April 14, 2016 Canadian Parliament ETHI – Standing Committee on Access to Information, Privacy & Ethics

82 thoughts on “April 14, 2016 Canadian Parliament ETHI – Standing Committee on Access to Information, Privacy & Ethics”

1. This committee can talk until the cows come home. The bottom line is a resident Canadian citizen deemed a US person cannot do what they want with their own money as another Canadian born Canadian citizen.

   That’s the real different. This discussion has revolved mainly about data protection.

2. Thanks for posting this @calgary411. My replies from ParlVu this morning said they had technical difficulties with the video but they managed to resolve them. I’m watching it all again but it’s painful to hear the myths and misperceptions being touted by people who simply refuse to step beyond their precious status quo.

3. I’m just 20 minutes through, and there it is in all its glory- the Big Liberal Flip-Flop. The Revenue Minister (allow me to paraphrase) alluding that the Liberals supported the FATCA IGA all along and would have put the legislation through, only would not have hid it in an omnibus bill, and should at least be commended for making the effort to explain to Canadians what the law meant before it was passed.

   This is a flagrant lie.

   I’ll watch the remainder when my blood pressure stabilizes.

4. One of my huge concerns about the Fibbing Libs flip flops is they now seem to also be silent on CRA will not collect for the IRS.

   At least the Cons repeated that mantra numerous times when they were defending the IGA. Has anyone seen or heard anything from the Libs on this?

   It may be in the video, but like Bubblebustin’. just watching the first few minutes is making my blood pressure (usually low) skyrocket.

5. @ Bubblebustin
   I can’t take it all at once so I watch, yell, pause for several minutes to recover and then repeat. Like I said … it’s painful.

   BTW, the inept, irritating, insensitive and inglorious Revenue Minister mentioned in her opening salvo that in some instances banks may close accounts … doesn’t seem to bother her a bit.

6. @Blaze

   Concerned maybe that the Liberals in all their image building that the are tough on offshore tax evasion, they’ll collect tax for the IRS from Canadians? Me thinks they don’t want to but their minds around the reality that the US may actually try to collect from Canadians on income earned in Canada.

   Near the beginning, the RM said that the 30% withholding could be applied against institutions if customers refused to show documents to prove they are US persons or residents.

   The point would be to prove you aren’t, Madame.

   I’m sure regular Canadians would be happy to hear about that.

7. Banks should be online forced to create a ‘Tax Reporting Profile’ on their online banking websites.

   The subject of notification was mentioned. So you go to your online banking, posted will be your Tax Reporting Profile (deemed US person etc) along with any information reported to the US (or any other Government).

   Someone should have to go through a longwinded process with a bank or the CRA to find out.

8. My frustration when watching the meeting live last Thursday was that portions were being missed because of the buffering. My frustration watching today when I can view the whole damn thing is that the questions and answers were so inadequate and the participants too self-serving, too blasé. My head hurts and my heart aches. Parliament is a total write off … none of them understand nor do they even want to understand. Gotta hope the Canadian court system is not as disappointing. BTW does FATCA become FACTA in French or did the translator just keep getting it wrong?

9. This is worth reposting re: Daniel Therrien’s qualifications for Privacy Commissioner:
   https://iapp.org/news/a/harper-pick-for-privacy-commissioner-may-not-be-the-best-fit/

10. Meanwhile, flagrant cosying up…

    April 18, 2016: “CBC INVESTIGATES 5 years of tax industry parties and receptions with CRA staff — CRA enforcement execs mingled at posh events with tax industry players agency was scrutinizing”

    Duff Conacher, a visiting professor of politics at the University of Ottawa and co-founder of Democracy Watch, says it’s important that the public knows about receptions paid for by the tax industry and attended by public officials.

11. Thanks, EmBee. I’ve put the link into the body of this post.

12. @ calgary411
    I’m so fed up I can’t even bring myself to write a thank you e-mail to Mr. Dusseault for pressing to get this “one off” meeting at which they made it perfectly clear they just want us to “bug off”.

13. @EmBee

    French translation should be the same… more flipping confused people… make it easier for people… just call us 2nd class… save time & letters… we have a social worker as a Revenue Minister…. what next… we have a teenager run the military?

    @Blaze

    *they now seem to also be silent on CRA will not collect for the IRS*

    This is one of my concerns but some people on this mb pooh-pooh me that I am talking nonsense…. We can’t trust our gov’t… they say one thing then do something else… how can u tell when a politician is lying…. when they open the mouths… I stole that from someone… do not remember who posted it…

    Let all who are in the gov’t get heaved out the door bank… see how hard it will be to live without an account… u can’t get your pension without a bank account… yes u can go to a credit union but it is no guarantee u won’t end up in the same sitation again.

14. @USForeignPerson I hope I’m wrong. I fear I’m not.

    The Cons made several comments about not collecting for the IRS. They said it in writing and verbally. Several Cons including the Revenue and two Finance Ministers (Flaherty and Oliver) said it. Cons said it in letters, in the House of Commons, in a news release and in Jim Flaherty’s article.

    I do not remember hearing a single Lib say it. I do not believe either the Finance Minister nor the Revenue Minister have said it. The Minister’s testimony last week would have been a logical time and place to reconfirm that commitment,

    Instead, the Minister seemed to be portraying us as tax evaders. She seemed to be indicating that Canada will cooperate fully with IRS and other treaty partners to combat tax evasion.

    I predicted at Maple Sandbox that we would become scapegoats for the Panama Papers and the KPMG shady deal.

    Is anyone aware of anything Liberals have said about CRA not collecting? (not that it would matter because we know they would probably flip flop).

    I don’t want to increase anxiety more than it currently is, but I think we need ti get an answer on this. Soon.

15. I guess our inglorious Revenue Minister is “just following orders”…

16. I am a bit confused on the disconnect from the Privacy Commissioner in regards to the Charter. Privacy discrimination by national origin not an issue for him? No oath of office including to the Charter here? Perhaps shows contempt of the office for the Charter?

    Agree with @Don, while privacy is a good angle:

    The bottom line is a resident Canadian citizen deemed a US person cannot do what they want with their own money as another Canadian born Canadian citizen.

    If the government is able to frame the issue only with privacy then they are avoiding the heart of the issue.

17. They are intentionally avoiding the Charter issue. They don’t have a heart, so it is easy for them to “avoid the heart of the issue.”

    I fear they are also intentionally avoiding the “CRA does not and will not collect for the IRS…”

18. @Blaze – While providing information not directly “CRA does not and will not collect for the IRS” it certainly is abetting the effort and not being neutral on this issue.

19. The CONS said it because it is in the Treaty. No one can arbitrarily ignore this:

    Article XXVI A
    Assistance in Collection
    8. No assistance shall be provided under this Article for a revenue claim in respect of a taxpayer to the extent that the taxpayer can demonstrate that

    (a) where the taxpayer is an individual, the revenue claim relates to a taxable period in which the taxpayer was a citizen of the requested State, and

20. @Patricia Moon. Sounds to me like the FATCA IGA is breaking the tax treaty for Canadian Citizens. Then the US gov many need to know who is a Canadian Citizen or not.

    Isn’t Canadian residency part of it?

21. @JC

    It is helpful to me to be very clear as to the distinction between the exchange of information and assistance in collection.

    There is nothing in the IGA about assisting with collection. So I don’t believe technically, one could say the IGA “breaks” the tax treaty with regard to that.

    Canadian residence is not the determining factor. Canadian citizenship is. So a landed immigrant with US citizenship would not be protected by this Article. Or a landed immigrant with a third (different) citizenship also would not be protected.

    If one’s information is turned over to the IRS and one was a Canadian citizen at the time of the incurred tax, there is no way for the bank (or even the CRA) to know that at the time of transfer. There is also nothing I am aware of that could prevent the transfer due to being Canadian as well as US (that’s the gist of the problem, eh?). So I presume if the IRS were to contact one and demand payment one could ignore it or reply that it won’t be paid? And the IRS would then contact CRA and so on.

    Here is a letter from CRA in response to a taxpayer on this issue:

    25 July 2012 T.I. 2011-0427221E5 – FBAR penalties

    Principal Issues: Whether US FBAR penalties are included in “revenue claims” defined in Art.XXVI-A(1) of the Canada-US Treaty.

    Position: No.

    Reasons: FBAR penalties are not civil penalties in respect of taxes covered under Art.II of the Treaty.

    https://www.taxinterpretations.com/tax-topics/treaties/article-26a#node-326646
    25 July 2012 T.I. 2011-0427221E5 – FBAR penalties

    XXXXXXXXXX
    2011-042722
    P. T.
    (613) xxx-xxxx
    July 25, 2012

    Dear XXXXXXXXXX:

    Re: Civil Penalties and Article XXVI-A

    We are writing in response to your letter of November 7, 2011, in which you asked for our comments in respect of the application of Article XXVI-A of the Canada-United States Tax Convention (1980) (“Treaty”).

    You have described a hypothetical situation involving an individual who is a citizen of the United States (“U.S.”) by right of birth, and a Canadian citizen by way of naturalization prior to 1995. The individual is a resident of Canada for purposes of the Income Tax Act (“Act”) and the Treaty. We are to assume that the individual has failed to file Form TD F90-22.1 Report of Foreign Bank and Financial Accounts with the U.S. Department of the Treasury as required under the U.S. Bank Secrecy Act. As such, the individual has been assessed a civil penalty (“FBAR Penalty”) in the U.S. for the failure to file Form F90-22.1.

    In this regard, you have asked whether the FBAR Penalty could be considered a civil penalty that is included in a “revenue claim” as defined at paragraph 1 of Article XXVI-A of the Treaty, and if so, whether paragraph 8 of Article XXVI-A would preclude the collection of the FBAR Penalty by the Canada Revenue Agency (“CRA”) on behalf of the U.S. Government.

    Our Comments

    The CRA has previously indicated that Canada would assist the U.S. Government in the collection of interest and penalty in respect of U.S. taxes owing pursuant to Article XXVI-A of the Treaty. However, paragraph 8 of Article XXVI-A provides that Canada will not assist in the collection of a revenue claim from the U.S. Government in respect of an individual who is a Canadian citizen, such as the individual described in your hypothetical situation.

    In addition, we are of the view that a civil penalty, such as the FBAR Penalty, which is imposed under the U.S. Bank Secrecy Act, is not a penalty in respect of U.S. taxes owing. Therefore, it is our view that an FBAR Penalty is not an amount that would be considered a “revenue claim” pursuant to the definition at paragraph 1 of Article XXVI-A.

    We trust that our comments will be of assistance.

    Yours truly,

    Robert Demeter
    Section Manager
    for Director
    International Division
    Income Tax Rulings Directorate
    Legislative Policy and Regulatory Affairs Branch

    As to information returns, Kevyn Nightengale has written:
    http://www.mnp.ca/en/posts/expatriation-the-americans-tax-experience-in-canada
    Expatriation: The American’s Tax
    Experience in Canada
    Kevyn Nightingale and David Turchen*

    Information returns that are required as part of the tax return pose a different
    problem. The United States requires supplementary filing to report foreign (including
    Canadian) trusts, corporations, partnerships, and financial accounts. The
    penalty for failing to file even one of these forms starts at US$10,000.
    As noted previously, an overwhelming majority of Americans in Canada are not
    fully compliant, so these forms have often not been filed. Still, because Canadian
    personal tax rates are significantly higher than US rates, it is rare for such individuals
    to owe meaningful US tax.
    The CRA has discretion as to whether to accept an IRS request for assistance in collection. The CRA has stated that it will not collect penalties for failure to file such information returns on behalf of the IRS on the basis that such amounts are not in
    respect of taxes covered by the treaty.224 A US taxpayer could argue that such action by the CRA would be unconstitutional.225

    Footnotes:
    224 CRA document no. 2011-0427221E5, July 25, 2012.
    225 Andrew Bonham, “FATCA and FBAR Reporting by Individuals: Enforcement Considerations
    from a Canadian Perspective” (2012) 60:2 Canadian Tax Journal 305-54, at 345.

    Of greater concern is what other institutions may be forced to help the IRS collect.

22. Oh man, I watched 30 minutes and can take no more. The chair was unbelievable and the questions were pathetic. It is a lost cause. Why have no other media jumped on the Baby E. story… because they’re owned by power and we are unimportant. Why will no mainstream media cover this travesty. Same reason. Our only hope is the courts. Please witnesses come forward so we can get this show on the road.

23. this fight is useless. breaking the law, privacy breaches, a Revenue minister that is brain dead.
    she was asked about section 15 of the charter of rights which is against the law. She never answered
    the damn question , she keeps flapping her mouth about it’s so important that we do this to help the banks and to help all Canadians.
    on top of that, not one person said hay stupid, answer the damn question .
    you are breaking the law, section 15 of the charter of rights says its illegal. Not one person in that room was smarter enough to get real questions answered. its all fluff. When this goes to court absolutely nothing will happen. The prime mInister has already forced and told the judge that no matter how or what the Canadian law is we will do everything that the United States wants. And no lawyer or Canadian law will change that. we will rip the canadian people to shreds .

24. The Minister’s lack of knowledge is appalling.

    *FACTA – sorry but she is the Minister of Revenue, she ought to know the correct “word”

    * It is another (irritating) talking point to suggest that the 1942 treatyhad any provisions for exchange of tax information. Canada and the US have only exchanged information since 1995 and this was due to the third protocol of the 1980 Tax Treaty. It involved only exchange of information regarding interest of temporary residents in either country. It is just dumb to fail to notice that Canada would have no interest in taxing non-resident Canadians in the US. We say the CDN govt doesn’t understand US tax but it sounds like they do not understand Canadian tax either.

    Too lazy to type out the rest but this comment reflects same thoughts: http://ipolitics.ca/2016/04/14/cra-should-notify-people-when-their-bank-records-are-shared-therrien/#comment-2627597730

    *The first treaty was in 1928 and was limited to the taxation of shipping profits. Then the 1942 Treaty which was expanded a bit. The current treaty was signed in 1980.

25. @JC

    Further, with regard to Canada not collecting on behalf of the IRS:

    Article 22
    1. Subparagraph 8(a) of Article XXVI A (Assistance in Collection) of the Convention shall be deleted and replaced by the following:

    (a) Where the taxpayer is an individual, the revenue claim relates either to a taxable period in which the taxpayer was a citizen of the requested State or, if the taxpayer became a citizen of the requested State at any time before November 9, 1995 and is such a citizen at the time the applicant State applies for collection of the claim, to a taxable period that ended before November 9, 1995; and

    2. Paragraph 9 of Article XXVI A (Assistance in Collection) of the Convention shall be deleted and replaced by the following:

    9. Notwithstanding the provisions of Article II (Taxes Covered), the provisions of this Article shall apply to all categories of taxes collected, and to contributions to social security and employment insurance premiums levied, by or on behalf of the Government of a Contracting State.