The S. 877A “dual citizen” exemption – Born before 1947, Could I have been “born a Canadian citizen”?

Introduction:

This is the 3rd of seven posts analyzing the “dual citizen exemption” to the S. 877A Exit Tax which is found in S. 877A(g)(1)(B) of the Internal Revenue Code. Please remember that the “dual citizen exemption” is available ONLY to those who meet the “five year tax compliance test”.

1. What is the S. 877A(g)(1)(B) “dual citizen exemption” and why does it encourage those “born dual citizens” to not renounce U.S. citizenship?

2. The history of Canada’s citizenship laws: Did the 1947 Canada Citizenship Act affirm citizenship or “strip” citizenship and create @LostCanadians?

3. The S. 877A “dual citizen” exemption – I was born before the first ever Canada Citizenship Act? Could I have been “born a Canadian citizen”?

4. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act – Am I still a Canadian or did I lose Canadian citizenship? (The “Sins Of The Father”)

5. The S. 877A “Dual Citizen” exemption: The 1947 Canada Citizenship Act and the requirements to be “born Canadian

6. “The S. 877A “Dual Citizen” exemption: I was born a dual citizen! Am I still “taxed as a resident” of Canada?

7. The S. 877A “Dual Citizen” exemption: “MUST certify tax compliance for the five years prior to relinquishment


 

I recently wrote a general post about the “dual citizen exemption to the S. 877A Exit Tax” rules. In order to qualify for the exemption, one must (among other requirements) have been BORN (at birth) a dual citizen (which is why this exemption could never be available to one who naturalized as a U.S. citizen).

The precise language includes:

became at birth a citizen of the United States and a citizen of another country

What does this mean for those who were born before 1947 and are claiming to have been born “dual Canadian U.S. citizens”? It’s not as simple as it sounds. I had not fully appreciated (or had not yet faced up to) the difficulties until I became aware of the tortured history and unintended consequences of the 1947 Canada Citizenship Act.

I recently had the privilege of meeting Don Chapman, author of the book “The Lost Canadians”. Mr. Chapman is clearly a “Canadian Citizenship Historian”. I encourage you to see the interview of Don Chapman here.

The first Canada Citizenship Act – Effective date January 1, 1947

Canada Citizenship Act 1947

The following tweet references a discussion at the Isaac Brock Society which suggests how Canada’s 1947 Citizenship Act could (in theory) impact the S. 877A Exit Tax rules:


 
This discussion at the Isaac Brock Society, provides the context for the following question which was posed to me:

After much searching I have not seen the following issue discussed on your blog or other sites. I recently received my Canadian citizenship certificate which has an effective date of 01/01/1947. I was born in the USA in 1943 to a US father and a Canadian mother (she was born in Vancouver, BC).
 
Prior to the passage of Canadian Bill C-24 in 2014 I was not considered a Canadian citizen, however passage of this Bill corrected this retroactive to 1947. However people born in Canada prior to 1947 that were dual citizens seemingly would have also incurred the same issue.

It is my desire to expatriate and I believe I can meet all of the requirements to qualify as a non-covered expatriate except as a citizen of another country at my birth, although a citizen by descent. This is simply because no one in Canada was considered a Canadian citizen until passage of the Canadian Citizenship Act of 1946 with an effective date of 01/01/1947. Thus, the same date on my citizenship certificate. Certainly this would not have been the intent of US Congress but doubtful anyone in Congress was ever aware that Canada considered its citizens to be non-citizens pre-1947. There must be many similar cases of older Canadians expatriating but who have not discovered them to date or their outcomes.

 

“If I was born before the first Canada Citizenship Act was enacted, could I have born a Canadian citizen?”

This post is an attempt to answer that question. The post is meant for “reflection and discussion”. It is NOT legal advice. The answer to this question could NOT be known with certainty unless and until it is ruled on by a court of competent jurisdiction (which the U.S. would assume to be a U.S. court).

In any event, I believe that the answer is:

Yes, if you were born prior to 1947, you can still have been born a “dual citizen” of both Canada and the USA.

In a general sense, I would argue the following:

Although the 1947 Canada Citizenship Act may have been the first comprehensive Canadian legislation to codify Canadian citizenship, this doesn’t mean that Canadian Citizenship did NOT exist prior to 1947.
 
Did Canadian Citizenship Exist Prior to January 1, 1947?

  • The Canada Citizenship Act of 1947 was Canada’s first citizenship Act.
  • Does that mean that Canadian citizenship did NOT exist prior to 1947?
  • Don Chapman of @LostCanadians says:

    “There WAS Canadian Citizenship before the 1947 Canada Citizenship Act”

  • This would mean that a person born prior to 1947 could be a “dual” Canada/US citizen (giving the opportunity to be exempt from the S. 877A Exit Tax).

 


 
In the written words of Canadian Citizenship “historian” – Don Chapman:

Canadian nationality and citizenship came into existence with the passing of the UK British North American Act 1867, in Canada the Constitution Act. The declaration would change no person’s status as a Canadian national or Canadian citizen as defined by current legislation.

The justification for such a declaration is fourfold:

(1) The 2013 decision of the Supreme Court in the case of Canada versus the Manitoba Métis; The decision declared Canadian law based on Canada’s claim by the Attorney-General before the Manitoba Court of Queen’s Bench that Métis and other inhabitants of Manitoba (except persons governed by
treaty) became full Canadian citizens on accession to Confederation in 1870.

(2) In 1921 Canada declared in general law the existence of Canadian nationality. The Act recognized the existence of Canadian citizenship for the purpose of general law. The authority to declare the existence of nationality and citizenship in the 1921 Act was derived from the implied powers of the Constitution Act.

(3) The authority to pass the 1947 Citizenship Act was derived from the implied powers of the Constitution Act.At the opening of Canada’s first Parliament, Governor-General Viscount Monck on behalf of Queen Victoria welcomed Canadians as a new nationality. The declaration in accordance with English common law declared by the Court of King’s Bench in 1608.
The case defined a nation as a territory within His Majesty’s domains that possesses its own Parliament and system of law. (Case of the Postnati. [1572] Eng.R. 64, (1572–1616) 7 Coke.Rep. 1a, 77 E.R. 377.
Also known as Calvin’s Case.)

(4) The Order in Council that proclaimed Canada’s Fourth Census (1901) defined Canadian nationality and citizenship in instructions to enumerators authorized by Sydney Fisher, Minister of Agriculture.

The proposed declaratory Act would declare that Canadian nationality and citizenship came into existence with the coming into force of the BNA Act, in Canada the Constitution Act.

If this reasoning is correct (and I do find it compelling), then the fact that one was born prior to January 1, 1947 is NOT a bar to claiming the “dual citizen exemption.” This would allow one to avoid the toxic designation of “covered expatriate”.

More reasons why, I believe that Canadian Citizenship existed prior to January 1, 1947 …