The lawsuit was filed by the Alliance for the Defence of Canadian Sovereignty (ADCS) on 11 August 2014 and aims to break off the intergovernmental agreement (IGA) between Canada and US signed in February last year.
The alliance said today that it has raised $400,000 of the $500,000 required to take the lawsuit through the first court, and must pay the next instalment by 1 August this year.
It claims the IGA “aims to round up innocent Canadians, turn them over to a foreign government, and force them to transfer their retirement savings to the IRS”.
“We believe that the Canadian legislation that implements the FATCA IGA violates the Canadian Constitution, Canada’s Charter of Rights and Freedoms, the principles of Canadian sovereignty and democracy, and the fundamental rights of all Canadians,” it said.
Canada’s IGA requires its financial institutions to provide US information to its revenue authority by 30 September this year, which will then be passed on to the US Internal Revenue Service (IRS).
The information will be used by the IRS to implement FATCA, a controversial piece of US legislation introduced in July 2010 which requires financial institutions around world to identify and report the financial details of all their American clients, whose tax duties remain once they leave the country, or risk facing a withholding fine on all relevant transactions.
The lawsuit is being led by Vancouver-based litigator Joseph Arvay and aims to “defend Canada’s sovereignty” and its people from the “attempt of other countries to impose their legislation.
The alliance is chaired by Stephen Kish, a University of Toronto Professor of Pharmacology and Psychiatry and a Canadian citizen originally from the United States.
At the time of signing the IGA last year, Canadian National Revenue minister Kerry-Lynne Findley said: “This is strictly a tax information-sharing agreement. The Canada Revenue Agency does not collect the US tax liability of a Canadian citizen if the individual was a Canadian citizen at the time the liability arose.”