Evidence of meeting #35 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

John Richardson  As an Individual
Darren Hannah  Acting Vice-President, Policy and Operations, Canadian Bankers Association
Brian Kingston  Senior Associate, Canadian Council of Chief Executives
Chantal Bernier  Interim Privacy Commissioner, Office of the Privacy Commissioner of Canada
Sean Bruyea  Retired Captain, Columnist, Media Personality and Academic Researcher, As an Individual
Cyndee Todgham Cherniak  Chair, Commodity Tax, Customs and Trade Section, Canadian Bar Association
Shannon Coombs  President, Canadian Consumer Specialty Products Association
Gordon Lloyd  Vice-President, Technical Affairs, Chemistry Industry Association of Canada
Dominique Gross  Professor, School of Public Policy, Simon Fraser University, As an Individual

4:25 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Okay. Would you agree that it's more financial than...? There was a time—

4:25 p.m.

As an Individual

John Richardson

No, I would not agree at all. I think that's completely wrong.

The way Americans in Canada now experience American citizenship is an endless succession of threats, of penalties, from the U.S. government. Let me put it to you this way. There's another country that uses citizenship-based taxation. It's a country called Eritrea. Now let's do a comparison. Theirs is benign. They want a 2% tax. My guess is that most Americans abroad would pay a 2% tax—

4:25 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Sorry to break in, but I don't think too many people would want to become citizens of Eritrea as opposed to being American citizens. I live close to the border too. I remember times when—

4:25 p.m.

As an Individual

John Richardson

I don't think we're talking about becoming a citizen. I think we're talking about being a citizen.

4:25 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

I would agree with that.

I guess here's what I'm trying to understand. Because there were some suggestions made, as my colleague pointed out, that those who really had no ties to the United States would be swept into this, as opposed to those that maybe have set up residency here in Canada. We welcome them. I think Americans are great people. As well, I have relatives in America too.

But there's a difference between that being the case and somebody who was born and raised in the States and, for whatever reasons, chose Canada for its dual citizenship, but still has an affiliation with the United States, and one that's rather fond, as opposed to maybe a draft dodger or something.

4:25 p.m.

As an Individual

John Richardson

Absolutely. This is the whole problem: when we talk about Americans abroad, we tend to be talking about those who the U.S. defines as Americans abroad.

4:25 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

You'd agree that it is a privilege....

4:25 p.m.

As an Individual

John Richardson

I beg your pardon?

4:25 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Would you agree, that for most people, it is a privilege to be an American citizen and have the opportunity to have—

4:25 p.m.

Conservative

The Chair Conservative James Rajotte

Okay. Please give a brief response.

4:25 p.m.

As an Individual

John Richardson

I would take no position on that. You'd have to ask them that question.

4:25 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Thank you.

4:25 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Van Kesteren.

Mr. Adler, please. You have time for a brief round.

May 14th, 2014 / 4:25 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Thank you very much, Chair.

Thank you, witnesses, for being here today.

I do want to clarify one thing before I begin my questioning. I just want to clarify Mr. Brison's selective recollection of history. He made a number of points about our prime ministers' relationships with U.S. presidents. Let me highlight two from the Chrétien years. One was when the director of communications in the Prime Minister's Office referred to President Bush as a moron. The other one was post-9/11, when Prime Minister Chrétien said that U.S. foreign policy might be part of the causes of terrorism. Those are two highlights, in fact, of the Canada-U.S. relationship that existed under Prime Minister Chrétien. I just wanted to clarify that for the record.

Let me ask Mr. Hannah the following. Given the onerous regulations of FATCA, we've seen that a number of foreign financial institutions, such as HSBC, Deutsche Bank, and Credit Suisse, have been closing brokerage accounts for U.S. citizens. To your knowledge, was that ever contemplated by Canadian banks as an option?

4:25 p.m.

Acting Vice-President, Policy and Operations, Canadian Bankers Association

Darren Hannah

It was not, to my knowledge. In fact, when you read the intergovernmental agreement, the preamble of it states that one of the objectives of the agreement is to make sure that all Canadians have access and are able to sustain access to financial services. That's in fact one of the objectives of entering into the intergovernmental agreement: to guard against what you've just talked about.

4:25 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Very good.

Opponents of FATCA—and I'll ask this of Mr. Richardson—have just hired Jim Bopp, who is renowned for his defeat of the Supreme Court in McCain-Feingold. Can you comment on how perhaps the U.S. constitutionality of FATCA is in question?

4:25 p.m.

As an Individual

John Richardson

Okay, but there are really two parts to your question. The first would be the FATCA legislation itself. I think what's going on in the United States is not so much on the constitutionality of the enabling FATCA legislation, but the way U.S. Treasury is trying to implement it with a number of intergovernmental agreements. I think Professor Christians was talking about these yesterday; she didn't understand what they were, but they are clearly in no way authorized by the enabling legislation.

Furthermore, I might add that it's amazing to me that Canada or any other country would sign an IGA obligating them to do anything when in fact the clear terms of the agreement obligate the United States to do nothing. As I understand it, the primary constitutionality has to do with the use of the sort of pseudo treaty provision, or whatever it is, to essentially enable law that isn't authorized by the governing FATCA legislation.

4:30 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Do I have more time?

4:30 p.m.

Conservative

The Chair Conservative James Rajotte

You have about one minute.

4:30 p.m.

Conservative

Mark Adler Conservative York Centre, ON

In your assessment of the U.S. constitutionality of FATCA, would it survive—and I know you can't say one way or another—a U.S. constitutional challenge? What are the implications of that afterwards if it doesn't?

4:30 p.m.

As an Individual

John Richardson

What are the implications for who?

4:30 p.m.

Conservative

Mark Adler Conservative York Centre, ON

I mean for the United States—

4:30 p.m.

As an Individual

John Richardson

Oh, well...

4:30 p.m.

Conservative

Mark Adler Conservative York Centre, ON

—and then for those U.S. citizens here in Canada.

4:30 p.m.

As an Individual

John Richardson

It's very significant for U.S. citizens in Canada, because there are two parts of FATCA. The first is the part that deals with the banks, and the second part, which nobody ever talks about, has enhanced and very stringent penalty-laden reporting requirements for U.S. citizens abroad requiring them to disclose an unbelievable amount about their lives and their financial assets. Certainly that part of it would fall as well.