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National

Court dismisses challenge of deal that helps U.S. nab tax cheats in Canada

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Supreme Court

OTTAWA — A Canada-U.S. deal allowing Canadian financial institutions to send customer information to U.S. authorities to help find tax cheats does not violate the Charter of Rights and Freedoms, a judge has ruled.

Federal Court of Canada Justice Anne Mactavish dismissed an appeal from two American citizens, Gwendolyn Louise Deegan and Kazia Highton, who now live in Canada and have no real ongoing connection with the United States.

The U.S. Foreign Account Tax Compliance Act, or FATCA, requires banks and other institutions in countries outside the United States to report information about accounts held by U.S. individuals, including Canadians with dual citizenship.

Deegan and Highton challenged the constitutionality of Canadian provisions implementing a 2014 agreement between the countries that makes the information-sharing possible.

They argued the provisions breach charter guarantees that prevent unreasonable seizure and ensure the equality of people under law.

Mactavish concluded in her decision released Monday that although the provisions do result in the seizure of the banking information of Americans in Canada, the affected people have only “a limited expectation of privacy” in their data.

She also ruled that the provisions do not violate the charter guarantee that every person is equal under the law without discrimination based on national origin.

Under the tax arrangements, Canadian financial institutions are legally required to provide the Canada Revenue Agency with data concerning accounts belonging to customers whose information suggests they might have American citizenship. The revenue agency then hands the information to the U.S. Internal Revenue Service.

Nearly all countries levy income taxes based on residency, while the U.S. system is based on citizenship.

The U.S. considers all American citizens to be permanent tax residents in the United States for federal income-tax purposes, taxing the worldwide income of “specified U.S. persons” regardless of whether they live, work, or earn income in the United States.

“The result of this is that every Canadian resident who is an American citizen is subject to U.S. federal taxation on all of their income from all sources, wherever that income may be derived, even if he or she is also a Canadian citizen,” Mactavish says in her decision.

“Canada clearly found itself in an extremely difficult position as a result of the enactment of FATCA by the American government.”

U.S. law requires extensive financial and asset reporting, with the threat of significant penalties for failure to meet the obligations.

However, Mactavish notes, the U.S. government estimates that fewer than 10 per cent of all people who file American tax returns from outside the United States ultimately owe any taxes to Washington.

In addition, a tax treaty between Canada and the United States allows residents of Canada to receive credit for some taxes paid to the federal and provincial governments that would otherwise have been owed to the U.S. revenue service.

Deegan and Highton unsuccessfully argued the provisions require Canadian banks to transfer the information of potentially hundreds of thousands of people annually to the federal revenue agency in Ottawa without judicial authorization or any state oversight.

They said this amounts to “a massive fishing expedition and a seizure that offends every core precept of the citizenry’s … right to a reasonable expectation of privacy.”

Mactavish pointed out that the Supreme Court of Canada has found that taxpayers’ privacy interest in records that may be relevant to the filing of income-tax returns is “relatively low.”

The method used to collect this information is “minimally intrusive” and the data shared with the U.S. revenue service is afforded protection under the tax treaty between the two countries, she added.

— Follow @JimBronskill on Twitter

Jim Bronskill , The Canadian Press

Agriculture

151st Cowichan Exhibition includes new category: best home-grown pot

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VICTORIA — One of Canada’s oldest fall fairs is putting a new twist on its annual showcase of local livestock, produce and fruit by adding a new category for best home-grown marijuana.

The Cowichan Exhibition in Duncan, B.C., which dates back to 1868, has created a best cannabis category to embrace legalization and celebrate local pot growers, said exhibition vice-president Bud James.

The fair starts Friday and the cannabis entries will be on display in the main hall at the Cowichan Exhibition Grounds along with the region’s top vegetables, fruits and baked goods. First prize is $5, second is $3 and third place gets a ribbon.

“We just decided this year, because it’s an agricultural product, and it’s been grown in the valley for years, and now that it’s finally legally grown, we would allow people to win a ribbon for the best,” said James.

He said fair officials believe the Cowichan cannabis category is the first of its kind in Canada.

An official at the Canadian Association of Fairs and Exhibitions, a non-profit organization representing rural and urban fairs, said she had not heard of any other cannabis judging contests prior to the Cowichan Exhibition, but couldn’t confirm it was the first.

A fall fair in Grand Forks, B.C., is also judging local cannabis, but the event starts Saturday, one day after Cowichan’s fair. Those who enter the competition in Grand Forks can compete for best indoor- and outdoor-grown cannabis.

James said fair organizers contacted the local council and RCMP prior to adding the cannabis category. The mayor and council did not oppose the contest and the RCMP referred organizers to B.C.’s Liquor and Cannabis Regulation Branch, the agency monitoring retail sales of non-medical cannabis, he said.

Organizers decided to go ahead with the event after its plans were not rejected, James said.

“Our interpretation of the rules are you can’t make it attractive to people under 19 years and we are not making it attractive,” he said.

James said the cannabis entries will be placed in a glass display case and the individual entries will be sealed in clear zip lock plastic bags.

“It’s being judged to the same standard of judging garden and field produce,” he said. “It’s done by uniformity. You want all three buds to be the same size, same shape, same colour. It’s also the dryness, texture and smell. It’s exactly the same way you would judge apples or carrots or hay bales. It’s all done the same way.”

James said the contest doesn’t involve sampling the product.

Bree Tweet, the manager of a medical cannabis dispensary in nearby Ladysmith, will judge the marijuana entries, said James.

The exhibition received 18 cannabis entries and James said the contest created a buzz at the fair.

“The enthusiasm of the entrants, the people bringing their entry forms, they are so enthusiastic it’s unbelievable,” he said. “They are so thrilled that it’s happening, that we’re doing it because they’ve been waiting for years for legalization and now, they finally got it and now they have a chance to show what they can do.”

James, who has entered his prized Dahlia flowers at past fairs, said the addition of the cannabis category has exceeded expectations with the 18 entries.

 

 

 

 

 

 

 

 

Dirk Meissner, The Canadian Press

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Education

School board defends book pictured on principal’s desk after online uproar

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A Toronto-area Catholic school board says an online firestorm that erupted after a book on how to teach black students was photographed on a principal’s desk stems from a misunderstanding over the book’s contents.

The Dufferin-Peel Catholic District School Board says the book, titled “The Guide for White Women Who Teach Black Boys,” has a provocative title but is actually a helpful resource on tackling racial and cultural oppression in education.

Michelle Coutinho, the board’s principal of equity and inclusive education, says such materials are a particularly useful reference given how diverse the student population is in the district and at that specific school.

The controversy emerged this week after a Brampton, Ont., high school, Cardinal Ambrozic Catholic Secondary School, posted a photo of its new principal on Twitter.

The photo, which shows the book on her desk, set off heated debate, with some suggesting it was a sign of racism or incompetence, or a prop meant to bolster the school’s image.

The image was also shared on instagram by 6ixBuzzTV, a popular account with roughly 1.2 million followers.

“LOOOOL. No principal should make it this far while subsequently needing a book like this,” one person wrote on Twitter. “She a bad principal,” wrote another.

Some defended the book, however, and the principal’s efforts to educate herself. “She’s making an effort to connect with her students, it’s more than most principals do,” another tweet read.

The board said it was surprised by the uproar and hoped people would look up the book before jumping to conclusions based on its title.

The principal intends to address the photo in a public announcement and invite any students with lingering questions to see her, said Bruce Campbell, the board’s spokesman.

The book, written by three researchers and published in 2017, aims to improve outcomes for black students by helping teachers create learning environments in which they feel nurtured and engaged. The title references the fact that white women make up the bulk of the teaching force in the U.S.

Coutinho said the book asks educators to challenge the biases they may bring into the classroom.

“We know that we’re steeped in a colonized kind of world view and how do we break out of that in our everyday practices?” she said, noting it has been used in the board’s anti-oppression training in the past.

Cardinal Ambrozic’s new principal was involved in a book study at several schools that delved deeply into the text last year, Coutinho said.

“If we’re going to make any changes to the education system, we have to start talking about these things and talking about them openly and honestly without shame or blame.”

 

 

 

 

 

Paola Loriggio, The Canadian Press

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