We'll go to NDP-9.
Mr. Rankin, briefly.
Evidence of meeting #39 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site.) The winning word was amendment.
A video is available from Parliament.
Evidence of meeting #39 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site.) The winning word was amendment.
A video is available from Parliament.
5:20 p.m.
NDP
Murray Rankin NDP Victoria, BC
Thank you, Chair.
I could tell you this is a really simple, straightforward amendment. It simply would add in clause 101 the following to create section 265.1:
Every reporting Canadian financial institution shall send a written notice to the holder of the U.S. reportable account at least 60 days before sending the information concerning the account under the agreement.
It's very straightforward. It would require our banks or financial institutions to provide 60 days' notice to those people who were caught in the FATCA web. There can be no doubt as to the constitutionality of this. Banks are federally regulated. This is a requirement of those institutions to provide notice.
That would, I think, alleviate some of the concern of so many of our fellow citizens who are going to be caught in this law. They are going to be notified that their very sensitive personal information is being sent by our government, the CRA, down to the United States. I think this would be very straightforward. Sixty days' notice is not inconsistent with a lot of other notice requirements in federal law.
5:20 p.m.
Conservative
5:20 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Ernewein and I had a small discussion about this earlier, just in terms of what the impact of this would be.
We have heard testimony from him and from some others, that maybe in the process of a bank inquiring after a client's information, that may not tip them off, but give them the indication that they may be in this FATCA net. That seems a passive way to go about this. If privacy laws are of any interest, and sovereignty is of any interest to my friends across the way, then this simple notification measure here requiring the banks to notify somebody, it's not....
Maybe I can ask this specific question of Mr. Ernewein. Is there any concern that the notification process that we're passing your information on to the CRA, which will go to the IRS, would have some negative...?
We seem dispassionate about the passing of this information. We say the Americans are deeming these people as American persons. We are the conduit. We are agnostic about the amount of taxes that may or may not be collected by the IRS. Is that fair to this point, in terms of the way this agreement is structured?
May 29th, 2014 / 5:20 p.m.
General Director, Tax Policy Branch, Department of Finance
I think it doesn't matter for the sake of the agreement whether we're agnostic or not.
5:20 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Yes, fair enough.
This is a bad thing happening to us and we're trying to figure the best way out of it. No one seems all that pleased, Chair, with having to be in this process. If we could have wished it another way, as Mr. Flaherty used to say, we would have wished for something much better, but the Americans are all in a lather on this thing, so here we are.
My specific question is, if Canadian account holders were notified—here's the notice as is instructed in this amendment—would it be prohibitive of what the U.S. is trying to get done? Would it be cumbersome to the Canadian government in any kind of way?
I'm just trying to figure out what the problem is in notifying a Canadian client.
5:20 p.m.
General Director, Tax Policy Branch, Department of Finance
Just putting aside the question of whether it's legally possible, we talked about that before and I didn't have an answer for you. I guess the question is sort of on the practical feasibility.
I would make note that there already exists, and has for some time existed, reporting requirements in respect of income paid from Canadian entities to non-residents. That information is required to be provided on a form to the Canada Revenue Agency, and we have exchange of information already with many countries, including the United States. That information goes.
As a point of principle, if you're looking to require express notification in this case, I'm not certain why that wouldn't apply more broadly, and that I think could give rise to at least administrative and compliance costs.
5:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Administrative and compliance costs? These are costs borne by the banks, which is what you're—
5:25 p.m.
General Director, Tax Policy Branch, Department of Finance
I'm just offering it as a consideration, that there is a lot of reporting already done and that the expressed notification is not provided today.
5:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I hear that potential offer in terms of perhaps costing the bank that e-mail, because that's what we're imagining this would be, an e-mail sent to a client.
I guess the argument is that if they're already looking at a person's account—there is the administrative cost that the banks have talked about that they're going to bear in trying to sift through this information and find people—the simple notification that their account has been flagged or targeted or whatever you want to say....
Again, for consumer rights and for consumer protection, this seems like a no-brainer to me. If information is being passed on to the bank about a Canadian, or someone who is suspected of being an American one way or another, we simply require the bank to notify that client, period. That's what this does.
5:25 p.m.
General Director, Tax Policy Branch, Department of Finance
As my colleague said, the curing procedures already require contact with a client to find out whether information that indicates a U.S. connection is actually supportive of a U.S. connection. There is that interaction already in many cases.
5:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Again, this is active versus passive. The active approach says that we asked you that question two months ago because of this, as opposed to asking if you have any holdings south of the border, or any innocuous question that may be in the sweep.
Again, for my friends across the way, this seems to be an eminently reasonable, supportable motion to simply have the banks notify their clients if the information is being passed on to a group like the IRS.
There is our case. Let common sense rule the day.
5:25 p.m.
Conservative
5:25 p.m.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Chair, as a quick point, I would suggest that based on what we heard before, proposed subsection 265(5) is not passive; it is an active contact with the client, so we won't be supporting it.
5:25 p.m.
Conservative
5:25 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Yes, please.
(Amendment negatived: nays 5; yeas 4 [See Minutes of Proceedings])
5:25 p.m.
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
Mr. Chair, LIB-8 prohibits Canadian financial institutions from filing information returns under the agreement about accounts held by Canadian residents or Canadian companies, estates, or trusts.
5:25 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you very much.
We'll go to the vote.
Is it a recorded vote?
5:25 p.m.
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
A recorded vote, please.
(Amendment negatived: nays 5; yeas 4 [See Minutes of Proceedings])
5:25 p.m.
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
Mr. Chair, LIB-9 delays the coming into force provision for the enhanced international information reporting section by one year.
5:25 p.m.
Conservative
The Chair Conservative James Rajotte
We'll go to a recorded vote on LIB-9.
(Amendment negatived: nays 5; yeas 4 [See Minutes of Proceedings])
We shall go to the vote on clause 101 and I'm assuming it's a recorded vote, then.
5:25 p.m.
NDP