Dear Mr. Campbell,
As citizens and residents of Canada, we are strongly opposed to the Canadian Bankers Association's (CBA) recently-stated advocacy for an intergovernmental agreement (IGA) that would allow the government of the United States -- through the Foreign Account Tax Compliance Act -- to impose its tax laws in Canada.
Such an agreement would represent a gross violation of Canadian sovereignty and would violate the rights of Canadian citizens and residents under the Charter of Rights and Freedoms, the Canadian Human Rights Act, the Personal Information Protection and Electronic Documents Act, and other legal guarantees. The CBA's claim that an IGA would mitigate these violations in any meaningful way is illusory.
There are an estimated one million people in Canada who have, one way or another, connections to the U.S. that would place them, through FATCA, on the U.S. Internal Revenue Service's radar screen. Add in family members, who are also caught up in this net, and the one million gets closer to four million -- that's nearly 12% of the Canadian population!
We implore the CBA to use its considerable influence and resources to insist that the Canadian Government categorically reject Washington's demands and to lobby for FATCA's repeal by the American Congress. We are writing now because within the past few weeks, CBA officials have confirmed that despite your valid and well-known concerns about FATCA, they now believe that Canadian banks have no choice but to comply, and that an IGA is the best way to facilitate compliance.
This has been spelled out publicly in two items posted on the website of the Isaac Brock Society (IBS) on October 18 and 19, 2013. We note especially the following excerpts (the full texts of the CBA postings appear at the end of this letter for your reference):
From the October 18 posting on IBS :
"The CBA and banks in Canada have been standing up for bank customers and voicing concerns with FATCA for a number of years. . . . We also went to Washington to meet with IRS and U.S. Treasury officials and Canadian Embassy officials. Last year, the CBA also made a presentation in Washington at public hearings before Treasury and the IRS and our president spoke out against FATCA in speeches in Calgary and Vancouver as well.
"We submitted an opinion piece with our concerns about FATCA to the Washington Post and the Wall Street Journal. It did not get published.
"Unfortunately and despite worldwide efforts, U.S. officials have no intention of repealing FATCA. So, governments around the world have decided that developing bilateral intergovernmental agreements (IGAs) with the U.S. is the best way to ensure that the domestic rights of their citizens are respected while still sharing relevant taxpayer information bilaterally. Once the Canada/U.S. IGA is finalized, it will be reflected in Canadian tax law and financial institutions will have to abide by these requirements.
"We believe this is the best approach and support the government's actions because the alternative would potentially expose Canadians to punitive U.S. withholding taxes on income from their investments, including retirement income."
From the October 19 posting on IBS:
"We agree with your opposition to FATCA as we have said all along. We have raised those concerns on numerous occasions with the U.S. Treasury, the IRS and other U.S. officials in both public and private meetings.
"The U.S. government is not going to repeal FATCA and the Canadian government is negotiating an IGA with the U.S.
"We have made our concerns about FATCA known to the Canadian government, but it is now up to them to negotiate an IGA that will hopefully address your concerns and ours and balance out Canadian law and rights with the requirements of FATCA. We have no control over the negotiations or the content of the IGA and neither do the banks or other financial institutions.