission to Finance. I haven’t had time to read it yet, but here it is.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2407264
There was some discussion about Professor Cockfield in another thread today, but I’m getting overwhelmed and I don’t remember which one.
Allison also has information on her own blog.
http://taxpol.blogspot.ca/2014/03/christians-cockfield-submission-to.html
And the submission (69 pages) ended with the James Jatras opinion piece from the Toronto Star. Perfect! John and Stephen invite comments on their submission. I think I will simply say, A+. Now on to the Christians and Cockfield submission. Thanks for posting that, Blaze. This has been a submission filled day to be sure. Petros also put together a great one. The other discussion about Prof. Cockfield might have been regarding the report he is doing for the Privacy Commissioner, unless I missed something somewhere else (entirely possible).
http://isaacbrocksociety.ca/2014/03/08/you-can-send-in-your-comments-on-the-legal-opinion-and-we-will-forward-these-to-the-constitutional-lawyer/
@blaze
Prof Cockfield is speaking as part of a panel on Privacy and Financial Information at the CCLA Pathways to Privacy symposium March 20 and 21. His panel is at 3:15 March 21
http://ccla.org/pathways2privacy/
Anyone can register to attend the event.
So many awesome submissions today! Thank all of you!!
As a permanent resident of Canada with a Canadian born wife, I am concerned that this legislation will create a two tiered citizenship in which one class of Canadian citizens will be treated differently than the other class of Canadian citizens. One class will in practice have greater privacy rights than the other class.
As someone ‘tainted’ with US personhood and in joint ownership of bank accounts with a Canadian citizen wife, where does this leave her? Is she guilty of being married to a US person and therefore not deserving of the same privacy right that other Canadians enjoy?
In addition to this discrimination and the ‘national origin’ discrimination that will necessarily happen when bankers start asking clients if they are American Citizens, there are other ambiguities in the legislation that concern me as well.
For example, who defines US Person? Must the United States have the last and final say in who is a US Person and the proof that establishes whether or not they meet that definition?
It seems imperative to me, that Canada must be able to determine these matters according to Canadian norms and laws, not US norms and laws. If Canada believes that expatriation is a human right, and is determined by the person himself or herself, and is not something granted by a government, then there must be a way to verify whether or not someone has renounced US citizenship that is independent of the US government.
What if the US doesn’t recognize people’s wishes to renounce? What if they keep expanding the definition of US personhood? What if they stop granting some people their official certificate of loss of citizenship, say for political reasons? Will Canada recognize this right to renounce and the proper procedures to do it independently of the US government?
Where does Canada draw a line in the sand and refuse to go by whatever the US wants and orders? It is disturbing that Canada is allowing this legislation to pass, for it seems to be a big shove off the slippery slope of letting the US strip Canada of its autonomy within its own borders.
If Canada allows this legislation for no other reason that the US orders it under threats; it has in principle ceded its proper authority and duty to care for all its citizens. What then can anyone hope or expect with regard to further demands by the US in this area?
It seems the US is in complete control of this process; they are in the drivers seat. I am no legal scholar or tax expert; but it seems to me that this move has opened a can of legal worms and sets a very disturbing and troubling precedent, one that doesn’t bode well for the future.
For God’s sake, if this legislation must be passed; have the courage to draw a line in the sand and keep control of the definition of ‘US Person’ and keep the authority of Canadian courts to ensure due process for your citizens and future citizens!
Thank you.
sorry for posting this twice I incorrectly posted it the 1st time
RE: Intergovernmental Agreement for the Enhanced Exchange of Tax Information under the Canada-U.S. Tax Convention
I hope that this letter reaches the right department in the Ministry of Finance. I find it strange that no fax number was included in the notice as faxes are routinely used by most businesses and government offices.
I am the Canadian born wife of a Canadian citizen of US origin. I am writing this letter to share the issues and problems that this intergovernmental agreement with the US will have on my life as a Canadian born citizen who is married to a person of US origin.
When I married my husband over thirty years ago I made a vow that I would honour him in sickness and in health, now I find out that I am also, in effect, married to IRS. Why? Because my husband and I have shared joint bank accounts since we were married. These are the same bank accounts that the US wants information and access to so they can penalize us under FUBAR and to collect US taxes. There is no protection in this IGA for me as a Canadian citizen or my husband as a Canadian citizen of US origin.
As a Canadian born citizen where are my personal privacy rights? There is no protection of my rights in the proposed legislation. We have every right to have joint bank accounts but no right to privacy. I will become an `FBAR` wife. Which means any amount over $10,000 in any joint account I share with my husband will be subject to severe penalties if not reported to the US government. These penalties could include up to 50% of the highest balance in the account. These penalties will be levied on money lawfully earned and taxed in Canada. How does the CRA intend to separate reporting of money held in joint accounts please tell us.
Why should my private financial information in the joint bank accounts I share with my husband allowed to be accessed and sent to the IRS? Why should a foreign government have access to my private financial information that is protected by Canada’s privacy laws and Charter of Rights and Freedoms?
Are you aware that I am also considered to be an alien by the US government? I am an alien because that is how the IRS views me, as an alien who married someone born in the USA. As such I will always be unfairly treated by the IRS because according to the US tax code I do not have the same tax privileges and deductions that a US born spouse is entitled to in the IRS tax codes. There is no equality for “alien” wives in the US tax code. This is because the US tax codes singles out anything (and anyone) that is foreign for penalties.
In effect I am `wedded` to the IRS, forever, because even if I divorce my husband if he transfers property or money to me in the divorce agreement the IRS considers this a deemed disposition of property and US taxes must be filed. This would greatly reduce the amount of money and or property I am entitled to under Canadians divorce laws thus affecting the quality and standard of my life.
This IGA exempts RIF’s RRSP, LIF’s, TFSA accounts from the FATCA reporting requirements but it does not exempt them from the 30% withholding taxation by the IRS. Please pass enabling legislation and change the tax code to exempt our Canadian RIF’s, LIF’s, RESP’s, TFSA’s and RRSP’s from being taxed by the US. The Canadian government put these tax deferred plans in place in order to encourage responsible financial planning. If this enabling legislation is passed many seniors may find themselves living in poverty because they must first pay the CRA on their withdrawals and will also be subject to a 30% US tax assessment on the same withdrawals. You must be aware that deferred income from RRSP’s etc. does not benefit from the same tax exemptions as earned income under the current US-Canada Tax agreements. So a senior will find themselves doubly taxed, thereby paying out combined US plus Canadian taxes of over 50% on any withdrawals from their RIIF, RLIF or their RRSP’s. How many seniors will be impacted left to rely on the Canadian government to take care of them because these seniors no longer have the financial means to look after themselves?
Please let all Canadians know if it is your intention to allow the flow of pension funds from Canadian Citizens of US origin out of Canada into the US. I think they need to know because they will be paying through their taxes the cost of looking after the seniors who can`t afford to rent or own a home and need subsidized housing.
These same seniors will not be receiving any benefits from the US in return for amounts to the US confiscation of 30% of their pension funds – for instance they cannot receive Medicare or Obama care since they do not live in the USA.
Canada took steps to protect Canadians of Eritrean origin from double taxation by their former country. Why aren’t Canadian citizens of US origin receiving the same treatment and protection? I view this lack of protection as a violation of article 15 Section of the Charter of Rights and Freedoms.
Finally I would like to share with you the impact the signing of the IGA has had on my health. I feel that I am suffering a form of IGA post-traumatic stress disorder. Sleeping has become very difficult for me as worry about me and my husband’s future and financial circumstances. I have lost weight. I dread going to the mailbox every day. Will we lose our house that we have lived in for over 20 years if the bank cancels our mortgage? Mortgages have already been cancelled in Countries like Switzerland after their IGA was signed.
That is why I am writing this letter. I am not a lawyer or tax accountant so I cannot comment on the specifics of the proposed legislation with the same type of professional comments they have probably provided. But I can speak from my heart as a true Canadian who used to be proud of our Country and the democratic process. If you pass the implementing legislation as it currently reads, we will no longer live in a country that protects its citizens from the extraterritorial demands of the US.
In conclusion, I urge you to hold a public referendum and public meetings on the IGA and pending legislation before it goes to parliament for approval.
I would sign this letter under my real name but I know that privacy cannot be guaranteed since I saw no indication of any expectation of privacy on your web page. Instead you can send any response to my MP Frank Valeriote as he is receiving a copy of this letter.
Yours sincerely
A distressed Canadian wife of a US origin husband.
I sent mine in as well.
Thank you to all my fellows, who share with us, inspired us and raised their voices – each in their own way and words, contributing against the proposed legislation to enable the FATCA IGA on Canadian sovereign autonomous soil.
badger,
Those are great words you expressed. We have each been a part of this whole process — we would not be where we’re at now without each other and the support that has kept us somewhat sane. I am so proud of each of us and honoured I’ve had the opportunity to know you all in this unusual but contemporary way we’ve met and joined forces to fight this US absurdity that our countries are allowing to happen.
Professors Allison Christians and Authur Cockfield’s submission is a stellar effort as are Dr. Stephen Kish and John Richardson’s. I’ve read both tonight.
I am very grateful to the above for working so diligently on these submissions. Reading through it appears not a stone was left unturned to point out the difficulties and abuses of these IGA’s. It certainly should give the government pause when dealing with them on treaty negotiations in the future!
If this government does not slow down and take the time to fully address all of these concerns then the entire process of government is suspect and I will mistrust in the future any effort to engage in this manner on any other issue. The submissions tabled earlier by my MP Ted Hsu and others were never fully answered but, were disgustingly shoved aside with false or non answers. Enough is enough of such behaviour by our officials.
We were led to believe before that our concerns were brought into the negotiations when clearly they were not. I saw no place where any of those submissions were discussed and the only people at the table were governments and bankers. This process of agreeing to these questionable IGA’s should be fully slowed down until such time as everyone who would vote on this issue fully understands what they are voting for! That is not too much to ask.
We need no more of the stealth from US legislators that brought this horror into being in the first place and then Canadian behind-closed door negotiations with the US for sanctioned complicity. Our leaders have lost sight of their responsibility to represent and protect the people of their countries.