UPDATE SEPTEMBER 19, 2015: SEE ALSO DISCLAIMER AND LITIGATION UPDATES.
[This post, which began in May and having over 1000 revisions and 2000 comments, is being retired from service and updates. It lived through the success of reaching a total of $500,000 in donations from our kind, dear supporters who had little money to give, the hope and disappointment with the summary trial decision, and the certainty that we are now finally moving on to the Charter trial.]
CANADIAN CHARTER TRIAL UPDATE:
— We have instructed the Arvay team to prepare for the “Constitutional-Charter” trial. This means that our focus now, as it was in the beginning of our lawsuit, is on the Charter trial.
Unless there is a new expense in the future that we have not anticipated, the monies from your donations will be sufficient to take us through the “constitutional-charter” trial in Federal Court. However, to pay other legal bills we will need additional donations from our supporters, and a request for donations will appear on another post soon.
OUR LITIGATION HISTORY:
One year ago, on August 11, 2014, Litigator Joseph Arvay filed a FATCA IGA lawsuit in Canada Federal Court on behalf of Plaintiffs Ginny and Gwen, the Alliance for the Defence of Canadian Sovereignty (en français), and all peoples.
Because of a Government delay we initiated a “summary trial”, using a portion of the arguments, which offered the possibility of preventing private banking information from being turned over to the IRS before September 30, 2015. See Alliance’s Claims, our Alliance blog, and AUGUST 4-5 SUMMARY TRIAL FILINGS in LITIGATION UPDATES.
“only if there is a compelling enough reason and if it’s for the greater good.”
They will as they already have stated that the greater good is to avoid the 30% bank withdrawal which would cripple the non compliant Canadian banks if applied.
The good reason is not helping the US with tax issues, it’s to avoid crippling the banks.
How do we get around that reasoning to win the challenge?
When I said it was unfortunate that the ADCS lawsuit didn’t include a plaintiff born in Canada, I should have added “in addition to the current plaintiffs”. No disrespect intended, Gwen and Ginny!
@noone
Very good question. I guess right now we just have to trust the litigator, Joe Arvay.
@Marie
Reading Section 33 from the Wikipedia page it doesn’t look like there are any constraints requiring a “compelling enough reason” or the service of the “greater good” before the notwithstanding clause can be invoked:
https://en.wikipedia.org/wiki/Section_Thirty-three_of_the_Canadian_Charter_of_Rights_and_Freedoms
Am I reading it wrong? It looks to me like the notwithstanding clause can be invoked for no reason than the federal parliament or a provincial parliament says it is invoked–for five years at a time although it can be renewed with a new vote. Again, am I reading it wrong?
BTW–did Canada’s parliament invoke the notwithstanding clause in passing the IGA legislation? It does look like to invoke the notwithstanding clause, parliament has to explicitly invoke it at the time the legislation is passed. They can’t do so only later in a court hearing. Did they do so in this legislation?
I think BTW that Section 33 greatly weakens Canada’s constitution. While I’d agree that things like hate speech and child pornography are great evils and rightfully must be made illegal, I’d prefer to do it by including guidelines as to when one right trumps another in the case of a conflict. In the case of hate speech or child porn, I believe the Charter rights to security of the group hated or the child trumps the Charter right to freedom of expression. The constitution could have been written to say so without watering it down so much with the notwithstanding clause.
Will the next Canadian government think it’s in the country’s best interest to create a two-tiered citizenship?
@bubblebustin
That seems a hypothetical question because the next Canadian government will not be in a position to create two tiered citizenship from scratch since Harper has already created it. There are multiple laws–the IGA being only one of several–that have created two tiered citizenship. I am interested however in whether the next Canadian government will consider it in Canada’s best interest to dismantle Harper’s laws and return to a one-tier system of citizenship.
I personally became a second class citizen in 2009 when Harper took away my right to pass my Canadian citizenship on to my children. Since Harper had only a minority at the time, he was not acting alone so I’m not optimistic the next government will dismantle this system. Of course this is hypothetical in my particular case because I don’t actually have any kids–but the 2009 law passed by Harper with opposition support has definitely hurt real Canadian families with real children.
@Dash 1729
I don’t think they invoked section 33 when they passed the IGA. If they did it would certainly have an impact on the litigation initiated by ADCS and I’m assuming we would all know about it. I’ve read that the use of section 33 is highly controversial and rarely used. Maybe I’m reading a bit too much into it or making too many assumptions (you know what happens when you ASSUME, LOL). If it is easy to invoke just because parliament says so, why don’t they invoke it with every new law and save some $$ on court costs?
@Marie
Good to know.
Yes the Wikipedia article further down does say that it has never been used at the federal level. The article cited is from 2007 (pre FATCA) but, yes, I assume we’d all know about it had it been invoked for the first time in passing the IGA.
I’d imagine that it is difficult to invoke because it is, as you say, controversial.
I believe I was confusing the notwithstanding clause with the “reasonable limits” contemplated in Section 1. Although the notwithstanding clause has been invoked only very rarely and only at the provincial/territorial level, the “reasonable limits” clause has been invoked more liberally (lower case ‘l’ liberal).
Question: does anyone have any estimates as to exactly how many Canadians’ data is actually going to be turned over to the IRS come next Wednesday? Also is September 23 the date for the banks to turn the data over to the CRA or the date for the CRA to turn the data over to the IRS? I think it is the latter–does anyone know when the banks turned the data over to the CRA? Even that–in my view–is problematic since it involves more data than banks usually have to share on Canadian taxpayers with the CRA.
Presumably–barring some completely unforeseen development in the next six days–this data, at least for some Canadians, is going to be turned over soon sadly. I assume the infrastructure to do this is already in place at the banks, the CRA, and the IRS and the number of people involved is roughly known to those institutions at this time.
But I’d be at a loss to estimate exactly how many Canadians will actually have their data turned over. Presumably Gwen and Ginny are personally at risk because they have courageously made their situation very public. But will others in a similar situation–Canadian citizens and residents since childhood–have their data turned over? Someone who has been a long time resident and hasn’t changed their bank accounts lately might not have any US indicia–in the past, I don’t recall ever being asked my place of birth at a Canadian bank. So the actual numbers of people might be small.
Then again the actual numbers of people might be huge too if the banks take an expansive view of what constitutes ‘US indicia’–the banks could conceivably target huge swaths of people beyond even the 1 million estimate that is often used on Brock.
Anyone know what is actually going to happen on Sept 23? I have to confess I don’t have a very clear picture.
@Dash1729
I don’t think anyone has a clear picture of what is going to happen come Sept 23rd. There is so much secrecy around this agreement. Sadly, you can’t even ask your bank or the CRA because that would mean identifying yourself as a US person.
@Dash, from memory:
Cdn FFIs were to transmit data to CRA this past spring…might have been May
That data, IIRC, was to report new accounts (from within 2014?)
Next years’ dump will be ferreting out existing accounts
CRA deadline to IRS is Sept. 30.
again, from memory
Republicans Overseas comments on the outcome of the Canadian lawsuit:
“In his ruling against two dual US-Canadian citizens’ legal challenge to block Canada to hand the banking information of US citizens with Canadian banks to the IRS on Wednesday, Justice Luc Martineau of the Federal Court of Canada said the following:
[51] Nor is it necessary to decide whether the IGA is a “treaty” under US law. While the status of the IGA as law in the US may be ambiguous – the US Treasury has decided to treat these types of intergovernmental agreements not as treaties but merely as interpretations of treaty terms – as far as Canada is concerned, by the effect of section 3 of the IGA, the IGA is approved by Parliament and has the force of law in Canada during all the period it is in force. In Canadian domestic law at least, the IGA constitutes a tax treaty or a listed agreement within the meaning of subsection 241(4) of the ITA. Detractors of the IGA may wish to question the legal application in the US of the IGA on the grounds that it has not been ratified by Congress – a point that the Court is not called upon to decide today. The IGA is certainly a treaty from the Canadian perspective. At worst, the IGA is still a binding agreement between the US and Canada respecting the interpretation or application of the Canada-US Tax Treaty, and as such may be considered in interpreting the latter, which is a treaty pursuant to the Vienna Convention on the Law of Treaties, Can. TS 1980 No. 37.
Justice Martineau’s statement supports Mr. Bopp’s argument that Obama does not have constitutional authority to use IGAs as tax treaties without Senate advice and consent or Congressional approval.”
What’s happens should each country’s interpretation of what the IGA conflicts with the other’s?
@bubblebustin
You make a valid point.
But the Alliance for the Defense of Canadian Sovereignty (of all organizations–sheesh) should not be dependent on what anyone south of the border does. Not Rand Paul, not Jim Bopp, not Judge Rose, and–to be utterly brutal and truthful–not even me.
You need a legal argument that will stand on its own north of the border without American support.
Since I trust you will be respectful of Yom Kippur in Israel–one of the Bopp IGA countries–the real deadline here is Sept 21. Time is very short. If money is an issue I am willing to help. It is only 10pm on the West Coast. The night is young. I trust you will put appropriate pressure on Arvay to make the financial requirements clear before the night gets much older. This cannot wait until morning. I will stay up until you act.
$500,000 is a lot of money. At one time, I thought it would be enough to take us through the full charter challenge in Federal Court. ( the first stage of the charter challenge, not the appeals). So far we have had a summary trial but not the full deal.
Many of us would need some accounting of where the first 500 k has gone and some understanding as to whether or not there is any left at this stage before committing further.
@Duke of Devon
A full accounting before the night gets much older would also be highly welcome. But I honestly feel that Arvay, Gruber and the ADSC-ADCS team have handled the funds contributed so far ethically. The stay being requested would be at a higher court level so not covered by the $500,000. But I do hope we hear more from the ADSC-ADCS team within the hour. This cannot wait until morning.
Since it is now past 1am here on the West Coast, the night is no longer as young as it once was. I presume the reason why there hasn’t been a response is because people are exhausted from fighting this fight. I understand this and at this point won’t expect a response until morning. However I reiterate: if you are aiming to achieve another funding goal by Sept 21 (or 23) time is very very short. There are certainly those of us who are willing to help but logistically to make this happen–if indeed the goal is to reach a funding goal by Sept 21 (or 23)–people need to be moving in ‘urgent’ mode. I’m willing to help move funds to you urgently but there needs to be some sense of urgency on the ADSC-ADCS side too.
I hope to revisit this early Friday morning.
@Dash….I think the callout for funding is NOT “we need $$$ today to file the appeal” rather they are going to appeal and there will be a bill to pay.
Your question on how many accounts will be disclosed is one I had and I was wondering if a freedom of information request to CRA is in order.
Lastly, your energy and input on these boards even in the ten percent we disagree, is both invaluable and appreciative. You are making a difference from your corner of the globe, thank you.
@Bubbles…..first just in case….and as we all have just gone through the valley of the shadow with the latest ruling……I hope you understand when I refer to you as Bubbles instead of Bubblebustin, it is done with kindness, a smile, affection and a great sign of thank you and appreciation.
@Brockers….just some thoughts on moving forward.
The ADCS team and I mean the whole team is far greater than simple addition. The background and skill sets are superb and working together.
We have Calgary who brings her heart and compassion to the table who never again wants to see another person burned so bad as she was.
We have Gwen and Ginny whose bravery is the finest this man has seen which I state with great sincerety, sobriety and it is not meant to be frivilous flattery.
We have John Richardson……..a lawyer with a heart for his neighbor……a man who believes the law serves man and that man does not serve the law. And he is one of the few who know the ins and outs of FATCA and CBT.
We have Joe Arvey, a lawyer who I would not seek to socialize with but he is the BEST in his craft. There is no finer litigator in Canada than Joe Arvey.
And we have the rest of the TEAM, who have given all they have for the love of neighbor, nothing else.
A decision was made for the Summary Trial that I know was made soberly. We did not get the easy win we hoped for. The reason behind it was good and important and I am confident was made considering the balance of probabilities.
A decision has been made on trying to get a stay that will cost $$$$ which again is being made on the balance of probabilities.
This man has NO doubts on the ADCS decision making, none.
As I wrote yesterday, a donation went in the mail before Stephen Kish even asked!!!
Did we lose this week?
I have felt but now I believe that the “law” is essentially an ass.
This case presented to all possible Judges in Canada, some would have ruled in our favour.
Case in point is the Obamacare ruling in which John Roberts ruled the penalty was in fact a tax even though the Govt stated it was not a tax!!!!
The long walk to China begins with the first step, China here we come!!!!
@George
I think the callout for funding is NOT “we need $$$ today to file the appeal” rather they are going to appeal and there will be a bill to pay.
Well the wording of the main blog message on this thread says that to make the appeal/stay request happen, donations are required. If there is more flexibility on the timing of the donations that would be very welcome news but I don’t want to assume that until we hear more from the ADSC-ADCS team. As it is now early morning in Toronto–where the majority of the team is located–I hope they can confirm soon.
Small donors like me understand that we cannot understand or judge the whole process or the costs implicated, and that some strategic secrecy may be necessary. We are grateful that this is moving forward in a way that we could never have done, bravo to the team. Nevertheless it is always nice to know approximately where we stand financially, and a reminder of what the $500k did cover. I for one will continue to donate.
I support ADCS 100%. I am in it for the long haul. However, it would be nice to know what $$$ is remaining in the war chest, and how far that $$$ will take us.
Let’s face it, litigation is still our best option.
A Liberal or NDP government will not make much of a difference in Canada.
ACA and DemsAbroad have been unsuccessful in their attempts to make minor changes to FATCA.
A Republican president may or may not make any difference (we could have 4 more years of Democrat). I’m not too familiar with the James Bopp lawsuit doesn’t sound very promising to me ( I hope I’m wrong about that).
I suppose it’s prudent for the Arvay team to pursue all legal options. It sure would be nice though if the U.S. lawsuit made all of this moot! I’ve always felt that this bad law deserved to be killed where it originated, but I too am not relying on that. I can’t see any judge caring about how any other country views the IGA – after all, the U.S. is a sovereign country!
@George
Thank you for your kind words. Although the name “Bubbles” does call up the image of a brain-dead yet stunning mobster arm candy in my mind, what’s in a name? A Bubblebustin by any other name smells as sweet!
I am glad we are moving forward with a Stay and Charter Trial. “Never, never, never give up.”
More in today’s news on the court case:
http://www.tax-news.com/news/Canadian_Court_Dismisses_AntiFATCA_Injunction____69183.html
@All
I just wanted to let you know there was a big document dump out of the EU Commission in Brussels regarding FATCA. Some of you might like to take a look below.
http://sophieintveld.eu/commission-discloses-documents-on-us-tax-agreements-with-eu-member-states/
One thing to make note of is that in Europe and Canada there tends to be a view that citizenship based taxation is permitted under customary international law and that the EU and Canada lack any standing to challenge this. This viewpoint is apparent in Martineau ruling and in many of the EU Commission documents.
While this is very divisive even among Brockers (nevermind the more traditional expat groups) in my conversation with the ADCS leadership team last night I shared the view that perhaps it is time for a much more direct challenge of the US’ “right” under international law to impose CBT.
Thanks, George, for the call-out to all of us. (And I give a call-out back to you!)
Two of the most important, working many hours everyday behind the scenes, persons (much more than me), are
– Stephen Kish who is the person from ADCS-ADSC who communicates with the Joseph Arvay / David Gruber litigation team
and
– Tricia Moon, the Treasurer/Secretary, who takes care of all of those unseen, but so important, accounting regulation duties for the non-profit ADCS-ADSC organization.
and there is also the assistance and input from
Lynne Swanson, Chair, Legal Challenge Committee
Alliance for the Defence of Canadian Sovereignty