OTTAWA – Canada’s Supreme Court will not hear a challenge to a federal law that would allow disclosure of information to US tax authorities about accounts held by Americans with Canadian financial institutions.
The case began when two women who were born in the United States but now live in Canada challenged the Canadian provisions of a law implementing a 2014 bilateral agreement that allowed for such information sharing with US tax authorities. (IRS).
The two women unsuccessfully argued in court that these provisions violated Canada’s Charter of Rights and Freedoms, which guarantees, among other things, that everyone has the right “to protection from unreasonable seizure”.
The US Foreign Accounts Tax Compliance Act requires financial institutions based in countries other than the US to report information to the IRS about accounts held by Americans — including Canadians who have dual US citizenship.
The Canadian government argued in the federal appeals court that failure to comply with the US measures would have had serious repercussions for Canadian financial institutions, their customers and the broader economy.
Financial institutions in Canada report to the US tax authorities, among other things, the names and addresses of account holders, account numbers and their balances, and details such as interest, dividends and other capital gains.
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