Canadian Banks Become Informants for the IRS

“When Canada’s banks reopen for business on July 2, they will begin formally operating as informants for the United States Internal Revenue Service — the IRS,” James Fitz-Morris wrote for the CBC news website today. Fitz-Morris continued, “Financial institutions in Canada will be required to ask all new and existing clients opening a new account questions such as where they were born, and possibly where their parents were born. Those who indicate they have a connection to the U.S. will have their files sent to the Canada Revenue Agency — which will automatically pass them along to the IRS. Canadian citizens who decline to answer the new set of questions could have their personal banking information passed along to Uncle Sam to determine if they are a ‘U.S. person.’ Or, the bank could refuse to open an account for those who refuse to answer the questions. All U.S. citizens and ‘resident aliens’ (green card holders) are required to file U.S. taxes every year — regardless of where they live. Eritrea is the only other country in the world with a similar law.” Read the full article here.

US citizens abroad get the tax letter

“The other day, my accountant called me with bad news. I have to write a cheque for $593.12 to the U.S. government,” Margaret Wente wrote for The Globe and Mail yesterday. I was floored. I’m Canadian. I have a Canadian passport. I haven’t lived in the United States since I was 14. I pay a pile of taxes here. Why should I pay money to a foreign power? ‘It’s a new investment tax,’ he said. ‘It’s supposed to help pay for Obamacare.’ Welcome to the nightmare of U.S. citizens abroad. There are hundreds of thousands of us in Canada, and millions more worldwide. Most of us are law-abiding people. But the U.S. government is treating us like tax cheats. It also says that any ‘U.S. person’ (meaning anyone born in the United States, or even anyone with American parents) must keep filing U.S. tax returns, forever – or else. This news has come as a nasty shock. Take the case of Carol Tapanila, a former American who lives in Calgary. Her developmentally disabled son, now an adult, is also deemed to be American, even though he was born in Canada. As she put it in an interview with the CBC, ‘he’s entrapped.’ Trying to figure out how to comply with U.S. tax laws has already cost her tens of thousands of dollars, and she’s had to pay taxes on her son’s disability savings plan, which the U.S. government has called an ‘offshore trust.'” Read the full article here.

Bank of Engand Mark Carney joined the best band…

…or so said chief economist of Canadian Imperial Bank of Commerce Avery Shenfeld, wrote Mark Gilbert for last Friday. “When Canada’s Mark Carney became governor of the Bank of England last year, Avery Shenfeld, the chief economist of Canadian Imperial Bank of Commerce, described him to me as the Ringo Starr of central banking: ‘He may not be the best drummer in the world, but he’s joining the best band.'” Gilbert wrote. Gilbert continued, “The U.K. economy is roaring ahead, on track for the fastest growth of any Group of Seven nation this year and with employment climbing at a record pace — and Carney’s drumming skills are about to be sorely tested. Having suggested a year ago that interest rates would probably stay on hold until at least late 2016, he sprung a surprise in his annual Mansion House speech last night: ‘There’s already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced,” he said. “It could happen sooner than markets currently expect.’ So the March or April or May 2015 increase economists and traders had penciled in for the Bank of England’s official rate to climb from its current record low 0.5 percent level becomes a 2014 affair.” Read Mark’s full article here.      

Wynne secures Liberal majority, Hudak resigning

“In 2003 Kathleen Wynne was told she would never be able to defeat Progressive Conservative cabinet minister David Turnbull,” Robert Fisher wrote in a CBC online news article early this morning after the Ontario liberal leader won yesterday’s provincial election. Fisher continued, ‘She did. In 2007, she heard the same thing when then-Progressive Conservative leader John Tory decided he’d run against her in Toronto’s Don Valley West riding. But, she defeated him. In 2011, Wynne faced another high-profile Conservative and despite the talk she was vulnerable, she defeated her too. So when former premier Dalton McGuinty stepped down, many Liberals approached Wynne, asking her to consider a run for the leadership of the party. She did consider it and she ran, even though there were Liberals who privately worried that, while they liked the idea of a female leader, she could win the leadership but not the province in a general election because she is a lesbian. With an open and impassioned convention speech, Wynne became Liberal leader — and last night, Ontario’s first elected female premier. Her choice to go public on what could have easily remained a private issue has now ended that debate. The election result has also ended the debate over the other debate — the televised one — and Wynne’s uneven performance. It seems to say: you can lose the leaders debate but win the election.” Read the full article here.

Bank of Canada governor warns of severe impact of house price reduction

 “Bank of Canada governor Stephen Poloz says the Canadian housing sector is vulnerable because of high housing prices and high levels of household debt, but says he continues to believe it is on course for a soft landing,” a CBC news online article wrote today. The article continued, “Speaking in Ottawa Thursday, Poloz said Canada’s financial system is vulnerable to a sharp correction in housing prices. ‘The most important domestic risk is a sharp reduction in house prices,’ he said at a news conference following the release of the central bank’s semi-annual review of the financial system. ‘If it were to happen, its impact on the economy and financial system would be severe,’ Poloz said. His statement comes a day after the Organization for Economic Co-operation and Development told Canada it was concerned that rising home prices were widening inequality and the International Monetary Fund warned that high house prices might be a threat to global growth. Poloz said the probability of a sharp correction is small and, if it comes, it will be caused by external factors, such as a sudden failure of the economic recovery that seems to be underway in the world economy.” Read the full article here.

Tight Ontario election race for Liberals and PCs

“With only one day left to campaign and polls pointing to a tight two-way race between the Liberals and Progressive Conservatives, Ontario leaders are making a hard, final push ahead of Thursday’s vote. The final day of campaigning comes as allegations of dirty tricks begin to surface,” a CBC news article wrote today. The article continued, “On Tuesday, the PCs had to apologize after voters in two ridings — one in Ottawa, another in London — received letters containing false information about where to vote. The Liberals accused the Tories of ‘voter suppression,’while the PCs said the letters were sent in error. The Tories were furious over a Liberal campaign flyer issued in Vaughan by candidate Steve Del Duca. The flyer featured an image of PC Leader Tim Hudak laughing maniacally as he walks away from a hospital exploding in the background. The ad takes its inspiration from the Batman movie The Dark Knight, with Hudak in the role of the Joker.” Read the full article here.

Harper commemorates D-Day with world leaders

“Prime Minister Stephen Harper and close to 20 other world leaders converged on the beaches of Normandy, France Friday to celebrate the 70th anniversary of a pivotal invasion that marked a turning point in the Second World War,” Steven Chase wrote for The Globe and Mail today. Chase continued, “About 14,000 Canadian troops came ashore at Juno Beach on this day in 1944 – part of large force of 156,000 Allied troops that landed on an 80-km stretch of France’s northern coast. Three hundred and forty Canadians died on that June 6 and more than 5,000 were killed during the entire Battle of Normandy, which saw Allied forces establish a much-needed foothold in Western Europe. On a sunny Friday morning under clear skies, Mr. Harper led a wreath-laying at Beny-sur-Mer war cemetery, the resting place of more than 2,000 Canadian soldiers killed during the early stages of the Norman invasion. The site is ringed by pines, maple tree and hedges and those buried here include nine pairs of brothers – the most of any Second World War cemetery.” Read the full article here.

Bank of Canada sends the CND dollar lower

“The Bank of Canada helped send the Canadian dollar lower again today as it highlighted the benefit of a weaker currency and cited the potential risks ahead,” Michael Babad wrote for The Globe and Mail today. Babad continued, “As The Globe and Mail’s Barrie McKenna reports, the central bank under Governor Stephen Poloz held its neutral stance, giving no signal as to where its benchmark interest rate could be headed, or when. As expected, it held the key overnight rate at just 1 per cent. ‘Global economic growth in the first quarter of 2014 was weaker than anticipated in the [monetary policy report] and recent developments give slightly greater weight to downside risks,’ the Bank of Canada said. So called-core inflation, which strips out volatile items, is still ‘significantly below’ its target. The central bank noted that the economy expanded at a modest pace in the first quarter of the year – by just 1.2 per cent at a annual rate – notably because of the weather.” Read the full article here.

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