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.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Okay. Would you agree that it's more financial than...? There was a time—
As an Individual
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—
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—
As an Individual
I don't think we're talking about becoming a citizen. I think we're talking about being a citizen.
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.
As an Individual
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.
Conservative
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—
As an Individual
I would take no position on that. You'd have to ask them that question.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. Van Kesteren.
Mr. Adler, please. You have time for a brief round.
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?
Acting Vice-President, Policy and Operations, Canadian Bankers Association
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.
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?
As an Individual
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.
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?
Conservative
As an Individual
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.