As many of you may have gathered by now, I’m not a Tory, I’m a “Dipper” (NDP supporter) from way back. But I am beginning to like Jim Flaherty. Certainly more than any other Tory in recent memory (with the exception of Jim Prentice, for whom I also have great respect, after his stance for the free vote on gay civil marriage in Canada a couple of years ago).
In today’s mail (remember Canada Post?) I got a three-and-a-half page reply from Flaherty to three emails I’d sent last month. Actually not “snail” mail, it arrived the day after it was dated (but then, I live in Ottawa). It may be a new standard reply now, and others may have received one recently, but there’s a passage in it that I haven’t heard before, on FATCA, which I’d like to pass on, with pride and hope.
I won’t quote or post the whole letter, because much of it is the same as we’ve heard, but there is interesting (for me) new wording and tone that renews my faith in Flaherty. Here it is, minus the paragraph breaks but otherwise un-edited. (I’ve added a couple of asides in parentheses and have underlined three sentences for my emphasis.)
“A related piece of US legislation causing similar concern (my note: similar to the concerns about FBAR and tax filing requirements, also discussed in the letter) is FATCA, which is proposed to come into force on January 1, 2014. To be clear, Canada respects the sovereign right of the US to determine its own tax legislation and its efforts to combat tax evation — the underlying objective of FATCA. In fact, our two jurisdictions co-operate to prevent tax evasion. But FATCA has far-reaching extraterritorial implications, as it would turn Canadian banks into extensions of the IRS and would raise significant privacy concerns for Canadians. We strongly believe this is unwarranted. Canada is not a tax haven and people do not flock to Canada to avoid paying taxes (me: boy is that an understatement, I did my CRA tax return this afternoon – yowch). In addition, we have existing ways of addressing these issues with the US through our bilateral Tax Information Exchange Agreement. We strongly believe that to rigidly impose FATCA on our citizens and financial institutions would not accomplish anything except waste resources on all sides. As such, the Government of Canada has and will continue to express its strong concerns relating to FATCA with the US government. We are actively seeking a solution that both countries will find agreeable.”
The rest of the letter is a repeat of the protections against FBAR penalties, for all Canadian residents, and protections against collection of any US tax liabilities incurred by anyone in Canada who was a Canadian citizen at the time the alleged liability was incurred. And the usual (less impressive) references to the December 7 “guidance” that shows the US has “listened to our concerns,” which I think is a bit overly optimistic. Plus a repeat of the one-page fact sheet about requirements and where to get advice (get a tax advisor, see these websites …). And a repetition that CRA will NOT collect FBAR penalties on anybody, nor US tax liabilities incurred when the victim was/is a Canadian citizen.
But I like the tone of the sentences in the quotation above, especially the underlined sentences. Go Jim, Go!
Stay tuned; we’ll see what the mutually-agreeable result is, if any. But I don’t sense that Flaherty, and by extension the current government, is going to be any kind of pushover on this discussion. “It ain’t over until the fat lady sings.” And as recently as yesterday, our Finance Minister is still standing firm on this.