March 28, 2016 • No. 10 | PDF Previous Issues

Canadian Open Dialogue Forum 2016

The Need to Discuss the Government’s
Program for “Real Change”

Government ministers, the Premier of Ontario, CEOs and figures from neo-liberal think tanks will gather from March 31 to April 1 in Ottawa for the “Open Dialogue Forum 2016.” The Forum website says it will focus on “open government, open dialogue and transforming the way policy is made in the 21st century.” This is part of the Liberal government’s electoral promise to bring about “Real Change.” The Speech from the Throne said the reforms the government will enact are for “government to do different things, and to do things differently.” These “things” were said to be so that Canadians are “able to trust their government;” have “leadership that is focused on the things that matter most to them;” and have the government “working together in the service of all Canadians.”

The aim of the exercise called Open Dialogue and the bafflegab surrounding it is to permit the Liberal government to create an impression that it is creating a different, progressive relationship between itself and the people, and that this relationship changes the way that government decisions are made for the better, consistent with the needs of the 21st century. Put another way, the Liberal government would like to mobilize social forces to disinform political movements of the people for change. It is a massive exercise in disinformation aimed at smashing the cohesion of the people and their own independent political stands which contribute to resolving the crisis in which society is mired in their favour.

Discuss what all this means amongst your peers. Keep in mind that to create the “sense of ownership” the Liberal government speaks about, it is promoting a conception of stakeholders with whom they consult, deliberate and collaborate which is very narrow and apolitical. “Canadians” in this conception are not citizens and residents linked to the body politic in very concrete sorts of ways. They are an abstraction which is invited to take part in all sorts of one-on-one online initiatives designed to give the impression that they are being listened to, their views really count and governments can be trusted to represent them and take them into account.

Evidence of how this works was provided by similar such “consultations” on the neo-liberal Comprehensive Economic and Trade Agreement between Canada and the European Union (CETA). When the exercise was over, Minister of International Trade Chrystia Freeland declared that she heard “no opposition” to the deal. The protests of the working people from all walks of life across Canada and in Europe against this deal and their arguments do not exist because she says they do not exist. According to the government, there is nothing more to be said on the matter.

It is important that Canadians seriously take note of what the Liberal government and private organizations say they seek to achieve and the nature of the changes to political arrangements and institutions. This includes the introduction of proportional forms of representation to the electoral process. The first measure is to reject the way the Liberal government communicates with the people — what it calls individuals and “groups” — and how it is going about enacting its reforms.

What Problem Is the Liberal Government
Trying to Solve?

A $795 per ticket two-day conference on “Open Dialogue” is to be held in Ottawa from March 31 to April 1. The “Canadian Open Dialogue Forum 2016” is organized by neo-liberal think tank Canada 2020 and web consulting firm PubliVate. It follows Canada 2020’s collaboration with the Center for American Progress on a reception for Prime Minister Trudeau during his visit to Washington, DC from March 9-11 and its Ottawa Forum 2016 foreign policy conference with the Centre for International Policy Studies held in January.

“Open Dialogue” is part of the larger umbrella of what is called “Open Government.” “Open Government” theorists claim that its most successful practitioner is the UK Conservative government. This is the model proposed for Canada as well and provides insight into the reforms the Liberals say they will implement to the political process and government institutions. “Open Dialogue” is the method through which the Liberals will claim legitimacy for their decisions.

Coupled with other major initiatives such as “Deliverology” and the holding of “consultations” via e-mail, “Open Dialogue” does not address the need of the polity for political renewal but on the contrary prides itself for its successful concentration of political power in fewer and fewer hands. Having taken over control of Canada’s institutions, private monopoly interests are using their stranglehold on power to enact sweeping changes without the explicit endorsement of the people using outright fraudulent neo-liberal marketing methods of manipulation. The very fact that what is called “Open Dialogue” is being promoted at a private forum makes it highly suspect.

The “Open Dialogue” forum is focused on “open government, open dialogue and transforming the way policy is made in the 21st century.” It claims to bring together “decision-makers, academics and public engagement practitioners from the public, private and non-profit sectors to advance understanding of open dialogue.” It will come as no surprise that the participants are a select few who are part of the neo-liberal global trend which presents itself as being “progressive” — a euphemism for pragmatism which calls itself neither “left” nor “right” but a “Third Way” which can deliver an elusive “shared prosperity” between both the rich and the working people.

The stated aim of the conference is to bring together “leaders in open government and open dialogue to share experiences and chart a course towards a more empowering dynamic between stakeholders and government.” The use of the word “stakeholder” is a throwback to the days when British Prime Minister Tony Blair usurped power in Britain in an electoral coup in 1997, destroyed the old Labour Party and created “New Labour” and proclaimed the “Third Way.” Already in 1994 Blair had promised to turn the UK into a “stakeholder society,” contending that society is not composed of classes but of “stakeholders” whose interests must be balanced. Its one nation politics like those of the Trudeau government today was to convince the working people that they, like the rich, have a “stake” in capitalism and the success of private monopoly interests and their political representatives or can at least get a fair deal within it.

The conference aims to produce “a draft statement of core principles to help advance open dialogue.” The government has already indicated it will adopt an Open Dialogue Initiative.

What problem is the Liberal government trying to solve with this “Open Dialogue” method? The Marxist-Leninist Party of Canada calls on its members across the country to inform themselves about what the government is up to with its program of “Real Change.” The MLPC is of the opinion that the information which is available to the public is cause for alarm. It shows that the problem the Liberal government is trying to solve is how to concentrate political power in fewer and fewer hands. It goes against everything the people of this country stand for. The fact that it is all done on the basis of neo-liberal methods which market fraudulent definitions of democracy, transparency and good government are matters of great concern. In this and subsequent issues, Renewal Update will provide all-sided information on what the Liberal government is proposing including pertinent background information.

The Liberals Are Too Clever by Half

If someone is too clever by half  it often means they are irritatingly devious and manipulating, rather than actually very clever.

Dictionaries define such people as annoyingly proud of their intelligence or skill and in danger of overreaching themselves. The implication is that others see through the trickery, the person is smug and in the end only fools himself or herself. The issue of course, is that these people who are too clever by half have seized power by manipulating the electoral process. They use their positions of privilege and power to serve the private interests to whom they are beholden while the people are deprived of exercising any control over their decisions. There is an urgent need to organize the people in definite bases such as places of work, educational institutions, neighbourhoods and where seniors gather, to work out how to deal with this egregious usurpation of power for private gain.

Definition of “Bafflegab”

The word bafflegab aptly describes how Prime Minister Justin Trudeau, his main counsellors and Ministers speak, as well as the communication methods used by the think-tanks and experts the Liberal government engages with. The buzzwords and buzzphrases are addressed to an in-crowd with vested interests in the successful sale of a pre-determined product, all designed to disable the human factor/social consciousness but make you feel good about it.

The word bafflegab was coined in the early 1950s by Milton A. Smith, assistant general counsel for the U.S. Chamber of Commerce. The simplified definition is “incomprehensible or pretentious language, especially bureaucratic jargon.” Using bafflegab himself, Smith defined it as “multiloquence characterized by consummate interfusion of circumlocution or periphrasis, inscrutability, and other familiar manifestations of abstruse expatiation commonly utilized for promulgations implementing Procrustean determinations by governmental bodies.”

To understand what it means, one just has to look at how the government speaks and get to the bottom of what it is really doing. It is not good.

For Your Information

The Open Dialogue Forum

The Canadian Open Dialogue Forum 2016 is “a new initiative for Canada 2020 — as part of a multi-year project led by Don Lenihan focused on open government and engagement.” Lenihan was formerly Chair of the Ontario Liberal government’s Open Government Engagement Team which produced a document called Open By Default — A new way forward for Ontario. Lenihan has also authored a number of articles on Open Government and Open Dialogue including with Carolyn Bennett, now Minister of Indigenous and Northern Affairs, and Suzanne Legault, Information Commissioner of Canada.

Lenihan and others previously proposed the creation of a new Open Dialogue Centre under the authority of the Treasury Board, which would “scout out departments that were planning to launch a significant consultation initiative.” Scott Brison, President of the Treasury Board, is the top minister appearing at the Forum. The 2016 federal budget tabled March 22 also pledges “$11.5 million over five years to double the Treasury Board Secretariat’s budget for open government activities. This funding will allow the Treasury Board Secretariat to enhance its capacity to support engagement with Canadians, to design and deliver an ambitious open government strategy and to accelerate the provision of digital content,” the budget says.

Other participants in the Forum include Minister of Public Services and Procurement Judy Foote; Ontario Premier Kathleen Wynne; Ontario Deputy Premier Deb Matthews; former Clerk of the Privy Council Wayne Wouters, various other figures from the federal, Ontario and BC Liberal governments; representatives of neo-liberal think tanks and the “Open Government Partnership” NGO; and executives from private business interests including tech monopolies OpenText, Intuit and Facebook. It is sponsored by most of the organizations and governments above plus Rogers, Google and IBM.

How the Government Defines “Open Dialogue”

The federal government’s official Open Dialogue web site defines this method as “the opportunity for all Canadians to weigh in and help guide the Government of Canada’s efforts towards increased transparency, public engagement, and improved access.” Don Lenihan, the Open Government expert organizing the Open Dialogue 2016 Forum in Ottawa March 31 to April 1 says Open Dialogue “calls for greater public involvement in policymaking, especially through digital tools.” Based on the Ontario experience he notes that “different types of dialogue processes involve different degrees of public participation; and, presumably, different ones are suited for different purposes.”

The definition from Open by Default, the report from Lenihan’s Ontario Open Government Engagement Team is “using new ways to provide the public with a meaningful voice in planning and decision-making so government can better understand the public interest, capture novel ideas and partner on the development of policies, programs and services.”

Another definition of Open Dialogue comes from PubliVate, the tech firm partnering with Canada 2020 to hold the Forum:

“Open Dialogue promotes the collaboration between governments with citizens, business, other governments whether online or in person.”

PubliVate continues:

“At its core, a good Open Dialogue activity is helping to solve an important objective by empowering the participants. It might use new and creative ways to carry out that dialogue or more traditional ones. It might engage people that would that perhaps historically might not have been involved in the discussion including people from outside of Canada if their experiences and insights might help to make the discussion richer.”

PubliVate also calls this “innovation management.”

Proponents of Open Dialogue say there are “four distinct kinds of dialogue processes,” as below from the Canada 2020 website:

Transactions “A transaction is a one-way relationship in which government delivers something to the public. This could be information, but it could also be a form of permission (licence), an object (drugs) or a service (policing). Transactions thus include not only information exchanges, but also the delivery of many public services.”

Consultation “Consultation provides members of the public with an opportunity to present their views on a subject to public officials. The process ensures they have a chance to make their views known to government. Once they have done so, the officials retreat behind closed doors to review the arguments, weigh evidence, set priorities, make compromises and propose solutions. Their conclusions are then presented to the government, which makes the final decisions.”

Deliberation “Deliberation allows participants to express their views, but it also asks them to engage one another (and possibly government) in the search for common ground. Whereas consultation assigns the task of weighing evidence, setting priorities, making compromises and proposing solutions to officials, Deliberation brings the participants into this process.”

Collaboration “Collaboration involves sharing responsibility for the development of solutions AND the delivery or implementation of those solutions. A government shares these responsibilities when it agrees to act as an equal partner with citizens and/or stakeholders to form and deliver a joint plan to solve and issue or advance a goal.”

The proponents of Open Dialogue contend that governments “still rely almost exclusively on only two of these: information sessions and consultation.” However, they say, Canada in “the digital era” is now “highly connected and, as a result, issues, organizations and outcomes are linked in new and often surprising ways.” Therefore “conducting more of these discussions out in the open would allow the public to see how decisions are made in this new environment and to participate more fully in them. Far from undermining good governance, Open Dialogue can make a major contribution to it by ensuring transparency and inclusiveness, which, in turn, creates clarity and gives people a sense of ownership of the decisions.”

What is meant by this is what Canadians will have to find out. Despite the bafflegab the MLPC thinks this much is clear:

Terminology and what is meant by it is highly manipulated. All matters of concern to the polity related to the composition of the body politic and the relationship between those who govern and the governed have been supplanted by market-driven concepts where citizens and residents are portrayed as stakeholders who are consumers of products said to benefit them, marketed by private interests for private gain.

Open Dialogue in the Hands of a Private Sponsor

PubliVate, the co-sponsor of the Open Dialogue Forum has been contracted by the federal government and others to put some form of Open Dialogue into practice. PubliVate says it offers “proprietary solutions” which “allow organizations to conduct successful large collaborative engagements (innovation management and crowdsourcing).” Its President, Geordie Adams, formerly held two positions in EDS Canada Inc., a subsidiary of HP Enterprise Services, LLC, focusing on “Public Sector Transformation” and “Postal Services.”

In one of its projects, PubliVate informs that Canada Post “needed to increase revenue and wanted to tap into ideas and insights from its 50,000 employees.” The “solution” PubliVate created was a “‘campaign’ strategy around IdeaShift, an online brainstorming activity to engage employees and allow them to work together virtually to develop great ideas for increasing revenue.” They inform that the project was directly integrated into Canada Post’s systems, with Canada Post executives playing “an active and appropriate role throughout the campaign.”

In order to get employees to participate, PubliVate says it “provided an incentive strategy that included numerous benefits for employees to considering [sic] participating.” The result was “over 1,300 ideas” from which the “top two ideas alone are contributing millions of recurring revenue for Canada Post.” Neither PubliVate nor Canada Post say what these ideas were.

Another “innovation management” contract came from the federal government under Stephen Harper. PubliVate created a tool to “educate” Indigenous peoples about the Harper government’s First Nations Financial Transparency Act (FNFTA), which withheld funding from First Nations and implemented other reprisals if they did not comply with requirements for disclosing the financial records demanded by the federal government.

PubliVate informs that after the FNFTA went into effect, government needed to “engage their audience and educate them about the FNFTA in an efficient, effective, and, ideally, progressive manner.” PubliVate says it “conceived and built a ‘FAQ [Frequently Asked Questions] on steroids’ online collaboration platform that allowed anyone to ask anything about FNFTA…” The result, they say, was a “new way to collaborate online.” It “helped to reshape how communities can learn and collaborate together through the strategy, creation, and ultimately [the] deploying [of an] Ask the Experts [platform] out to the stakeholders who required guidance and direction around the enactment of this legislation.” Such definitions of “collaboration” could not be more self-serving

Indigenous and Northern Affairs Canada informs that as of December 18, 2015 all measures taken under the Act have now been suspended. Although enforcement of the hated FNFTA has ceased, the platform remains online. It shows a variety of questions with answers provided by certified accountants from various contracted firms. The most “popular” item shows four “likes.”

In the News

Machinists and Aerospace Workers Feel Betrayed

Amendments to the Air Canada Public Participation Act, Bill C-10, were tabled on March 24 by Federal Transport Minister Marc Garneau. The amendments allow Air Canada to control the type and the volume of any aircraft maintenance work of its fleet in Canada.

“This move has Stephen Harper written all over it,” said Dave Ritchie, the Canadian General Vice President of the International Association of Machinists and Aerospace Workers (IAMAW). “They announce legislation before a long weekend hoping nobody will see it, and Canadian jobs and expertise suffer as a result. The Liberals were elected because they said they would protect workers, this legislation says otherwise. We have been asking for meetings with the minister since he took office to discuss this issue and he won’t talk to us. We voted for change and this is what we got.”

Under the original 1988 Air Canada Public Participation Act, Air Canada was required to maintain aircraft heavy maintenance facilities in Winnipeg, Mississauga and Montréal. Garneau has stated the changes are needed to allow Air Canada to be flexible and competitive.

Demonstration of Aveos workers, Montreal March 16, 2011

“With these amendments, there’s no requirement for Air Canada to do any of this work in Canada,” said Ritchie. “Every protection we had is gone because they will now control the type and the volume of work. We have the expertise to maintain, overhaul and repair aircraft, this legislation doesn’t even guarantee we can perform an oil change. It undermines an entire industry leaving it completely vulnerable. This is a complete sellout of Canadian aviation workers.”

Transport Canada gave the changes a very positive spin, first informing that Air Canada “recently announced its intention to purchase Bombardier C-Series aircraft, and to maintain those aircraft in Canada for 20 years, which will create important economic opportunities for highly skilled workers in the Canadian aerospace sector.” It then said that “Air Canada also announced its intention to contribute to the creation of centres of excellence for aircraft maintenance in Quebec and Manitoba.” Transport Canada says that these “new developments, and the intention to discontinue litigation involving Air Canada, Quebec and Manitoba, create an appropriate context to modernize the Act.”

It is unclear what the “centres of excellence” consist of. The phrase normally refers to a facility which provides “leadership, best practices, research, support and/or training” in a certain field, rather than, in this case, being a facility for regular maintenance work. The litigation against Air Canada which was discontinued related to the closure of Aveos Fleet Performance by the company in 2012, which put 2,600 workers out of a job and closed aircraft maintenance facilities. The agreement on “centres of excellence” say Air Canada will “create” a fraction of the jobs lost in 2012.

In typical Liberal style, why these changes are positive and for whom they are positive are kept hidden under jargon. The Department of Transport says, “The proposed amendments will clarify the nearly 30-year-old Act to allow Air Canada the flexibility to be competitive in a constantly evolving air transport sector.”

“It is important for the Government of Canada to allow air carriers equal opportunities to compete in an evolving air sector. The changes introduced today are based on a balanced approach that will support job creation in aerospace across the country,” said Minister of Transport Garneau.

For further information:
Dave Ritchie — IAMAW Canadian General Vice President – 416-386-1789
Bill Trbovich — IAMAW Director of Communications – 416-386-1789 Ext #6331/416-735-9765

(Transport Canada, International Association of Machinists and Aerospace Workers)

Government Adopts U.S. Methods for Pre-Screening
Air Travellers Entering Canada

On March 11, in the middle of Prime Minister’s Trudeau’s visit to Washington DC and the same day news agencies reported that changes were forthcoming, Minister of Public Safety Ralph Goodale amended four sets of regulations under the authority of the Customs Act and the Immigration and Refugee Protection Act (IRPA).

The changes will require airlines to provide advance as well as “real-time” information on anyone entering Canada by commercial flight to the Canada Border Services Agency (CBSA) for crosschecking with security agencies so that the decision is made ahead of time whether an individual will be permitted to board a flight. The amended regulations printed in the Canada Gazette note that the move is part of implementing the Canada-U.S. declaration Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness adopted in February 2011.

The regulatory changes establish an Interactive Advance Passenger Information (IAPI) system which “will provide the CBSA with the authority to apply a systematic mechanism to identify travellers who are not admissible to Canada…” The cost of the program is said to be $10 million annually and compliance from air carriers will become mandatory as of September 30, 2016. The IAPI system will be used to make “board/no-board” decisions on all travelers prior to their departure. This brings the CBSA system in alignment with the U.S. Advance Passenger Information System (APIS) which went into effect in 2009. The regulations will require airlines to have a secure data link with the CBSA in order to provide access to the required information in the prescribed format in a “real-time” basis, including any changes to the information that may occur.

Passenger reservation information will have to be provided by air carriers or travel agencies to the CBSA at least 72 hours prior to departure including:

– Name, date of birth, citizenship and gender; reservation record locator number; date of reservation and date of ticket being issued; itinerary, including dates of departure and arrival for each segment of carriage;

– Type and number of passports and all other travel documents used for identification purposes;

– Information about participation in a loyalty program and benefits earned under the program;

– Number of other passengers included in reservation record and names; contact information for each person in the reservation record; billing and payment information, including credit card number and billing address;

– Information about travel agent or agency, including name and contact information;

– Code share information (flights shared by multiple airlines); -Information about whether the reservation record has been divided into several records or is linked to another record;

– Passenger travel status, including travel confirmation and check-in status;

– Ticketing information, including the ticket number, automated ticket fare quote and whether a one-way ticket was purchased;

– Baggage information, including the number and weight of their bags;

– Their seating information, including seat number;

– General remarks about the person in the reservation record, including other supplementary information, special service information and special service request information;

– The history of any changes to the information referred to in the above items.

This further additional information must be handed over by the time of departure:

– Name, date of birth, citizenship and gender;

– Type and number of passports and all other travel documents used for identification purposes;

– Reservation locator number and unique passenger reference, and if it is the case, status as a crew member of a flight;

– Any other information in a reservation system;

– Date and time of departure; the last point of embarkation before arriving in Canada; date and time of arrival and point of disembarkation in Canada; and flight codes of commercial air carriers and flight numbers.

The regulatory changes note that “Every traveller scheduled to be carried to Canada by air via a commercial flight is within the scope of the IAPI program, including U.S. citizens and returning Canadians.” Transport Canada estimates say that more than 45 million international passengers enter Canada per year. The purpose of the AIPI 72-hour notice provision is to allow the government to “obtain passenger information earlier in the travel continuum, thus pushing the border out, by providing the CBSA with more time to screen incoming travellers for potential inadmissibility concerns and those failing to comply with Canada’s immigration laws.”

It will also allow for the CBSA to provide information to police and security agencies, including those in the U.S., to evaluate the passengers. Information collected may be retained by the CBSA for three and a half years, or six years if it is part of an active investigation.

For more information about the regulatory changes, including the government’s assessment of “privacy impacts” and “proposed mitigation,” see the Canada Gazette, Vol. 150, No. 6 — March 23, 2016.

Canada Revenue Agency Hands Over
Banking Information

The Canada Revenue Agency (CRA) transferred 155,000 banking records from Canadian financial institutions to the U.S. Internal Revenue Service (IRS) last September, according to documents tabled in the House of Commons. The arrangement which permits this was put in place by the Harper government in response to a U.S. law which imposes penalties on U.S. financial institutions and those worldwide which do not comply with its demand for information on “U.S. persons.” “U.S. persons” includes thousands of Canadians with dual citizenship even if they have made no income in the U.S. and do not pay taxes in that country. It is a gross violation of privacy which is illegal in Canada. Despite this, the Liberals are upholding the transfer which did not even wait for a ruling from the Privacy Commissioner. A second transfer of records to the IRS is apparently scheduled for September 30, 2016.

All of it is presented as very “routine” as if it is all a matter of no harm no foul. Allison Christians, a McGill University expert in tax law said the IRS “routinely” shares information with other U.S. government agencies such as the FBI or the CIA should it see anything it believes could indicate a breach of U.S. law. She indicated that the deal also gives the CRA access to banking information on Canadians that it would not normally be able to access without a court order.

“The CRA, for example, could not require blanket information requests from Canadian banks on Canadians under the Income Tax Act, it could not do that without the involvement of a judge. But that is exactly what FATCA requires and so the CRA is now, very quietly, collecting a lot of information that under the Income Tax Act would not have been possible on Canadians,” Christians said.

Christians also noted that there are things like doing business with Cuba or some sections of the Foreign Corrupt Practices Act which are offences in the U.S but not in Canada. In this respect the law appears to contradict Canada’s own Foreign Extraterritorial Measures Act which gives the Attorney General the power to decide not to permit information or records if it infringes in any way on Canadian interests or sovereignty. That law was passed in relation to the U.S. Helms Burton Act which imposes restrictions on trade with Cuba in an extraterritorial manner onto third countries and its citizens in those countries. This new tax agreement could be used to target Canadians considered U.S. persons from doing business with Cuba by having access to their banking records. However the new law itself makes it clear that U.S. demands prevail over all previous or future Canadian laws: “in the event of any inconsistency between the provisions of this Act or the Agreement and the provisions of any other law (other than Part XVIII of the Income Tax Act), the provisions of this Act and the Agreement prevail to the extent of the inconsistency.”

The CRA does not have any plans or obligation to notify Canadians whose banking records were transferred to the IRS. “The legislation implementing the IGA requires that Canadian financial institutions communicate with account holders of pre-existing accounts if there is information suggesting that they are a U.S. citizen or resident (eg. their client file contains a U.S. contact address or phone number). These clients would therefore be on notice that their information may be exchanged with the U.S. Internal Revenue Service,” said the office of Revenue Minister Diane Lebouthillier in response to media concerns about the handover of the documents.

“The U.S. government has signed, or is in the process of negotiating, similar IGA’s (intergovernmental agreements) with over 100 other countries. These IGAs contain similar obligations to those in the IGA between Canada and the U.S. The IGA is subject to the strict confidentiality rules set out in the treaty,” the minister’s office said.

Lebouthillier’s office said, “Minister Lebouthillier wants to reassure Canadians that all exchanges of information are subject to strict confidentiality rules. The CRA ensures that tax cooperation with its foreign partners is done in a manner fully consistent with privacy rights in Canada.”

This is a joke given that the handover of the information itself breaches confidentiality and that Canadians pronounced themselves massively against information sharing with the U.S. such as that sanctioned by the “anti-terrorist” legislation Bill C-51. Lebouthillier’s office continued:

“It is important to note that Canada and the United States have a long history of exchanging tax information in a fair and responsible manner, going back to 1942.” “Canada is required by law to exchange certain specific information with the U.S. under the Intergovernmental Agreement between Canada and the U.S. signed on February 5, 2014,” Lebouthillier’s office nonetheless added, saying, “The CRA exchanged information with the Internal Revenue Service on September 30, 2015, as required.”

Now that they form the government, the Liberals have changed their tune. Their current stand is opposite to what Trudeau said in a letter dated June 25, 2015 to Lynne Swanson of the Alliance for the Defence of Canadian Sovereignty, which has been fighting to stop the CRA from turning the records over to the IRS. Trudeau described the “implications of having the CRA report to a foreign government agency about Canadian citizens” as “troublesome.”

“While the United States has the right to target tax evaders using offshore accounts, targeting hard working Canadians who pay taxes is unfair,” Trudeau said. “The Government of Canada has a responsibility to stand up for its citizens when foreign governments are encroaching on their rights. We believe that the deal reached between Canada and the U.S. is insufficient to protect affected Canadians.”

Notes

1. The Federal Court ruled last September that changes made to the Income Tax Act to allow the deal to function did not violate Section 241 of the Act, which supposedly protects the confidentiality of taxpayer information. This ruling was the basis for the CRA recommending that new Liberal Minister of Revenue could do nothing about the transfer of records despite a court challenge to the handover of the documents and a pending review by the Privacy Commissioner.

The agreement itself in its whereas clauses noted that the Governments of Canada and the United States of America are supportive of applying the underlying policy goal of FATCA on a reciprocal basis to improve tax compliance and further that FATCA had raised a number of issues, including that Canadian financial institutions may not be able to comply with certain aspects of FATCA due to domestic legal impediments. With the agreement the Harper government committed by January 1, 2017 to sort out these issues in order to be able to hand over the required information.

2. An organization called the Alliance for the Defence of Canadian Sovereignty is challenging a Canadian law that implements FATCA. The organization claims that the Canadian law violates the Canadian Charter of Rights & Freedoms, particularly the provisions related to discrimination on the basis of citizenship or national origin.

The challenge is not technically a direct opposition to FATCA — as the United States Congress has no legislative authority over Canada — but is instead opposition to the parallel Canadian federal legislation. On August 11, 2014, in an action supported by the Alliance, two Canadian citizens filed suit in the Federal Court of Canada challenging the constitutionality of the Canadian law that implements FATCA in Canada. Both of the citizens were born in the United States, with at least one Canadian parent, but they returned to Canada in childhood and have had no residential ties to the United States since that time. They state that this would result in them having U.S. indicia, and therefore being discriminated against by Canadian banks. On August 12, 2014, Canadian government spokesman Jack Aubry defended the constitutionality of the legislation, but otherwise declined to comment on the pending litigation.

A Canadian Federal Court ruling would not involve jurisdiction over the relationship of United States citizens with the United States Government, but would affect those individuals’ rights as Canadians. Such a ruling would therefore be a finding of unconstitutionality as a matter of Canadian Constitutional law, as to the two litigants. It would allow a remedy under Canadian law, but would not relieve them of their responsibilities to the United States under FATCA, as United States citizens. Thus, such a ruling would not remove the effect of the provisions of FATCA on U.S. citizen-taxpayers, no matter where their bona fide non-U.S. tax home is located. However, a Human Rights Complaint submitted to the United Nations by members of The Isaac Brock Society and Maple Sandbox, claims that the U.S. system of taxation, requirements, compliance reporting and excessive penalties therewith, of its citizens tax resident in other countries, including taxation of their income and assets in those countries, represents violation of their Human Rights. This complaint is suggestive that such taxation violates the IRS Taxpayer Bill of Rights provision #10 “The Right to a Fair and Just Tax System.”

On October 7, 2014, the legal claim by the Alliance was amended to include the allegation that the FATCA IGA and enabling legislation are in violation of both the Income Tax Act of Canada and the Canada-U.S. Tax Treaty.

TML Weekly

Looking at the Budget

The federal government released its 2016 budget on March 22, which it calls Growing the Middle Class. The issue of TML Weekly published March 26 features part one of a series “Looking at the Budget” which points out that the “aim of the Liberal budget is found in the details.” Part one, “A Budget in Opposition to Nation-Building” notes that one of the concerns of the rich today is how to protect their social wealth and their class privilege and control, when the rate of profit is under attack and they are lacking safe places for investment. “One answer is through state-organized pay the rich schemes. The Trudeau budget is full of such schemes that can be discussed one after another.”

One such scheme highlighted is to pay the rich through state borrowing from the international financial oligarchy. This is evident in the government’s method of financing the budget deficit, namely by “borrowing from private owners of social wealth adding to the national debt held mostly by the international financial oligarchy.” The projected accumulated federal deficit from now until fiscal year 2020-21 is $118.6 billion. During the same period, the payment of public funds to service the interest charges on the federal debt is calculated as $175.5 billion. This is coupled with more or less stagnant social spending, and no measures to strengthen manufacturing, especially under public enterprise. Part two will look at another such scheme to pay the rich, the Liberals’ infrastructure spending promises. Click here to read part one, and subscribe to receive TML Weekly by e-mail using the form above.