Finance Committee on May 29th, 2014

[A voice]

Not under this agreement....

[The Chair, Conservative, James Rajotte]

Through the chair. Order.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Let's be clear that anyone who's solely a Canadian citizen is not caught up in this. Yes, if they're married to an American and they have a joint account, there's some possibility, but the reality is anyone who is solely a Canadian citizen is not caught up in this. If you're a Canadian citizen married to an American and you don't have a joint account, you're not caught up in this.

This, again, is a tax for U.S. citizens. If you're the son or the daughter of an American and you've been born in Canada outside the jurisdiction of the United States, you're not automatically a U.S. citizen. What I'm hearing from the opposition is somehow you are. You are absolutely not. You have to apply for U.S. citizenship on or before your 18th birthday and it's not a guarantee. It's an application form.

Let's be clear that without this agreement, this law is in place anyway in the U.S. These people are subject to the tax. We don't have to like it. We don't have to agree with it. That is not the point. We have to find a way to make this at least acceptable that if these individuals want to travel to the U.S., they don't get flagged and picked up at the U.S. border, that they're not subject when that happens to a 30% withholding tax in their personal bank account, and that the financial institution that holds that bank account is not subject to a 30% holding tax.

There's nothing nefarious there. This is a very complicated process that we're trying to find a reasonable way, through the FATCA agreement and through the IGA, to work through. To be fair, I think the officials have done a very good job at doing that.

In closing, Mr. Chair, I want to make it clear once again. There's a lot of talk from the other side, and I'm sure it just happens to be language, a slip of the tongue. Canadians know that only if you're a dual citizen will you be caught in this. And only in the rare possibilities of those individuals who may have a joint account are you caught in this. But as for the children of American parents, as was mentioned by Mr. Rankin, or an American mother or an American father born in Canada, they're not automatically American.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Keddy.

Mr. Rankin, please.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair.

I've certainly spoken with a woman in Calgary who was a U.S. person although a Canadian for many years, whose son was born in Canada. She is concerned that her son does not have the mental ability, because he has a mental disability, to renounce his U.S. citizenship. He didn't apply in the United States before his 19th birthday. He's deemed to be a U.S. person under a foreign law. He's a fellow Canadian, and he's caught up in the FATCA web.

I don't understand why we as a sovereign country have to simply go along with this law, presumably to protect the banks. I realize the importance of the economy and the like, but this is a human rights issue, Mr. Chairman.

We've heard testimony as well from Professor Cockfield who was here at our committee who pointed out:

...by entering into the IGA we are in compliance. That has bought us time. The July 1 withholding tax, as I understand it, as a matter of technical law, will not kick in because we've complied. We're a democracy, a sovereign country. We're investigating certain concerns surrounding the IGA, and it will be implemented at a later date.

Mr. Chairman, there's plenty of time for us to get this right. To have it rammed through in an omnibus budget bill without proper time to scrutinize such a complicated piece of legislation with such impact on our fellow Canadians is simply wrong.

[The Chair, Conservative, James Rajotte]

Thank you.

I will take the vote then on NDP-6.

You want a recorded vote on NDP-6.

(Amendment negatived: nays 5; yeas 4)

As I mentioned, we cannot proceed with LIB-2 as it was identical to NDP-6. Therefore we will go to LIB-3.

Mr. Hsu, will introduce it.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Liberal amendment LIB-3 ensures simply that Canadian law will take precedence over this agreement with the United States regarding FATCA and not the other way around.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll have a vote on LIB-3.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

I would like a recorded vote.

(Amendment negatived: nays 5; yeas 4 [See Minutes of Proceedings])

[The Chair, Conservative, James Rajotte]

Colleagues, we will now go to PV-1. As per our agreement, we'll allow Ms. May one minute to introduce her amendment.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Sorry, Mr. Chair, whenever it's put that you're doing me a favour by insisting I come here due to a committee amendment that deprives me of my rights to report stage, it makes me feel I have to put on the record once again that I'm here because of a motion passed that was scripted in PMO that was put simultaneously through 20 committees and deprives me of my rights at report stage.

So, yes, I'm happy to be here.

[The Chair, Conservative, James Rajotte]

Just for clarification, Ms. May, I never said “do a favour”; I simply said as per the agreement we have with the committee. As the chair, I follow the agreement by the committee so that is what I'm doing.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

And I'm following the agreement by the committee, and that's why I'm here instead of submitting my amendments at report stage when I would have more adequate time to speak than the one minute per amendment I have here. But thank you, Mr. Chair. I don't want to cause any trouble. I'm very grateful for all the lovely people around this particular table. I have a problem with the process, not the people.

This particular amendment, Mr. Chair, seeks to do the same thing by different means. We have under proposed section 4 at page 73 a provision that is overly broad and could be interpreted to mean that any inconsistency between this agreement and the provisions of any other law, that the FATCA agreement would supersede any other law. That could include the Privacy Act of Canada. It could include the Charter of Rights and Freedoms. We don't know what other laws can be superseded by FATCA.

In an effort to ensure we are sufficiently narrow, I think to meet the intent of the section, my amendment removes “or any other law” in clause 99. To just omit the words “or any other law” narrows it to inconsistencies that relate to the articles of the convention and the Canada-United States Tax Convention Act from provisions of this act.

It's a clarifying amendment. I think it should be very helpful since, as we know, the current administration says the purpose of this act is not to overturn Canadian law.

[The Chair, Conservative, James Rajotte]

Is there further discussion?

Mr. Cullen.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

I want to speak to the point in this amendment, but it's so much of a procedural option I was feeling somewhat for our interpreters because as Ms. May has 60 seconds to get all that out, the speed with which it comes is challenging. I feel somewhat unclear. I seek from the committee another minute to allow her to explain it more fully, if that's possible. I know we are guided by this agreement that we have within all the parties, but committees can also dictate with unanimous consent virtually anything. This is not an interruption of the chair's prerogative.

[The Chair, Conservative, James Rajotte]

It's not my prerogative. How much time are you proposing for each?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Another minute or two. I was just looking through the other amendments that have been put forward by the Green Party, and this seems to be one of the central ones. If that's the case, just looking through our broader list, there are some 12 or 13 in total, but this seems to be a pivotal one.

[The Chair, Conservative, James Rajotte]

For clause 101, I was going to allow Ms. May to speak for an extended period of time to all of her amendments, or she can speak individually to each one.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

I see.

[The Chair, Conservative, James Rajotte]

I am guided by the committee on this, and there was nothing in the motion with respect to—

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

It's just to explain, because this is a clarifying amendment, and I want to feel clear about what it is I'm voting for or against, if that's all right.

[The Chair, Conservative, James Rajotte]

Is there unanimous consent to have another minute or two?

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

No.

[The Chair, Conservative, James Rajotte]

If I don't have unanimous consent, I don't have unanimous consent. I'm guided by that.

Speak to the amendment itself, then, Mr. Cullen.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Again, it's somewhat challenging for me to speak with clarity to it. Maybe Mr. Rankin could help us out. I don't see why a minute was so difficult over a several hour process.