The Green Party of Canada is calling for greater public and parliamentary scrutiny of a recently announced tax agreement between Canada and the United States, stating that it threatens the rights of Canadians and may even violate the Constitution.
On February 5th, Finance Minister Jim Flaherty announced that the United States and Canada had signed an intergovernmental agreement to implement the Foreign Account Tax Compliance Act (FATCA). This U.S. law requires all foreign financial institutions to report the personal financial information of ‘U.S. persons’ living abroad to the U.S. Internal Revenue Service (IRS).
“Although it contains certain exemptions, the agreement negotiated by Minister Flaherty fails to address the most significant threats that FATCA poses to Canadian privacy and human rights,” said Elizabeth May, Member of Parliament for Saanich-Gulf Islands and Leader of the Green Party of Canada. “This agreement also ignores the fact that Canada already has a robust information-sharing regime with the United States, and that Canada stands to gain virtually nothing from it.”
Under FATCA, Canadian banks will be required to search all Canadian financial accounts for the account records of U.S. persons and to report the findings to the Canada Revenue Agency, who will then provide the information to the IRS. In addition to being a significant privacy concern, this would likely be a violation of Section 15 of the Canadian Charter of Rights and Freedoms, which forbids discrimination based on “national or ethnic origin.”
Minister Flaherty and U.S. officials have set a March 10 deadline for public comments on the agreement, after which point the government will bring forward legislation to bring FATCA into effect. Said May: “This deadline should be extended to provide greater opportunities for the public to offer comments on the proposal – There is no reason why public input needs to be rushed on this issue.”
In Question Period Monday, May challenged the constitutionality of the provisions, as they violate s 15 of the Charter, the section that guarantees that all Canadians are equal under our laws. She cited the advice of distinguished Constitutional law professor, Peter Hogg, former Dean of Osgoode Hall Law School who has advised the Conservative administration that the FATCA is not likely to survive a Charter Challenge.
There are an estimated 1 million Canadians with U.S. citizenship or legal status who will be directly affected by this legislation; hundreds of thousands of their family members, employers, and business partners are likely to be affected as well.