Elizabeth May and the Green Party of Canada have spoken out against the recently announced FATCA IGA between Canada and the US. On Monday, Ms. May raised the issue of Charter rights in Question Period. From Open Parliament, here is her exchange with Finance Minister Jim Flaherty:
Elizabeth May Saanich—Gulf Islands, BC
Mr. Speaker, I rise to ask a question today of the Minister of Finance relating to the Foreign Account Tax Compliance Act, FATCA.
On the U.S. side of the border, there are concerns raised that because the treaties have not been ratified through the U.S. Senate, these may not be legally binding treaties in any case; and on the Canadian side of the border, no less a legal expert than Peter Hogg, former dean of Osgoode Hall Law School, has written the advice that this very likely will violate section 15 of the Charter by treating some Canadians differently from others.
More than 30 years ago, I learned constitutional law in a textbook he wrote.
What will the minister say to its constitutionality?
Jim Flaherty Minister of Finance
Mr. Speaker, I was taught by Peter Hogg as well. I got an A in the tax course.
The question is an important one. It is important for about a million Canadians who also happen to be citizens of the United States.
The Americans initially proposed that there would be a 30% withholding tax and there would be direct reporting by Canadian banks to the IRS. We got rid of that. They have agreed that we will use our existing framework under the Canada-U.S. tax treaty, which has been successful.
No new taxes will be imposed. The CRA will not assist the IRS in collecting U.S. taxes.
This was followed-up by a statement on the Green Party web site today:
FATCA a threat to Canadian rights and sovereignty
OTTAWA – The Green Party of Canada is calling for greater public and parliamentary scrutiny of a recently announced tax agreement between Canada and the United States, stating that it threatens the rights of Canadians and may even violate the Constitution.
On February 5th, Finance Minister Jim Flaherty announced that the United States and Canada had signed an intergovernmental agreement to implement the Foreign Account Tax Compliance Act (FATCA). This U.S. law requires all foreign financial institutions to report the personal financial information of ‘U.S. persons’ living abroad to the U.S. Internal Revenue Service (IRS).
“Although it contains certain exemptions, the agreement negotiated by Minister Flaherty fails to address the most significant threats that FATCA poses to Canadian privacy and human rights,” said Elizabeth May, Member of Parliament for Saanich-Gulf Islands and Leader of the Green Party of Canada. “This agreement also ignores the fact that Canada already has a robust information-sharing regime with the United States, and that Canada stands to gain virtually nothing from it.”
Under FATCA, Canadian banks will be required to search all Canadian financial accounts for the account records of U.S. persons and to report the findings to the Canada Revenue Agency, who will then provide the information to the IRS. In addition to being a significant privacy concern, this would likely be a violation of Section 15 of the Canadian Charter of Rights and Freedoms, which forbids discrimination based on “national or ethnic origin.”
Minister Flaherty and U.S. officials have set a March 10 deadline for public comments on the agreement, after which point the government will bring forward legislation to bring FATCA into effect. Said May: “This deadline should be extended to provide greater opportunities for the public to offer comments on the proposal – There is no reason why public input needs to be rushed on this issue.”
In Question Period Monday, May challenged the constitutionality of the provisions, as they violate s 15 of the Charter, the section that guarantees that all Canadians are equal under our laws. She cited the advice of distinguished Constitutional law professor, Peter Hogg, former Dean of Osgoode Hall Law School who has advised the Conservative administration that the FATCA is not likely to survive a Charter Challenge.
There are an estimated 1 million Canadians with U.S. citizenship or legal status who will be directly affected by this legislation; hundreds of thousands of their family members, employers, and business partners are likely to be affected as well.
Meanwhile, Olesia Plokhii at iPolitics (pay-walled) also covered the story today:
Greens call for more time to study cross-border tax law
Bravo for Elizabeth May and the Greens!
Though the NDP and the Liberals (at least some of them) have spoken out against FATCA, I don’t believe either party has bothered to raise this issue in Question Period. Considering that May is very limited in how many questions she is allowed to ask (being a party of only two MPs, versus more than 100 for the NDP). it speaks very highly of her concern over this issue that she used one of her rare slots to do this.
Last year I donated the same amount of money to the Greens as I did to the federal NDP. No more. This year my entire federal political contribution goes to the Greens. I’ll probably still vote NDP in the next election, as the incumbent is NDP and the Greens are highly unlikely to get past fourth place in my riding, and I want the Tories OUT. But money … I expect some return on my “investment,” and the NDP “return” on my donations has been rather thin on the ground, even on this issue.
Also I don’t recall any of the other parties raising Charter issues in QP, on this or any other issue, but maybe I missed something.
I’ll remember this the next time some NDP money-troller phones at supper time.
Everytime someone in public mentions Charter issue, that is another straw on the camels back.
Articles like this are also useful to send to other like minded political parties especially in the EU.
Poster “Anne Frank” mentioned an idea that maybe the Government would breath a sigh of relief if the courts did the dirty work and knocked this whole edifice to the ground. All I can say is that seems logical and if it happened that gives an EU challenge firmer footing.
If Canadian Brockers can win a charter challenge then I think EU Brockers can bring a EU challenge.
… and, so Flaherty got an A in the tax course (doesn’t specifically say Hogg taught that course, if you parse the wording closely — did Hogg teach tax law as well? do we know?). He obviously didn’t take the constitutional law course, and notice how (in typical Harperite QP fashion) he doesn’t actually answer the question that May asked — about the constitutionality of the IGA. One more example of Tory contempt of Parliament — they never answer questions, they either answer a question that wasn’t asked and they wish had been, or they assail the patriotism or intelligence of the questioner. At least Flaherty didn’t stoop to those latter depths, they way many of his caucus colleagues do as a matter of routine … but he still didn’t answer the question. One wonders why not.
@Schubert: I don’t wonder why Flaherty doesn’t answer the question. It’s because he knows FATCA violates the Charter, but he won’t come out and say that.
He and Finance Canada think we are just blowing hot air when we say we are going to challenge this law. They think we won’t be organized enough or raise the money to be able to do it.
We know differently.
On the topic of other parties, I believe Murray Rankin raised the constitutionality issue in the House.
@George: See my comment to Anne Frank about what I think the government will do. I don’t think they will make a Charter Challenge easy for us. I think they will make it as long, brutal and costly for us as they possibly can. I think deep down they really want us to fail for daring to challenge their authority to whatever they want over the past two or three years.
It was very apparent to me from the Access to Information files I received that since the beginning Finance has been far more concerned about the banks than they have been about the rights of Canadian citizens or pesky little things like Canadian laws or the Charter.
Their dismissal of Peter Hogg tells us all we need to know.
Ms. May has consistently called this out for what it is and had tried in every instance to bring to the forefront the problems with FATCA. I’m so grateful to her!
“No new taxes will be imposed”. BUT there are many problems with the current tax treaty between Canada and USA. I cannot mention all the cases of double taxation. That is why it is simplest just to leave USA which I did.
Just some more wood for the fire. I wonder if May would be interesting in seeing some of the work by American Citizens Abroad and how it falls on deaf ears. The following was a perfect proposal that would have brought people into compliance with a good heart;
http://americansabroad.org/files/7513/7452/3519/Final_Letter_to_Treasury-IRS_July_19_2013_copy.pdf
It’s not easy being green and
to challenge government and opposition thinking. There is a million of us watching to have their fundamental Canadian rights protected. Chapeau et merci to Elisabeth May for speaking clearly about the issue. And to M. Flaherty, next time, please keep completing your last sentence with “…CRA will not be collecting taxes ….OR PENALTIES for the IRS. ”
The details are important to repeat to the ones listening and not sleeping to well. Tell that also to the new US ambassador when he comes to town in the same sentence that mentions Keystone and the Arctic sovereignty..
.
What do they do with all the submissions from organizations and individuals abroad? No mention of any of this; no consideration. Is there a bottomless black hole that this all goes into?
FATCA and the IGA is like so much other really bad and in practice horrible to administer law, no one is going to believe it and no average person is going to care until the shit starts hitting the fan, blowing all around and sticking to the point of gumming things up but good.
Wish it were otherwise.
A Charter challenge might be the best shot left b/c our MP’s and the media have completely let us down.
@Blaze As you know I am not Canadian but on my heart there is a maple leaf. I wonder is there a way to make a charter challenge untenable politically for Harper and his allies?
The world is watching and we are watching Canada, you guys are the front line.
The storyline of tax cheats needs to be changed to sovereignty and how Harper et all are impotent before the USA. A case needs to be made to the opposition parties.
As a sign of encouragement if you guys can break the damn some way then in the EU we will have a tool to use.
Also the trial balloon on language challenges, I think they hold water even if not successful in Canada that could be the encouragement needed in the EU.
Remember in the US under one of the voting rights acts, ballots need to be printed in multiple languages.
How can Ireland expect its Gaelic speaking people to work through Publication this or Form that?
For each Fatca agreement the US must provide the entire IRC and pubs/forms in the respective official languages. That should be insisted upon.
Maybe someone needs to ask if the CRA will be translating all the IRS publications for the francophone population. Is this something that should be presented to the Bloc Q.? .
@schubert
Partisan politics is a mistake IMO. I vote for no one as I no longer am protected by Canadian constitutional law and therefore am not participating in ANYTHING in this country OR the USA (obviously) until our hijacked rights are reinstated.
“He and Finance Canada think we are just blowing hot air when we say we are going to challenge this law. They think we won’t be organized enough or raise the money to be able to do it.
We know differently.”
ATTN Flattery
Guess again, Brockers will fight to the very last breath to preserve our constitution and Charter of Rights and Freedoms from the type of assaults you and your idiot PM have made against this country. Just my opinion and likely shared by millions of others in this (once) great country who now feel lower than the gutter snipe that you yourself are.
Excellent – Thank you Ms May. Help us to keep the fire going. Your efforts encourage the media to cover the matter. The media needs to cover the truth of this matter – frequently – -until the mass of the Canadian people understand what is at stake.
@schubert You hit the nail squarely with the hammer.
If you want to break a chain, find the weak link(s). You now have them.
Constantly at every opportunity in publications on the air re-ask “What will the minister say to its constitutionality?”
Then ask, why wont Flaherty answer?
Questions like that, a simple one, will needle him and needle him. It will also make the public wonder why there is no straight answer.
Please ask E. may to ask again but in writing. Canadian Brockers need to ask their MPs.
@PremierJuliet
“There is a million of us watching”
Incorrect, I wish people would get this right. It’s about 4 million US Persons and maybe more affected in one way or another. One million is simply a number trotted out by Wikpedia or some other service that doesn’t understand the magnitude of this issue. Would those who are giving comfort to the enemy by doubting we can and WILL win please report back to the barracks to do 4,000,000 situps and then write on the blackboard an equal amount of times “WE WILL WIN UNITED AGAINST TYRANNY IF IT’S THE LAST THING WE DO”
You’re right, YogaGirl, no one is believing it because the media is restricted to about 2,000 words to tell the story — a couple of paragraphs worth. If the reporter does “get it” (I’ve had excellent conversations with reporters), the story then goes to an editor who inserts the usual catch-the-attention-of-the-audience headline, like “Tax Cheat”, “Tax Evader”, etc.
Some MPs are giving their constituents rosy ratings of the FATCA IGA the Conservatives “negotiated” with the US, very dangerous indeed if US Person constituents are to believe that “there is nothing to worry about” — Canada has negotiated exemptions. Yes, exemptions for the banks not to have to turn over specific Canadian registered accounts to the CRA to in turn turn over to the IRS. Nothing changes for the US Person individual responsibilities to the US IRS.
We have no choice other than a Charter Challenge (if enough US Persons will realize what is in store for them and their families and step up to be part of the force behind a Challenge). Really, how can one US Person in Canada accept that we are now deemed by the Government of Canada second-class to any other Canadian no matter where they are from or what the parent(s) national origin? So many just don’t realize. We are too scattered and too many need to wake up!
Subject : Notwithstanding…
I am a bit worried that more emphasis seems to be on the violation of Charter rights than on the question of sovereignty. Here in Québec we tend to think more of the powers that the Constitution allocates to each level of government rather than Charter rights, because of the power struggles between the provincial and federal governments. We have seen the notwithstanding clause used in legislation, even where there was already little chance of a Charter challenge. So the question comes to mind, could the FATCA legislation be immediately passed again, after a court decision that it violates the Charter, with a “notwithstanding” clause?
Of course, we can hope that no goverment would be shameless enough to do that.
On the other hand, there could be no recourse to the notwithstanding clause if the courts decided that the federal government does not have the power cede sovereignty by allowing a foreign power to levy taxes on any legal resident, whatever his national origin, neither to collect nor to receive information to aid in the collection of tax by that power. Indeed, that would invalidate that part of the tax treaty that already allows collection from American citizens residing in Canada without benefit of Canadian citizenship.
I am not suggesting that a Charter challenge is unnecessary, but that it should be accompanied by a challenge, based on the power to tax, to the constitutionality of the tax treaty and any legislation that would help the US apply its CBT in Canada.
Also, for the Charter challenge itself, shouldn’t that include the tax treaty itself which allows collection from legally resident American citizens who are not duals? That unequal treatment has been there a long time already.
Please someone join Zero Hedge and start posting. I cannot do this for reasons I don’t want to mention.
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For what it’s worth, my in-laws that are effected by this government’s actions have now emptied their bank accounts and are buying gold stock. They are poor now. Great move Mr. Harper and Flaherty. Lets all give the US government what is in the bank…… nothing!
Petit Suisse, an excellent point about the tax treaty. As Flaherty has pointed out, there is a tax treaty and the structure for sharing pertinent information. In fact, much of the info the IRS needs, it already gets. What isn’t being shared – and FATCA imposes – is the sharing of info that isn’t really necessary for tax reporting purposes unless tax reporting in the US is now part of their “spying on citizens” fetish.
If the tax treaty suffices, why FATCA? Any challenge should ask that question because if the tax treaty is sufficient than FATCA would be a clear overreach because it would be unnecessary.
Calgary411, the media in Canada is just as much bought, paid for and useless to Canadians as it is in the US.
@NativeCanadian
nix on gold shares
go .999 physical only
My point, though, was that the tax treaty itself may be unconstitutional if Parliament doesn’t have the rignt to grant tax levying privileges to a foreign state. Remember, the treaty allows collection of tax liabilities in Canada against Americans living here based on transactions occurring in Canada, in this case transactions producing income, like payment of salaries, dividends, interest, etc. That is already as ridiculous as authorizing the US to collect sales taxes on purchases made by Americans living in Canada. Basically, I am wondering if there is the possibility of a challenge on the constitutionality of the Federal government’s enabling the US’s citizenship based taxation in Canada. IF such were the case, the notwithstanding clause could not be used to counter the court decision.
.