Filed Today: Lawsuit challenging constitutionality of FATCA in Canada

Noted Canadian constitutional lawyer Joseph Arvay filed suit today to challenge the constitutionality of Canada's implementation of FATCA. The statement of the claim is laid against the Attorney General of Canada in the Federal Court of Canada. It seeks a declaration by the Court that the relevant parts of recently enacted Bill C-31, referred to as the "Impugned Provisions," are beyond Parliament's authority and of no force and effect under the Constitution. The claim makes four claims about Canada's attempt to implement FATCA:

(1) it violates the Constitution by creating federal power over a provincial domain;
(2) it violates s. 7 of the Charter, guaranteeing individual rights to life, liberty & property;
(3) it violates s. 8 of the Charter, preventing unreasonable search & seizure; and
(4) it violates s. 15 of the Charter, prohibiting discrimination based on national origin etc.

The complaint concludes that none of these infringements can be justified by section 1 of the Charter, which provides for only "such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society."

The lawsuit is the product of efforts by a small, grassroots group formed for this purpose, calling themselves the Alliance for the Defence of Canadian Sovereignty. They have issued a press release, here. The two named plaintiffs are taking a major risk in being exposed as "non-compliant US Persons" in this lawsuit. On the other hand the IRS may not wish to get in the middle of this fight and prove the plaintiff's case, which is succinctly stated here.

I look forward to following the case, which I expect to wind its way toward the Supreme Court. As I've said many times, there are massive problems with FATCA that have nothing to do with tax evasion and everything to do with the basic injustice that is citizenship taxation and all global efforts to enforce it for the US. The US Congress is reluctant to act on this antiquated and unjust regime and the IRS must plow ahead, as I explained recently. But that certainly does not mean that other countries must do the job of the IRS, most especially when doing so is inconsistent with their own laws.