The following is cross-posted from Maple Sandbox, original post by Blaze:
Anne Frank over at Brock made a brilliant but simple suggestion on Friday for a proposed amendment to the enabling act for the IGA. Anne said:
Canada COULD unilaterally amend the IGA via the implementation treaty with a simple “notwithstanding” clause to the effect of “Notwithstanding any other provision of this Act or the IGA, no Canadian citizen resident in Canada or other permanent resident of Canada shall be considered to be a “US Person” for purposes of the Act or the IGA”. The IGA would be unamended – the implementation Act would simply gut it of its Charter-violating aspect…
The Act is amended by inserting after subsection 4(1) thereof the following:
“section 4 (1.1) Notwithstanding any other provision of this Act or the Agreement, for all purposes related to the implemenation of this Act and the Agreement, “US Person” and “Specified US Person” shall not include any person who is a Canadian citizen or is a landed immigrant ordinarily resident in Canada.”
That simple amendment, made to the implementing Act, would put the ball right back in Treasury’s court. They can deem all Canadian financial institutions non-compliant and bring their own financial house of cards down about their own heads (as withholding, while possibly lawful in the US, will not excuse the withholder in any other jurisdiction, including Canada). It would take a positive act on the part of Treasury to blacklist the entire country. They would not be able to point to 10 cents of revenue that they would be seeking to protect in so doing. Further, as pointed out above, Canada would have more than enough fodder to retaliate in kind given the far larger magnitude of US investments in Canada (most of which, unlike bank accounts, can’t be moved overnight). All they would have to do is pretend that the IGA is compliant and drive on. It would be a brilliant move by the Government were they to allow themselves to be backed into it due to a serious Charter Challenge.
BLAZE ADDS: I ran that idea by a few people and have learned that amendment would be best in the enabling law and not in the IGA because the enabling act can be amended in Parliament, but an IGA amendment would require Finance Canada to submit the revisions to US Treasury for approval.
So, Friday night I sent this e-mail to NDP Finance Critic Nathan Cullen and Liberal Finance and Revenue Critic Scott Brison who are vice-chairs of the Finance Committee with copies to Finance Committee members Murray Rankin (NDP) and Guy Caron (Liberal). I also sent a copy to Elizabeth May.
Thank you Mr. Cullen and Mr. Brison for your position and that of your NDP, Liberal and Green colleagues on FATCA in the House of Commons.
The Harper Cons and Finance Canada have been consistent in their unwillingness to listen to Canadians on this and many other issues.
I am writing to you as vice-chairs of the Finance Committee to suggest an amendment to the enabling legislation and/or IGA and to ask if you and/or your party would consider supporting Canadians on a possible constitutional challenge.
SUGGESTED AMENDMENT:
Here is a suggested amendment to the FATCA enabling legislation and/or the IGA.
“Notwithstanding any other provision of this Act or the Agreement, for all purposes related to the implementation of this Act and the Agreement, “US Person” and “Specified US Person” shall not include any person who is a Canadian citizen or legal permanent resident who is ordinarily resident in Canada.”
With a Conservative majority on the Finance Committee and in the House, I realize this amendment would be likely to fail. However, it may force Conservatives into voting against it, showing they clearly will not stand up for Canadian citizens and residents who were born in the United States.
POSSIBLE CONSTITUTIONAL CHALLENGE
You raised the Charter issue in the House. For your information, Dr. Stephen Kish and I have retained Joseph Arvay for a legal opinion on this. We were able to do this because we raised the money for this legal opinion in just six days from Canadians and people around the world.
If the Charter challenge proceeds further, we expect we will be able to raise the funds for that. Would you and/or your party consider supporting us in this?
Attached is a copy of a news release issued on March 10 regarding this.
Again, thank you for your efforts on this affront to Canadian citizens, residents, laws, rights and sovereignty.
****************
SCHUBERT’S COMMENT, POSTED ON SANDBOX:I sent a similar email to Nathan Cullen the same day that Blaze sent her email (in fact, we consulted briefly on this by private email), giving some further arguments for the political advantages of forcing the Conservatives to vote on the proposed amendment.
The next day as it happens I received a recorded voice-mail robo-message at home from Tom Mulcair (Leader of the NDP and of the Opposition in the House of Commons), reminding me he was giving a speech Sunday morning April 6 in downtown Ottawa to kick off the NDP’s 2015 election campaign, inviting me and my wife to attend that speech. The venue is an easy walk from our home.
I decided it was important to reinforce the emails with some personal contact, taking advantage of the meeting and hoping that Cullen might be in attendance (he wasn’t, as it happens). So I printed copies both of my email and Blaze’s and stapled the copies together.
I attended the speech. Immediately prior to the speech, I had a brief opportunity (which I took) to introduce myself to Mulcair (who was waiting for an elevator next to me) and to hand him a copy of the emails. I said I’d hoped to give the emails to Cullen, but he wasn’t there, and giving them to the Leader of the Opposition was so much the better. Mulcair smiled, accepted the pages, and said his caucus had repeatedly raised FATCA and the IGA problems in the House earlier that week. I said I knew that, and thanked him profusely for the NDP’s support on this. He gave me two thumbs up and disappeared into the elevator, 20 minutes or so before giving his speech.
After the speech, I saw my MP Paul Dewar (NDP Foreign Affairs Critic) at the back of the audience. I spoke briefly with him, confirmed with him that Cullen is the NDP’s “point person” on the omnibus budget bill and related matters including FATCA, and gave Dewar my backup copy of the emails. Dewar told me he would deliver the printouts to Cullen himself.
So that’s two independent and very senior by-hand routings of the draft amendment to Cullen, in addition to his email inbasket which may or may not get a lot of attention in the next few days. I think we can reasonably assume those in the NDP who need to, will read the draft amendment and the rationale for it. What they do with this is, of course, up to them and their strategy and priorities under the tight time deadlines the Conservatives are imposing on Parliament for debating and voting on this complex and fundamentally anti-democratic omnibus “budget bill” (which isn’t a true budget bill, but an abomination and an abuse both of the budget and of parliamentary procedure).
Thanks to “Anne Frank” for suggesting the draft amendment in a post a few days ago. Once again, we’ve all shown how we Canadians can support each other in this battle, on short notice.
My apologies for the lack of spacing between the paragraphs of Blaze’s email; after repeated attempts to insert double-hard-returns in my draft, for whatever reason I can’t get WordPress to take those spacings. I’ll try again, but if it doesn’t work, please bear with me. It’s technology’s fault, not mine nor Blaze’s …
@Schubert: “It’s not our fault. It’s the Americans.” (CBA and Cons) 🙂
We love it spaces or no spaces. Thank you Blaze and Schubert and Anne Frank who made the original suggestion. It makes perfect sense to Brockers and Boxers. Now let’s hope it clicks with the politicians too.
@Shubert1975 and @Blaze. And @Anne Frank thank you for this work
Fantastic @Shubert1975 , you could attend this event and actually speak and hand out the proposed amendment idea to these MPs.
This can bring good to, our fight against FATCA.
Hi All; Thank you for your tireless efforts.
Though I disagree personally in the interest of what is right, US Citizens are going underneath the bus and nothing is going to stop that.
I am assuming that a landed immigrant in Canada is someone who has permanent residence status and is not on a probationary status for a period of years.
I think the following is more likely to either gain support or at least corner the conservatives.
“section 4 (1.1) Notwithstanding any other provision of this Act or the Agreement, for all purposes related to the implemenation of this Act and the Agreement, “US Person” and “Specified US Person” shall not include any person who is a Canadian citizen ordinarily resident in Canada.”
The above would take care of anyone with clinging nationality and in fact establishes a good precedent for other citizens who have clinging nationality elsewhere. It establishes the Paramount Principal.
Further to what I said above….
As the amendment is likely to fail, the idea is to make the tip of the political spear as sharp as possible and have it coated with political poison.
By keeping landed immigrants out of it, you make the tip sharper.
Forcing them to solely vote against Canadian Citizens makes it political poison.
You want to make them squirm and give them no way out.
HI George.
I heard you the first time a few days ago, and personally I agree. I said that my email was “similar” to Blaze’s. In fact, in my email I used the citizen-only wording you propose, and I added a paragraph pointing out that (rightly or wrongly, that’s potentially a separate charter challenge) under the US-Canada Tax Treaty, of which this IGA is specifically a part, Canada Revenue Agency will NOT collect tax liabilities claimed by IRS against residents of Canada who were citizens of Canada at the time of the alleged liability, nor for any time period if they were Canadian citizens prior to (I think I got the year right) November 1998, don’t ask me why that date I have no bloody idea. (But they will collect against legal residents of Canada who aren’t citizens of Canada, presumably and by omission.) I added to my email that there is no rational reason for CRA to report account information to IRS on persons against whom they can’t, under the treaty, enforce tax liabilities or penalties. What is the point of account information to IRS if they can’t collect on it? (BTW that exemption IS in fact reciprocal, CRA can’t get IRS to collect in the US against any Canadian persons resident in the US who were US citizens at the time of the alleged liability, either, and with the same 1998 grandfather/mother provision there too.)
I thought it important that BOTH versions be presented, and BOTH email printouts went to Mulcair and Dewar. My email was sent to Cullen electronically as well.
From a Charter standpoint, I’ve been told there has been a court ruling in Canada that Section 15 protections of ethnic and national origin apply to legal residents (that’s long-term, “permanent” residents formerly called “landed immigrants”) as well as to actual citizens. But I agree that from a political-poison standpoint, the citizen-only version of the amendment is ironclad and should also absolutely nail down support for a Charter challenge if the Tories vote against that amendment. By keeping it simple and focused, one would be forcing all those Tory backbenchers who are (we hear) increasingly angry about Harper and his office’s riding roughshod over elected backbenchers, to decide whether or not they have a pair and a spine and or whether they’re going to roll over once again and do something so blatantly unsupportable as throwing actual citizens under the Tory bus.
But as I said in my response to Blaze’s news, at the end of the day it’s the opposition’s decision how they play this.
A little bird (but not me) is now telling you that Brison and May (Liberal and Green) also got the alternative message … separately. The point is out there; we’ll see who listens to which one.
Landed immigrant is actually an old term. The term that has been used for over a decade is permanent resident.
It is my understanding that at least one previous Supreme Court decision has given protections to residents of Canada who are not citizens. It was the very first Charter case ever heard in 1989 Andrews v Law Society of British Columbia). Also, in his letter,Peter Hogg included permanent residents. So, I was not prepared to discriminate in my suggestion.
Schubert’s version only included Canadian citizens.
I copied Murray Rankin on my e-mail. He is a member of the Finance Committee and is also a lawyer, former law professor and former law partner of Joe Arvay, so he will know what language would work best. If they introduce amendments, they may very well differ from the ones we suggested.
I don’t know if it would help or not, but if anyone supports such an amendment, you may want to submit something to the NDP or Liberal members of the Committee of the Finance Committee yourself. Heck, you might even want to submit it to the Con Finance Chair, James Rajotte.
Thanks again Anne Frank for the suggestion.
Oops. It looks like Schubert and I were posting our replies at the same time, so some of the information in my comment is redundant.
George – the issue with excluding landed immigrants is that the Charter does not. The Supreme Court has ruled that the Charter protections apply to landed and citizen alike. That being said, I wouldn’t object to changing it – I just think that if Parliament takes it on board to actually attempt to comply with the Charter in adopting the IGA as law, then they will likely go with the inclusive language.
The argument if favour of doing it remains the same. The Charter challenge they are open to if they DON’T do it is pretty obvious and very strong. Further, by amending the implementing statute and not the IGA, they would be calling the US’s bluff. Are they REALLY going to put Canada in the doghouse with Russia, Iran and China because we have a law protects fundamental human rights? Rights which they themselves have in their own Bill of Rights? When they know that reciprocity would demand as much to be passed in their own laws? Given the ostensible targets of fatcat, champagne swilling yacht sailing tax evaders living in the US and hiding their millions in Switzerland, they won’t possibly be able to argue that the amendment to the Act (the IGA is intact) will deprive them of any intended object of FATCA. Dual citizens were never their stated target.
As I have indicated elsewhere, the US is playing Russian Roulette with its own fragile banking system if they try to ostracize Canada. The hundreds of billions in cross-border derivative contracts alone would be subject to massive cross-default if they were to start unilateral withholding given that our law won’t back up the legality of their doing so potentially inviting Canadian financial institutions to start declaring B of A, Wells, etc in default and terminating outstanding agreements with them where it may be profitable to do so. Canada could also retaliate on remittances from US investments in Canada that would easily exceed Canadian investments in the US. A further risk they would rather not run is that actual implementation of withholding would cause a cascading stampede away from the US dollar as a world reserve currency after which – goodbye ability of US Treasury to finance deficits by printing money and stashing it abroad.
There are so many things connected to lots of other things in the world financial system and the US is very, very far from controlling all the cards. I am quite confident that the US would be compelled to overlook a minor, technical amendment of the sort described if introduced by Canada rather than face the consequences of throwing a temper tantrum.
Of course the beneficial side-effect of Canad showing leadership here MIGHT just be a cascade of similar reservations by other countries followed by the US undertaking a sober review of CBT which they will quickly realize is causing more headaches than it generates in revenue. The OECD wants to get a GATCA regime in place – CBT is a pretty big hurdle to doing that since it makes states competitors for tax dollars instead of having common interests in fighting evasion of the tax base of all. Of course libertarians would view GATCA with horror and I am not expressing any kind of political view so much as trying to call the political fault lines where I see them lie!
Further, I for one DON’T assume that the Conservatives will lie down on the tracks to block an amendment of the sort described. It is simple, elegant and provides a face saving way out of the room for Finance AND the US. That’s not to say I think it is likely, just that it is something I can see them getting behind in the right circumstances.
@Blaze
Helps us remember all this great amendment you both gave the MPs.
@schubert, with bringing together the pledge not to collect against Canadian citizens you my friend have been dipping the spear point into little blue/green amazon tree frogs. 😉
Now riddle me this…….
CRA has pledged not to collect against Canadian Citizens. But with this FATCA/IGA we have gone through the looking glass.
Canadian Citizens with clinging US nationality are second degree citizens NOT first degree Canadian Citizens.
Does the CRA pledge not to collect solely apply to first degree Canadian Citizens or does it also include second degree Canadian Citizens.
IF the Government of Canada can rationalize an IGA that throws second degree Canadians under the bus, surely they can reclarify the CRA pledge as only applying to first degree Canadians.
I think I have just looked into pandoras box.
“Anne Frank says
April 6, 2014 at 5:01 pm
George – the issue with excluding landed immigrants is that the Charter does not. The Supreme Court has ruled that the Charter protections apply to landed and citizen alike. That being said, I wouldn’t object to changing it – I just think that if Parliament takes it on board to actually attempt to comply with the Charter in adopting the IGA as law, then they will likely go with the inclusive language. ”
Should not the 1995 Canada USA Tax treaty be under charter challenge, it actually allows collection of USA taxes. By the way which party was in power when this was approved? Did other countries cave into the USA in 1995? Please note our FATCA agreement is a lot better than what is happening in Europe.
If this is defeated in Parliament do you really want Trudeau negotiating a deal?
@George III, “Please note our FATCA agreement is a lot better than what is happening in Europe.”
How is it better than the UK? I have looked at the two and the difference is no wider than a piece of cigarette paper.
@Anne: I actually believed (OK everyone I am admitting I was WRONG!) that the IGA would have a clause exempting all Canadian citizens and residents living in Canada or whose residency for tax purposes is Canada. I thought the two governments would agree that because of the long-standing information exchange between Canada and the US that the Americans could use that to save face.
Failing that, I thought the enabling legislation would be consistent with Canadian banking, human rights and privacy laws, not that it would override those and any other laws “inconsistent” with the IGA.
That the Cons have introduced a law to prevail over long-standing Canadian laws and values says to me they have no interest in protecting our rights. I hope I’m wrong this time and that they will accept your excellent suggestion and let us all move on from here.
I hope you submitted your amendment and rationale to someone who might be able to help.
A tweet that has nothing to do with FATCA pretty well sums up where we’re at in Canada under the Cons.
Adam Goldenberg @adamgoldenberg 22h
Of course the government isn’t declaring war on Elections Canada. That would be as crazy as declaring war on Statistics Canada. Or judges.
@George
FWIW both Flaherty and CRA spokespeople have been saying, in print and in public, all along that the CRA “pledge” not to collect against Canadian citizens applies to ALL Canadian citizens no matter whether they have dual nationality with the US or anywhere else.
Government MPs in speaking to the House on the subject of the IGA when it was first announced, repeated that assurance on the floor of the House. It’s in Hansard.
There is no such thing in Canada as “second class citizenship.” It’s not provided nor allowed under the Charter. Lawyers have told us that the Charter in fact is supreme over any treaty or intergovernmental agreement. The only way it can be overridden is through voting a “notwithstanding clause” (which is only valid for five years and then has to be renewed; governments in Canada legally cannot last longer than five years so there would have to be an election before renewal of any charter override). Though the Quebec government has evoked that clause on “language rights” in Quebec, AFAIK no other government (including federal) has done so yet, and it’s unlikely any would. That would be ever greater political poison than voting down the proposed amendment IMO.
The bottom line though is, if you don’t trust this current government (and I don’t and never have), then vote in 2015 and get rid of them.
But we’ll see. Fear of what this current band of outrageous undemocratic lunatics will do with a Pandora’s Box is absolutely no excuse for not fighting back as best we can, which is what we’re all doing.
@George and Shubert : Flaherty, Sorenson and Oliver have all reconfirmed in the House CRA does not and will not collect for IRS.That has been part of every statement they have made in Parliament on the IGA and the enabling law.
Plus, Canadian courts up to the Supreme Court of Canada have in the past refused to allow IRS to collect in Canada.
Yet, we see a law introduced that prevails over all other laws to surrender financial privacy to the IRS and US Treasury.
What great luck, Shubert to have handed our suggestions to Mulcair. Thank you so much for this. I really believe the NDP is on our side. It’s our only hope. I’ve tried rattling the Liberal cage asking for their attention but it has fallen on deaf ears. At least the NDP has been receptive. Grateful for that as we keep on keeping on. Hats off everybody for a job well done. One day we will celebrate. I think so!
Anne Frank, Schubert, Lynne — thanks for your taking opportunity and running with it. Excellent work!!
I’ve written to Cullen twice regarding this:
– Thanked him very much for his anti-FATCA IGA comments in the House
– Sent link to Christians & Cockfield FATCA IGA article
– Asked if citizens could make additional submissions to the Finance Committee to counter the banks’ inevitable pleadings (or even appear to testify)
– Suggested an amendment to exempt both Canadian citizens and Canadian Permanent Residents from the enabling legislation. I believe that Charter protection extends to all residents of Canada, not only citizens.
Making the Harper government REFUSE to carve out protection for Canadians is a key tactic that will compromise their position further down the line.
According to Hunter S. Thompson, Lyndon B. Johnson advised Texas campaign staff to spread rumors that a political opponent was romantically involved with his own livestock. His staff countered, surely nobody would believe that candidate was having sex with animals. Johnson replied, “Well of course he isn’t, but let’s force him to deny it publicly.”
A few further thoughts:
1) Is there any way to enlist university students in this emerging movement? At McGill University, where professor Christians teaches tax law, there are many students who are either from the US, are dual citizens of US and Canada, or have a significant US tie.
2) It’s interesting that while the Harper government and their collaborators at CBA, et al have been as opaque as possible, the entire movement opposing has has been utterly transparent – relying on social media, crowds sourcing, and blogs. Our strategy is to be public – this is like a virtual Tahrir Square. Who will have has history on their side – and how will history judge the Harper government’s capitulation to coercive threats? This will be an interesting case study for Law, Political Science, Public Policy, and Internet Technology students. If you are an instructor or professor in any of these areas reading this now, PLEASE get your students involved – this is history in the making.
3) There are some important constituencies to get on-side in this: academics, the gay community, and the Jewish community. It should resonate with these communities’ history and interests.
@Wondering: LOL at the LBJ story. Reminds me of when the Ontario Cons called Dalton McGuinty an “evil reptilian kitten eater from another planet.” The sitting Con Premier dismissed it as from a staffer who had “too much coffee and too much time.” He didn’t retract it. McGuinty had lots of photo ops with kittens and became Premier.
http://sympatico.globeandmail.com/servlet/story/RTGAM.20030912.wonta0912/front/Front/frontBN/sympatico-front
It would be great if we could get some students involved. Any suggestions anyone?
My recollection is that Obama’s proposed budget includes language to give the US Treasury the power to order US banks to disclose (i.e. all the US to meet its reciprocity obligations under the IGAs) but does not include US citizens. In other words, if the person is a dual US/Canadian citizen, there is no obligation to report. I can’t recall if Green Card holders are also covered, but it would be good to check this clause and make the point that the Canadian proposal to amend (via the implementing legislation) is effectively the same as Obama’s US proposal.
I’m so grateful to those who never tire in their efforts to rid us all of this scourge that’s consumed so much our lives. You are all heroes in my books!
A little aside here. I was just in Seattle and had a chat with a cab driver who when my husband asked where he was from, revealed he was from ERITREA! He asked if we’d ever heard of it, to which I responded “you’d better believe it!”. I gave him a very brief story on why I would know about his country, and he had no idea that the US also practices citizenship based taxation. During our brief discussion I tried the best to explain the differences between the two, and it was somewhat satisfying for me to correct his belief that the Eritrean diaspora tax was 3%. I told him to never become a US citizen – to which he asked me what he should do, as he was planning to become a US citizen next year. I said it’s probably not such a bad idea if he isn’t planning to leave the US in the future. He had plenty of gripes about the US and nothing but good to say about Canada. Of course I then had to tell him how Canada has sold us out throught FATCA. He then wanted to know everything about FATCA, so we parted company with me scrawling FATCA across the back of his business card and asked him to imagine what it would be like for him to move to Canada and have to pay tax to the Canadian, US and Eritrean governments.
This is an interview with an NSA whistleblower. It suggests just about the most unique use of viagra as you can imagine (about 9 min mark):