Remarks by the Deputy Prime Minister and Minister of Finance   - Special Joint Committee on the Declaration of Emergency  (DEDC)

Speech

June 14, 2022

Thank you very much Madam Chair, Members, and Senators.

The work of this committee is important, and I hope my appearance here will be helpful.

I am accompanied here today by the women of finance:

  • Isabelle Jacques, who is the Assistant Deputy Minister
  • Jenifer Aitken, Assistant Deputy Minister, Law Branch
  • Sarah Paquet, CEO, Financial Transactions and Reports Analysis Centre of Canada

My ministerial colleagues have explained how the Emergencies Act was invoked and carried out.

I am here to speak about the economic costs of the occupation and blockade and the measures carried out under the Emergency Economic Measures Order

It was just three months ago that we saw the end of blockades of key border crossings and the occupation of our nation’s capital, doing great damage to Canada’s economy and to our reputation as a reliable trading partner.

Tens of millions of dollars in daily trade were disrupted due to the blockades at border crossings.

According to Statistics Canada, in Coutts, Alberta, about $48 million in daily trade was affected by the blockades.

In Emerson, Manitoba, about $73 million in daily trade was affected by the blockades.

The blockade of the Ambassador Bridge affected about $390 million in trade each day. This bridge supports 30 per cent of all trade by road between Canada and the United States.

The world’s confidence in Canada as an investment destination was being undermined. We fought fiercely to protect Canada’s privileged trading relationship with the United States during the NAFTA negotiations and in the face of the illegal and unjustified 232 tariffs.

We could not allow that hard-won success to be compromised. And we could not allow the livelihoods of Canadian workers to continue to be threatened, just as we were all working so hard to recover from the economic damage caused by COVID-19.

So on Monday, February 14th, more than two weeks after the occupations and blockades began, the Government of Canada invoked, as a measure of last resort, the Emergencies Act to restore public order.

As part of that necessary step, the Emergency Economic Measures Order came into force on February 15th and implemented several temporary financial measures.

The end of the blockades is why, on February 23rd, the government revoked the declaration of a public order emergency under the Emergencies Act and all the temporary measures found in the Emergency Measures Regulations and the Emergency Economic Measures Order

Madam Chair, I’d like to explain the temporary measures that were in the Emergency Economic Measures Order to show why the application of the measures was necessary and effective.

The Order contains measures to limit the funding of the illegal activities that led to the state of emergency — funding from various organizations and individuals.

These measures meant that Canadian financial service providers — not the Government of Canada — were required, without the need for a court order, to freeze or suspend the account of an individual or business participating in the blockades, and to refuse to provide service or to facilitate any transaction relating to funding the illegal blockades and occupation. In practice, they did so based either on information they received from law enforcement agencies, authorized to be disclosed by the Emergency Economic Measures Order, or information collected from their own internal processes.

I’d like to emphasize a very critical point here, that financial service providers made these decisions independently. There was no political direction.

As of February 21st, during the period when the Order was active, enforcement action under the Emergency Economic Measures Order had culminated in the freezing of approximately 280 financial products, such as savings and chequing accounts, credit cards and lines of credit, for a total of approximately $8,000,000, including $3,800,000 from a payment processor. Further, 170 Bitcoin addresses were identified and shared with virtual currency exchangers. 

Law enforcement agencies were authorized to provide information to Canadian financial service providers. This includes the identity of persons and entities believed to be participating in the illegal blockades, if the law enforcement agencies were satisfied this disclosure would help financial service providers apply the Order.

For their part, Canadian financial service providers were directed to review their relationships with anyone involved in the blockades on an ongoing basis and to report the existence of related property and transactions to the RCMP or CSIS.

Madam Chair, as the government said at the time and as proved to be the case, these measures were temporary.

Financial service providers unfroze accounts once the account holders were no longer participating in the illegal blockades.

The other broad category of measures in the Order was specifically aimed at crowdfunding platforms and payment service providers.

We knew that these platforms were being used to support illegal blockades and illegal activity, which was damaging the Canadian economy. The illegal blockades highlighted the fact that crowdfunding platforms, and some of the payment service providers they use, were not fully captured under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Services such as GoFundMe and GiveSendGo collected donations for what was originally a seemingly peaceful protest. They were put in a difficult position when it was established that the blockades were illegal.

Therefore, the Order extended certain anti-money laundering and anti-terrorist financing requirements to crowdfunding platforms and payment service providers, helping to detect and deter illegal activities.

This was intended to help mitigate the risk of these platforms receiving illicit funds and increase the quality and quantity of financial transaction information received by the Financial Transactions and Reports Analysis Centre of Canada, which would in turn make more information available to support investigations by law enforcement.

At the time, I also committed to making crowdfunding platforms and payment service providers subject to anti-money laundering and anti-terrorist financing requirements on a permanent basis. This was a necessary modernization, to bring our laws up to date.

As of April 5th, the government has taken regulatory action to make crowdfunding platform services and payment service provider activities subject to existing requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act for “money services businesses”, on a permanent basis.

These changes cover all forms of transactions, including digital assets such as cryptocurrencies.

Madam Chair, the overall objective of the measures in the Emergency Economic Measures Order was to prevent Canada’s financial system from being used to finance the illegal blockades.

And it worked.

Now that the emergency situation is in the past, I’d like to clear up a few misconceptions about the application of the measures in the Order.

First, the measures in the Order were not retroactive – they only applied between February 15th and February 23rd.

Second, as the RCMP stated at the time, those who made small donations were not the targets of actions taken by law enforcement and financial institutions to freeze accounts. The focus of law enforcement was on organizers and leaders and on the vehicles that were such a critical part of the illegal blockades and occupations.

Financial service providers began unfreezing accounts, credit cards and lines of credit on February 21st due to updated information provided by the RCMP that the illegal activity had ceased. As of Thursday February 24th, all accounts had been unfrozen.

Some of you may have heard stories of freezing of accounts after February 23rd. If an account has been frozen after that date, it is pursuant to court orders and decisions that are unrelated to the measures taken under the Emergencies Act that ended on February 23rd.

Madam Chair, the situation we were facing was a threat to our democratic institutions, to our economy, and to peace, order, and good government in Canada.

The government had a duty to act and we did.

Thank you for allowing me to speak and I now look forward to answering your questions.

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