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Harper government’s implementation of FATCA raises grave concerns over Canadian privacy and sovereignty

For Immediate Release


July 8th, 2014

Harper government’s implementation of FATCA raises grave concerns over Canadian privacy and sovereignty


OTTAWA - On June 19th, the Parliament of Canada passed legislation as part of the budget implementation act C-31, that incorporates the United States Foreign Account Tax Compliance Act (FATCA) into Canadian law.

This new law forces Canadian banks to share the information of US citizen who have accounts in Canadian banks. It will also mean sharing information of other citizens of Canada who are in financial arrangements with dual citizens, including those with joint bank accounts and business partnerships.

It is a new law in Canada that enforces a US law within our own borders.

It should be noted that there has been no reciprocal agreement; Canadians’ information will be sent south with no tangible benefit in return.

This builds on existing US law requiring Canadians with U.S. citizenship to file income tax returns with the U.S. government, regardless of their current residence status or where they earn the income.

In fact, the U.S. is the only country that bases its income tax filing requirements on citizenship, instead of residency.  As Senator Pierrette Ringuette noted in a speech in the Senate; “It's funny that a country that had a revolution started by the Boston Tea Party based on taxation without services would have legislation to tax citizen non-residents who are not getting services from their government.”

This is an issue that Senator Ringuette has been following closely for several years now. There are a number of dual citizens that live along the New Brunswick-Maine border and they have contacted Senator Ringuette’s office to express their deep concerns over this and other practices related to American gathering of their information.

Senator Ringuette introduced an amendment to the budget implementation act to stop this absurd violation of Canadians’ privacy and sovereignty, but it was voted down by the Conservative majority in the Senate.

In a letter in 2011, the late Minster Jim Flaherty referred to FATCA as “extraterritorial” and that “It would turn Canadian banks into extensions of the IRS and would raise significant privacy concerns for Canadians.”

Concerns over possible violations of the Charter of Rights and Freedoms were raised repeatedly during the committee hearings and in the media, but the government refused to address these concerns. Specifically, it potentially breaches sections 8 and 15(1) of the Charter, especially in light of recent Supreme Court decisions.

Section 8 grants the right to be secure against unreasonable search and seizure and section 15(1) grants the right to equal protection under the law. This law also allows for significant privacy violations without due causes and treats dual citizens as a separate class.

A recent Supreme Court decision has created precedent that even the most basic personal information that would be shared under this law potentially requires a search warrant.

In addition to privacy and sovereignty concerns, FATCA may also have steep consequences for the financial sector, including supressing cross border investment. The complexity and lack of firm guidance is costing Canadian financial institutions. The high compliance requirements may be absorbed by larger institutions, but could prove to be a large burden on smaller ones, like credit unions.

Senator Ringuette released the following statement; “Why are we taking action to enforce American laws in our own country, using our resources, all to benefit US tax collection and work against the privacy interests of our own citizens? It makes no sense; we are the representatives of the Canadian people, not the IRS.

I don’t think this law has been thought out; there remain deep concerns and consequences that need to be further explored and addressed. I would urge the government to delay implementation until we can be assured that this will not have a largely negative impact on Canadians.”


For more information:


Tim Rosenburgh

Office of Senator Pierrette Ringuette

(613) 943-2248




Amendment tabled by Sen. Ringuette on June 18th, 2014



THAT Bill C-31 be not now read a third time, but that it be amended,

(a) on pages 72 to 83, by deleting Part 5; and

(b) on pages 316 to 357, by deleting Schedule 3.