This morning has appeared my article on FATCA at the American Thinker: FATCA: A Ticking Time Bomb for the Economy, which I will be posting here later as well. Thanks American Thinker for publishing this and thanks for helping us sensitize readers about what we US expats are going through.
There is now quite another reason to think that FFIs cannot implement FATCA: It is a violation of the Human Rights Code. Renounceuscitizenship reminded me of this particular legal argument. I had commented the following:
The Canadian government has to do something. You can’t simply allow another country to come in and pick your citizens’ and residents’ pockets. It is a theft and a threat to Canadian sovereignty. It is a casus belli.
But furthermore, if the US were to go and occupy Canada and force its citizens to pay tribute, that would be one thing. That would be a consequence of losing a war to a hostile country. But I thought that the US and Canada are allies. You don’t treat your friends this way, only your conquered foes. Obama is a disgrace. I am utterly disgusted by this government.
Agreed. In addition, there is the issue of FATCA and the Canadian banks. The Canadian banks should take a principled stand and not comply with FATCA. Compliance with FATCA is completely optional. If the Canadian banks comply it is because they have made a decision that profits are more important than principles – unless of course the only principle is profit.
To turn over client information to the IRS based on citizenship is arguably a violation of Canadian (Federal and provincial human rights legislation). The Ontario Human Rights codes prohibits discrimination based on citizenship.
Here is what the Ontario Human Rights Code reads in relation to discrimination in relation to services:
Whereas recognition of the inherent dignity and the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world and is in accord with the Universal Declaration of Human Rights as proclaimed by the United Nations;
And Whereas it is public policy in Ontario to recognize the dignity and worth of every person and to provide for equal rights and opportunities without discrimination that is contrary to law, and having as its aim the creation of a climate of understanding and mutual respect for the dignity and worth of each person so that each person feels a part of the community and able to contribute fully to the development and well-being of the community and the Province;
And Whereas these principles have been confirmed in Ontario by a number of enactments of the Legislature and it is desirable to revise and extend the protection of human rights in Ontario;
Therefore, Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:
FREEDOM FROM DISCRIMINATION
1. Every person has a right to equal treatment with respect to services, goods and facilities, without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, marital status, family status or disability. R.S.O. 1990, c. H.19, s. 1; 1999, c. 6, s. 28 (1); 2001, c. 32, s. 27 (1); 2005, c. 5, s. 32 (1).
Obviously a competent lawyer is required to frame the arguments, but I would expect any Canadian bank that starts reporting information to the IRS based on the citizenship of an individual, would and should be hauled in front of the Human Rights Commission to seek a remedy. What remedy? This seems to be in S. 46
46.1 (1) If, in a civil proceeding in a court, the court finds that a party to the proceeding has infringed a right under Part I of another party to the proceeding, the court may make either of the following orders, or both:
1. An order directing the party who infringed the right to pay monetary compensation to the party whose right was infringed for loss arising out of the infringement, including compensation for injury to dignity, feelings and self-respect.
2. An order directing the party who infringed the right to make restitution to the party whose right was infringed, other than through monetary compensation, for loss arising out of the infringement, including restitution for injury to dignity, feelings and self-respect. 2006, c. 30, s. 8.
The banks will have to choose between obeying a U.S. law (and kowtowing to the IRS) or obeying the law of Ontario. They are caught between a rock and a hard place. Surely, it should be made more expensive for the banks to violate the rights of Canadians than to disobey an attempt to by the U.S. government to extend its law into other countries.
Yes, I agree that it is time for the Government of Canada to get involved and put its foot down. The fact is that: nothing less than Canadian sovereignty is at stake here!
Others have made this argument at the Canadian Expat Forum, but I hadn’t actually seen the wording of the Ontario Human Rights Code, which would clearly forbid banks from discriminating against clients because they are citizens of the US, as FATCA requires. Indeed, Canadian banks will have to choose between the laws of Ontario (and Canada) or the laws of the United States.
Ontario Canada lifelong resident with NO USA relatives. My TD bank is harassing me to comply with some IRS rules that TD has to prove my citizenship or “the IRS may withhold some tax ————” on my CANADIAN brokerage/trading accounts. Included with their 2nd mailing request are IRS forms W-9 and W-8BEN. I am not complying to this obvious sovereignty infringment by the IRS….Ron
Furthermore when I phoned the TD broker at the number supplied in their mailings, Their representative after putting me on hold twice, could not answer any of my questions as to the security(s) involved or the potential withholding tax. Very suspicious INDEED!
Thanks for your comment. You are not required to answer the questions and indeed, you can file a human rights complaint. Now on the other hand, the problem is that some of this was the case before FATCA with the brokerage accounts. Yes you will trigger withholdings. That’s bad if you are trading in the US. So if you are Canadian the easiest thing to do is sign the paperwork. However, soon they will be issuing the same forms for every single account holder (even those with simple checking and savings accounts) because of FATCA, so that they can discriminate against the US persons.