Canada-U.S. Relations  Mr. Speaker, I was taught by Peter Hogg as well. I got an A in the tax course. The question is an important one. It is important for about a million Canadians who also happen to be citizens of the United States. The Americans initially proposed that there would be a 30% withholding tax and there would be direct reporting by Canadian banks to the IRS.

Finance committee  Minister, yesterday you told the House that when it comes to U.S. taxes owed by Canadians under FATCA, the CRA will not assist the IRS in collecting U.S. taxes. If this is the case, why does your budget bill include penalties against dual Canada-U.S. citizens who fail to provide their U.S. tax identification number to the Canadian government?

Extension of Sitting Hours  Things that are deeply important, like FATCA, the agreement with the United States to disclose up to one million Canadians' tax information to the IRS, get minutes of discussion. Yet we have prolonged hours on things that we agree to. That is all under the guidance of the Conservative House leader of the Conservative government.

Economic Action Plan 2014 Act, No. 1  With respect to this budget bill, because that is what we are dealing with, while I am tempted to get into the larger economic issues that the hon. member talked about, what we have in front of us tonight is a bill of over 360 pages that affects more than 60 laws currently on the books. One of the aspects buried within this bill is a tax treaty with the United States. The U.S. is our largest trading partner, and it is the most significant tax treaty that we could see. I wonder if the member has any misgivings at all about the implications for the up to one million Canadians who would be impacted and have their personal tax information sent on to the IRS without their even knowing.

Finance committee  There may be a market reality to this that the banks are going to hear complaints. Because the person who believes themselves and acts and operates like a Canadian citizen, the first letter they get from the IRS saying they owe back taxes under this new intergovernmental agreement that they have with Canada, that Canadian is going to talk to their bank and say how did they possibly get my banking information in the first place?

Finance committee  Another point is that many low-income families don't file returns. They don't get the GST/HST refundable tax credit, for instance. The IRS at one point—and it's persisting to this day—started what's called the VTA program, the volunteer tax assistance program. That was an institutional mechanism.

Finance committee  Mr. Chair, LIB-7 enables the Minister of Finance to establish a Canadian form for people to fill out instead of requiring the use of IRS form W8. The agreement between the two governments makes it mandatory for Canadian financial institutions to approach Canadian account holders who might be U.S. persons and puts the burden of proof on them to fill out this form and declare they are not U.S. citizens and are not subject to U.S. tax.

Economic Action Plan 2014 Act, No. 1  It is a fact that the government signed an agreement with the United States that will require U.S. citizens living in Canada to regularly file U.S. tax returns and report their property and income to the IRS. Also, Canadian banks must report to the IRS on accounts held by clients with U.S. citizenship. We are creating a problem here. As we heard from other people, this measure brings up concerns about privacy and sovereignty.

Economic Action Plan 2014 Act, No. 1  It is an agreement that relies on the existing tax framework under the Canada-U.S. tax treaty. CRA will not assist the Americans, it will not assist the IRS, in collecting U.S. taxes. Also, there are no new taxes being implemented through FATCA, and no new taxes that Canadians need to worry about.

Finance committee  Right, okay. The Conservative government keeps saying that they're not assisting with U.S. tax collection. It seems to us rather absurd when you consider that they'll be systematically gathering information and spending millions of Canadians' tax dollars to send this information to the IRS.

Finance committee  The CCCE supports the government's decision to enter into an intergovernmental tax information sharing arrangement with the U.S. The agreement will ensure that Canadians are not exposed to punitive U.S. withholding taxes on income from their investments under the Foreign Account Tax Compliance Act, or FATCA.

Finance committee  Quickly, Canada's skilled trades workers are inherently less likely to travel for work than workers from the United States. Funnily enough, the IRS allows deductions for travel to obtain temporary work against income. Here is an opportunity to make Canada's workforce more productive and reduce taxes for everyday Canadians. I remain available for your questions.

Finance committee  Internal Revenue Service. The CRA will then exchange the information with the IRS through the provisions of the existing Canada-U.S. tax convention. The 30% FATCA withholding tax will no longer apply to retail clients of Canadian financial institutions. So what does this all mean for bank customers in Canada?

Economic Action Plan 2014 Act, No. 1  Speaker, I thank my colleague from Saanich—Gulf Islands for raising the issue of the Charter of Rights and Freedoms, because we in the Liberal Party are also concerned, based on what we have seen from constitutional experts, that there may be violations of the charter. Let me get to my question, which deals with FATCA. As we know, under FATCA, Canadian banks must report to the IRS the accounts held by clients who happen to have U.S. citizenship. In Canada there are about a million of them. Otherwise they face the prospect of a 30% withholding tax on their U.S. income.

Finance committee  Both banks and their clients would have been subject to a 30% withholding tax. However, with the agreement in place, this will not happen. The CRA will not assist the IRS in collecting U.S. taxes, and—this is very important—no new taxes will be imposed. Nor will financial institutions in Canada report any information directly to the IRS.