FATCA and the Erosion of Canadian Taxpayer Privacy

Report to the Office of the Privacy Commissioner of Canada, April 2014

37 Pages Posted: 6 May 2014 Last revised: 13 May 2014

Arthur J. Cockfield

Queen's University - Faculty of Law

Date Written: April 1, 2014

Abstract

In 2010, the United States enacted a tax reform known as the Foreign Account Tax Compliance Act (FATCA). Under FATCA, all non-U.S. financial institutions, including Canadian banks, must review their records to determine if any accounts are owned by “U.S. persons,” which include U.S. citizens residing abroad and individuals with significant social and/or economic ties with the United States. The United States threatened to economically sanction any foreign country that did cooperate with the new regime. Accordingly, Canada has agreed to implement FATCA via an intergovernmental agreement (IGA) with the United States; at this writing the implementing legislation, Bill C-31, is before Parliament. This report discusses how FATCA and the IGA unduly harm the privacy interests and rights of Canadians in part because detailed financial information concerning hundreds of thousands of Canadians would be transferred to a foreign government for the first time. Canada is getting nothing in return for this privacy giveaway other than the relief of the threatened economic sanctions. The Canadian government should not implement the IGA until these privacy concerns are addressed.

Suggested Citation

Cockfield, Arthur J., FATCA and the Erosion of Canadian Taxpayer Privacy (April 1, 2014). Report to the Office of the Privacy Commissioner of Canada, April 2014. Available at SSRN: https://ssrn.com/abstract=2433198

Arthur Cockfield (Contact Author)

Queen's University - Faculty of Law ( email )

Macdonald Hall
Kingston, Ontario K7L 3N6 K7L3N6
Canada

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