Section 266

Woods JA confirmed the rejection by the Federal Court of the position of two American citizens, who had had no significant connection with the U.S. since early childhood, that the information-reporting requirements in ITA Part XVIII (the “Impugned Provisions”) resulted in the unreasonable seizure of financial information belonging to U.S. persons in Canada, contrary to s. 8 of the Charter.

She stated (at paras. 54, 56 and 62):

The Impugned Provisions … are similar to information automatically provided to the CRA for regulatory purposes (e.g., T4s by employers, T5s by financial institutions, and taxpayers’ annual disclosure of foreign holdings). …

It is difficult to see how a seizure contemplated by the Impugned Provisions significantly intrudes into privacy interests, as the appellants appear to suggest. Accordingly, I see no reason in this case to revisit the comment in Jarvis that the entire ITA is a regulatory statute. …

Quite simply, the Impugned Provisions are an example of international cooperation in the administration of income tax laws. …

Mactavish J rejected the position of two American citizens, who had had no significant connection with the U.S. since early childhood, that the information-reporting requirements in ITA Part XVIII resulted in the unreasonable seizure of financial information belonging to U.S. persons in Canada, contrary to s. 8 of the Charter. Although she accepted that these provisions provided for the seizure of the specified account information, she considered such seizure to be reasonable after weighing the “minimally intrusive” (para. 293) nature of the seizure (i.e., of banking information that the individuals already could be required under US law to provide) against (para. 349) “the need to protect Canada as a whole from the economic consequences of FATCA” (i.e., of the disruptive 30% U.S. withholding tax that would have been imposed in the absence of arriving at the IGA).

The individuals’ s. 15 equality rights arguments also did not succeed. Although the legislation distinguished on a ground (citizenship) that was analogous to the enumerated grounds, she found (at para. 430) that:

[I]nsulating persons resident in this country from their obligations under duly-enacted laws of another democratic state is not a value that section 15 of the Charter was designed to foster.