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.
General Director, Tax Policy Branch, Department of Finance
I think that is discussed no matter the content of the opinion.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Okay, so it's all well and good to say, “We went to Justice and we asked them whether this will survive a charter challenge” and not discuss what the survival rate was actually like. It's like saying you got the car tested and it tested out fine, but you only looked at 5% of the car. Yes, you got your car tested, but you got it tested badly.
Our question around this is.... What's unfortunate about this, this process that we're in, is the Government of Canada is so likely to end up in court under this part of the tax treaty that they're signing with the U.S. and it's going to cost the Canadian taxpayer so many millions of dollars and untold number of Canadians the financial grief of going through this. It's like this predictable problem that the government's creating for itself.
Sorry, Chair, but it's ultimately frustrating that all of these things hang in confidence. If it had a good test of its charter-proofness, certainly the government would be proud of it and it's hiding behind the confidentiality screen.
All this does, Chair, is it enshrines into the act itself what Mr. Allen asked Mr. Ernewein with respect to what happens in other practices and other tax treaties.
Why the government wouldn't vote to clarify that the Charter of Rights, the Bill of Rights, the Human Rights Act, the Privacy Act, the Official Languages Act, and the Access to Information Act will supersede anything we sign in this tax treaty is beyond me. If it's redundant, then so be it. Let's have a redundant aspect of a legislative bill. I'm stunned that something so obvious can't be accepted into law.
Conservative
The Chair Conservative James Rajotte
Thank you.
We will go to the vote on NDP-7. Will it be a recorded vote?
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Please.
(Amendment negatived: nays 5; yeas 4 [See Minutes of Proceedings])
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
Mr. Chair, LIB-4 simply ensures that the regulations under this agreement won't come into force for at least a year. That gives government time to inform Canadians about any rule changes so they aren't caught off guard. I think a lot of Canadians said, “Oh, I just found out that I'm a U.S. person.” It just gives them time to adjust to this new regime.
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
A recorded vote.
(Amendment negatived: nays 5; yeas 4 [See Minutes of Proceedings])
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
Very quickly, Mr. Chair, LIB-5 requires the Minister of Finance to table any amendments to the agreement in the House in Commons before they can come into force. It's pretty simple: show Canadians any agreements their government enters into.
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
I can't believe they would vote against that now.
Could we have a recorded vote?
Conservative
Conservative
Gerald Keddy Conservative South Shore—St. Margaret's, NS
Very quickly, we already have a policy on tabling treaties in Parliament that would apply in the case of an amendment to the IGA.
The IGA itself was signed in February 2014. It was not tabled in Parliament, given the need to provide legislative authority for financial institutions to begin new due diligence and reporting procedures as of July 1, 2014. However, we moved quickly to introduce some implementing legislation in Parliament, which we are in the process of debating. We've finished debating. Therefore, the intent of the policy has been met. The case of an amendment to the IGA, under the policy of the government, would provide a waiting period of at least 21 sitting days after tabling, before it takes steps to bring the amendment into force—I mean, the policies into place.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. Keddy.
We'll have a recorded vote LIB-5.
(Amendment negatived: nays 5; yeas 4 [See Minutes of Proceedings])
We'll go to NDP-8.
Mr. Rankin.
NDP
Murray Rankin NDP Victoria, BC
Well, thanks, Mr. Chair.
This is relatively straightforward, although the drafting would make it look complicated. It's simply an amendment I'm putting forward to ensure that if the FATCA is repealed in the United States—and after all, it is a U.S. law in origin, facing its own constitutional challenges down there—the amendment would seek to clarify what would occur in the event that it is struck down in the United States, and ensure that the changes made to implement the intergovernmental agreement would be repealed in such a case.
What would happen as well, incidentally, if the amendment were accepted, is it would restore the pre-existing information exchange, because it deletes references to FATCA measures that are inserted in that paragraph of the IGA.
Once again, it simply addresses the eventuality of a successful constitutional challenge in the United States, of which many are proceeding, and just takes us back to the status quo with our law, if that were to occur in the United States.
Conservative
Gerald Keddy Conservative South Shore—St. Margaret's, NS
Yes, I think on this one I actually understand what Mr. Rankin is trying to bring in. I think when you look at the agreement, Mr. Chairman, if and when the agreement were terminated, the related obligations would also largely be terminated at that time. However, it would not be possible to immediately repeal part XVIII as it imposes obligations that must survive the termination of the IGA. For example, financial institutions would need to retain records for at least six years after the period of the termination.
That's why we can't support it.
Conservative
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Ernewein, can you come in on this one, just on this part XVIII? If this is under a circumstance in which the U.S. eliminates their portion of the agreement, this amendment would obligate Canada to do the same. Mr. Keddy is suggesting that would happen anyway, except for this one piece around six-year record-holding. Can you clarify that for us?
General Director, Tax Policy Branch, Department of Finance
I'm sorry, but I'm not certain that I understand the question, but perhaps I could just make an observation and an attempt to guess at it.
It would be termination of the agreement, I believe the motion that is involved.... So would it be a situation where Canada treats the agreement as having been terminated? In those circumstances then the language about the agreement having been amended from time to time would come in and the force of the legislation in terms of future exchanges of information would cease.
General Director, Tax Policy Branch, Department of Finance
Then perhaps I'm not understanding the question, sir.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I'm bringing this up somewhat in assistance to Mr. Keddy as he was talking about if the U.S. side of FATCA is terminated, there is a consequence obviously on this side. Why would we uphold an agreement that we were forced into somewhat unwillingly and maintain it except for this one section of XVIII where six years of reporting is held by the banks? Can you clarify what aspect of the agreement that is?