Implementation of FATCA Likely Unconstitutional, Says Leading Constitutional Expert

In a letter to the Department of Finance by leading Canadian constitutional expert Peter Hogg, and obtained by Elizabeth May, Member of Parliament, through an Access to Information request, he warns that an Inter-Governmental Agreement (IGA) to implement the Foreign Accounts Tax Compliance Act (FATCA) signed with the United States, or legislation to bring it into force, would likely be unconstitutional and in violation of Section 15 of the Canadian Charter of Rights and Freedoms.

“It is already unthinkable that the Harper Conservatives would consider putting the interests of the United States before those of the Canadian citizens whose lives have been turned upside-down as a result of the FATCA”, said MP Elizabeth May, “but it is worse still that they would do so in violation of the Canadian Constitution.”

Mr. Hogg’s letter is dated December 12, 2012 and was submitted as part of the call for public comments as part of the ongoing negotiations. “To the extent that any implementing legislation adopts provisions similar to those found in the Model IGA, in my opinion, the legislation would violate s. 15 of the Charter,” he writes. “The source of this problem is the fact that the Model IGA requires financial institutions to treat people differently based on such innate characteristics as place of birth or citizenship.”

The Model IGA that is being proposed would compel Canadian financial institutions to disclose the private financial information of their clients to the IRS. This would be, in Mr. Hogg’s opinion, in clear violation of Section 15(1) of the Charter, which prohibits discrimination on the grounds of “national or ethnic origin”.

“Professor Hogg is Canada’s foremost constitutional expert, so this letter should provide some cause for hope to the one million Canadians, including hundreds of my constituents in Saanich-Gulf Islands, who have been threatened by this financial witch-hunt,” said Elizabeth May. “Yet in a political environment where the Harper Conservatives are willing to push through legislation that is likely unconstitutional, as raised last week in the House of Commons, I will continue to be vigilant on behalf of my constituents and all other Canadians caught up in this sorry mess.”

Note: The Green Party of Canada’s backgrounder on FATCA