Canada's Shadow Rev. Min. Warns Gvt against Sellout on FATCA

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Canada's Shadow Revenue Minister Warns Government against Sellout on FATCA!

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OpEdNews Op Eds 10/5/2013 at 10:39:10

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Canada's Shadow Revenue Minister Warns Government against Sellout on FATCA!

James George Jatras for RepealFATCA.com

Washington, DC : At the top of the list of "must have" countries on which the U.S. Treasury Department needs to force submission to the "Foreign Account Tax Compliance Act" (FATCA) is our closest ally and biggest trading partner: Canada. Unless Ottawa agrees to sign on the dotted line to permit enforcement of this ill-conceived U.S. law against its own Canadian institutions and citizens, prospects for compelling the rest of the world to fall into line lose all credibility.

According to Treasury's earlier expectations, Ottawa was to have knuckled under by the end of 2012. That didn't happen , though the Department continues to make increasingly absurd and nonfactual claims that the world is stampeding to sign so-called "intergovernmental agreements" (IGAs) that enlist foreign governments as enforcers for the IRS. The first one to run up the white flag, unsurprisingly, was the United Kingdom, which has already finalized regulations that blatantly enforce this foreign (i.e., American) law on British institutions and citizens (" The International Tax Compliance (United States of America) Regulations 2013 "), at the cost of hundreds of millions if not billions of pounds -- in return for nothing from the U.S . (Can anyone imagine Congress's passing a law authorizing the Treasury Department to issue regulations on American firms and citizens to impost The International XYZ Compliance (China, France, Germany -- take your pick ) Regulations 2013?)

In Ottawa, the Conservative government of Prime Minister Stephen Harper and Finance Minister Jim Flaherty is under strong pressure to follow London's poodle-like example . The problem is, Canada is a country that claims to respect the rule of law, including serious privacy and human rights safeguards , notably under the Canadian Charter of Rights and Freedoms . It is also a country in which a million Canadian citizens , perhaps even more, would be considered "U.S. Persons," whose personal financial information would be sent to the IRS (and then over to U.S. intelligence agencies !) without even a suspicion of wrongdoing.

Standing Up for the Rights and Civil Liberties of Canadian Citizens and Residents

To be fair, Prime Minister Harper and Minister Flaherty are on record as objecting to FATCA in principle. But as with officials of other governments around the world, they have been subject to dire threats of sanctions from the Treasury Department, misguided pleas from some financial sectors that an IGA would lessen the negative impact of FATCA ( it won't ), and a cheerleading section of tax lawyers, accountants, consultants, and software firms anticipating a compliance pig-out . This has seriously distorted Canadian officials' awareness of their available options.

Now comes some serious counter-pressure from the Opposition, which may help clarify where Canada stands. While smaller parties like the Progressive Canadians (no representation yet in the House of Commons) and Greens (one Member, Elizabeth May ) have been commendably forthright in their resistance to FATCA, the major Opposition party, the New Democratic Party (NDP) , has been largely silent, or even passively supportive of FATCA in the mistaken belief it is merely a measure directed against American "tax cheats."

The NDP still hasn't come out against FATCA as such. But in a significant development, Murray Rankin , the NDP's Official Opposition Critic for National Revenue, wrote to Minister Flaherty on September 25 laying out standards that must not be crossed in an IGA. (For denizens of the country south of the 49th parallel who may not be familiar with Canada's parliamentary system, the "Official Opposition Critic" is the equivalent of "Shadow Minister" in the British system -- the Opposition Member of Parliament who would take over the designated Ministry if the NDP " Shadow Cabinet " replaces the Conservatives.)

In his letter, Rankin expresses "serious concerns" regarding Flaherty's negotiations with Treasury to "oblige Canada to enact laws and regulations requiring Canadian financial institutions to comply with this U.S.-based legislation," i.e., FATCA. He also cites the "lack of transparency" and consultation in the " closed door negotiations. " Exactly so. What is being hidden from not only the Opposition but from the public?

In addition,

"New Democrats are concerned with the prospect of a foreign nation unilaterally imposing obligations on Canadian banks to disclose personal information. The Canadian Government has a responsibility to protect Canada's tax base, and while we understand the United States' desire to protect their own tax base, this should not come at the cost of the rights of individuals residing in our own country. Cracking down on tax cheats should occur through international cooperation rather than unilateral action.

"What's more, the secrecy of the negotiations over this agreement has left Canadians in the dark as to the integrity of their personal banking information. The Canadian government should be standing up for the civil liberties of Canadians. Furthermore, the Conservative government must ensure that any agreement reached is fair for Canada.

"In the interest of transparency, fair taxation and respect for privacy rights, we are asking the government to reject any agreement that violates the rights [of]Canadians or that fails to offer Canada equal benefits to those provided to the United States." [emphasis added; the full text of the Rankin letter appears at the end of this bulletin. ]

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