Questions on the Order Paper  Information regarding “U.S. persons” can be found under article 1(ee) of the IGA: https://www.fin.gc.ca/treaties-conventions/pdf/FATCA-eng.pdf. In response to part (a), the approximate numbers of records sent to the IRS under the IGA for the years in question are as follows: 600,000 in 2017, for 2016 tax year; 700,000 in 2018, for 2017 tax year; 900,000 in 2019, for 2018 tax year.

Finance committee  They've said, just on FINTRAC alone, they are over one full-time equivalent, and that's in a very small entity that has a high proportionality cost that gets put on it. Again, as a committee, we also see common reporting standards, FATCA. With all these different measures getting thrown onto these agencies, it gets to be a bit much. Director, are you planning to start measuring administrative compliance by industry? If you don't measure it, you cannot manage it.

Finance committee  Sometimes I'm hesitant to advocate for more information sharing where the safeguards are not in place. I wanted to make that comment. Going to the credit unions, we had FATCA, I think it was called, introduced a while ago. The burden on the compliance for credit unions, especially some of the smaller ones, is a lot. How are your members handling the compliance costs in terms of what we require, and do they have the wherewithal to potentially withstand more strengthening of compliance measures?

Finance committee  Banks and other financial institutions may move out. I hear they have common reporting standards and must show FATCA as well as FINTRAC compliance. Those costs are continually going up, and you come here and say you don't track that. I understand your mission is absolutely necessary, noble, and needs to be done, but that kind of attitude doesn't really promote confidence that you're doing this in the most efficient way.

Finance committee  Could you please address why the law was written in such a way so as not to allow the same treatment as under FATCA?

Finance committee  Thank you, Mr. Chairman. The agreement with the United States with respect to FATCA, of course, was a bilateral agreement. The common reporting standard is a similar system in the sense that it involves a requirement on financial institutions to identify accounts that are held by non-residents and to share that information with the CRA, which will then provide it to the tax authority of the person's residence.

Information & Ethics committee  I'll put it at the level of policy objective. That issue, of course, was raised in the context of FATCA, as an example. The first step, I think, is to determine whether the agreement between Canada and another state—here the United States—for tax purposes is trying to achieve a legitimate purpose.

Finance committee  Okay. I just want to put that out. With regard to the FATCA provisions, those are imposed by the government. They are something that this committee will see. They're in the budget implementation act. You have given the suggestion that there is already another regime created for the American FATCA regulations that works well because it acknowledges that not all institutions—particularly the small ones—have a high risk.

Finance committee  With regard to submitting to the CRA your FATCA reports, how many reports did your organization have to produce?

Finance committee  We ask that a test, similar to the 98% test under FATCA, which exempts those institutions that have 2% or less of their assets held by non-residents, be implemented with the CRS legislation. Interior Savings Credit Union has 68,000 retail members, of which only 259, or 0.38% of our membership, have non-Canadian addresses, including the U.S.

Finance committee  That was a very important development, but it was still information on request, meaning you had to have some sense of there being a particular taxpayer who had an investment in a particular place to know to ask the question, which had its own limits. More recently, sort of following the U.S. FATCA legislation, which has its own issues particularly because of U.S. citizenship taxation, the OECD and G20 developed this common reporting standard for the automatic exchange of information.

Finance committee  It is a big mistake for the government to introduce legislation without having some sort of provision à la FATCA where it allows small credit unions to be exempted if they have less than 2% of their assets being held by foreign nationals. It will cause a lot of angst for credit unions. I am thinking particularly of not just the smallest credit unions, where obviously the staff will have to spend more time doing paperwork to submit at the federal government's new behest on these common reporting standards, but also other credit unions which are not structured in the same way as the banks where in Quebec, Desjardins, will have to submit hundreds of applications because they have hundreds of locations.

Finance committee  An attempt was made to try to develop principles and rules that could be applied to minimize those costs to the extent possible. Given the model of the U.S. FATCA approach, which carved out small institutions, as I say, that idea was specifically considered and debated. The prevailing view in the international community was that if small institutions were carved out from the standards, and even though presently they may be little used by non-residents, it could create a pathway.

Finance committee  Okay. This is my last intervention, Mr. Chair, and then I'll let someone else go ahead. FATCA was implemented by the Americans; we really had no say in the matter. However, the OECD requirements are something that Canada voluntarily signed up to. Is that correct?

Budget Implementation Act, 2016, No. 2  Credit unions, as we heard right across the country in pre-budget consultations, have had extreme issues in dealing with some of these FATCA regulations. I believe we heard from Desjardins that they have to submit 300-plus separate reports while some other banks only have to produce one. These commons reporting standards will add to that, particularly to smaller credit unions.