Finance Committee on March 14th, 2022

[Dustin Walper]

Some of the good applications—

[Brian Mosoff]

I would add—

[Dustin Walper]

Sorry. Go on.

[Brian Mosoff]

I was just going to add that recent studies show that even though the dollar value of funds being used in illicit ways is rising, that's also just because of the rise in the value of these assets as a percentage of the activity taking place on the networks themselves, rather than centralized platforms, and the percentage of these transactions is falling significantly over time. That's because of better tooling and better monitoring. That's something to keep in mind.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Mr. Walper, were you trying to get in there?

[Dustin Walper]

I was just going to say that on some of the benefits, some of the nuance is that, for example, it gives the ability to dissidents to be able to get access to funding for journalists abroad. There is a very nuanced discussion around how to enable the good applications and minimize the bad.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Yes. That's a discussion I look forward to having with you and others.

In summary, I'm eager to hear about and to facilitate the opportunity, and I also want to make sure that we mitigate the bad. We see the bad in a number of contexts. Sometimes the bad in something is the result of a small number of cases, but the impact of that can be broad. Sometimes it's narrow, but sometimes it's broad. We see that in a variety of contexts.

I really appreciate you all being here and sharing that. I'm here to learn more. I'm looking forward to seeing how we can explore the opportunity and mitigate some of those negatives that we also want to mitigate.

Thank you very much, Mr. Chair. I think that's my time.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

That does end our third round, members. We are moving into our fourth round. We have the Conservatives up first.

MP Chambers, you have five minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

I'd like to follow up with some of this discussion.

Mr. Mosoff, you're an allocator of resources. You're making investment decisions, but you're also involved in the community. I'm just curious about the general reaction in the community, in the crypto community and the investor community or even on the client side, when the Emergencies Act was introduced. What was the general feeling?

[Brian Mosoff]

I'd also point out, before I get into the specific act, that there are some things that globally we have done very well. We were the first to create true spot Bitcoin and Ethereum ETFs. We've led the way in regulation and policy on certain fronts. Platforms and exchanges are starting to come into compliance and have a path towards appropriate registration.

At the same time, there was a large amount of negative reaction to this. Whether that reaction was warranted, I can't really comment, but there were a lot of people wondering if it were an overreach and what implications there would be for platforms in the future.

Will those platforms want to continue, if they're not domiciled here, to service Canadians? I'm not sure. I think certainly new projects that want to build here currently don't have, outside of the act, the ability to perhaps perform certain activities or offerings or participation, but that's a broader conversation around just nationally how we're going to come up with frameworks to make sure that we can be competitive on the global landscape.

There was certainly some negative backlash that the industry will have to combat. My personal concern is more around whether it pushes away banks and audit firms from offering traditional financial services to the good players who are here and who did react appropriately to those measures.

[Adam Chambers, Conservative, Simcoe North, ON]

Just following on the offering of financial services, I have been hearing anecdotally that some crypto start-ups already have challenges getting banking services from the Canadian banks, and in fact actually have to look to the U.S. to get serviced. Is that your experience as well?

[Dustin Walper]

I can probably speak to that—

[Brian Mosoff]

That is accurate—

[Dustin Walper]

Oh, sorry, Brian.

[Brian Mosoff]

I'll let you take it on, but that is accurate.

Despite our being a public issuer, we are very fortunate to have banking relationships and a “big four” auditor. Those were not easy to obtain. I do hear from a lot of other industry players that this is difficult. They come to us for advice—there's pressure from the audit firms, or above them at the CPAB level—on what can be appropriate activities that can be audited. It's still certainly a point of friction in the industry.

I'll turn it over to Mr. Walper to add some colour.

[Dustin Walper]

We're fairly fortunate at this point because we're large enough that we represent significant business for the credit unions and banks we work with. One of them is actually on the east coast, Credit Union Atlantic. It was bold enough to work with us in 2019 and it took the risk.

For new start-ups in Canada trying to get banking, if they're in the crypto space, particularly if they're processing payments, it's nearly impossible even now for them to get banking. This is a significant problem if we want to be a leader globally. We have to solve the banking piece of it because without that, someone can't have a business.

[Adam Chambers, Conservative, Simcoe North, ON]

That's very helpful. I suspect we could talk about this for quite some time.

If I may, I'd just like to turn to National Chief Archibald for a moment for a couple of quick questions.

One of the concerns that I had and that I am also hearing you discuss this afternoon is that some of the individuals who have been involved or have been charged with activities have been charged with public mischief. The challenge is that using the Emergencies Act against individuals engaged in civil acts, or public mischief in this sense, sets a dangerous precedent for when it may be used in the future.

Would you like to expand a little bit more on that concern?

[National Chief RoseAnne Archibald]

I just want to talk about how underlying all of my concerns is the systemic, overt and covert racism and how those impact first nations that are involved in civil actions.

I am a former activist myself, and I have been involved in civil actions and have been charged. I think that ultimately we need a process in this country to deal with outstanding claims, with outstanding land and water issues that are not being resolved by the processes in place, in order to avoid having first nations people feeling as though they have to get involved in serious actions such as blocking roads and highways, which I personally have done as an activist and as a chief activist.

What concerns me about the Emergencies Act is that we're not on a level playing field with non-indigenous Canadians. It's very easy for the Emergencies Act to be used as a tool against first nations people because of systemic, overt and covert racism that exist within the financial institutions in Canada and within the law enforcement institutions and even within government. Those things certainly place us at a disadvantage, in that we can be deemed to be a threat when, in fact, we're not a threat. As the original people of this country, we are being placed in a position and we are being placed as a minority because of genocide and because of legislation.

The implications of the Emergencies Act are far and wide, and that's why I am standing before you today.

Meegwetch.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, National Chief Archibald.

Those are exactly the concerns I have, that we've actually normalized the use of the Emergencies Act now and we need to be careful about how it may be used in the future.

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

We are moving to the Liberals.

MP Dzerowicz, you have five minutes.

Go ahead, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I'm actually going to pick up the baton from where Mr. Chambers left off with Ms. Archibald, if that's okay.

I do not want there to be, in any way, an idea that there is an attempt to normalize the use of the Emergencies Act. I think it was very specific that this was time-sensitive and geographically specific, and that the moment it was no longer needed, it would be revoked, which is what happened after a few days. I think it's important to say that.

Chief Archibald, I am really appreciating your comments, particularly those of the last couple of minutes, in which you've really articulated your concern. I do agree that there is systemic racism and unconscious bias that often we need to be reminded about—all the time, every day, every moment—because it's easy to forget.

Because you have said this a number of times, I've become a little concerned about it. You've been talking about how you don't want first nations to be seen as terrorist or extremist groups. I just want to make sure that there is nothing in the current Emergencies Act order that in any way identifies first nations as terrorist or extremist groups. Can you confirm that?

[National Chief RoseAnne Archibald]

My concern is that the act is a tool, and the tool itself can actually name and place labels upon people. That's my concern.

When we talk about the Emergencies Act, there has been a lot of talk about these far-right extreme groups that were linked to this “freedom convoy”. There was a lot of talk about anti-terrorism in the way of financing. I just want to be clear that those are the links that I'm making, and I want to be clear that first nations have rights in this country.

I'm really grateful that you've acknowledged the systemic racism—the overt and covert racism that exists—and what are we doing to address that? Certainly, when you look at the Emergencies Act, it has to be taken into account as you move forward on perhaps amending this act or engaging first nations on the future invocation of this act.

[Julie Dzerowicz, Liberal, Davenport, ON]

Chief Archibald, I think it has come across loud and clear the need to engage if we were to invoke this again. Hopefully, we don't have to—at any time soon or ever—invoke this, but I just want to make sure that there's nothing currently in the act that actually identifies first nations as part of extremist groups or terrorists. I appreciate your comment your indicating that the consultation has to include first nations moving forward if we were ever to enact this act.

My other comment is that you've spoken about how, if this type of protest or occupation were started by first nations, you feel there would have been a different response by local police. You started your testimony and presentation today about this. I do want to acknowledge that I've heard from a number of different groups—the Black community, visible minorities—indicating similar things.

What I want to ask you, just very quickly, because I know that there are two other inquiries that are under way right now.... One is a House-Senate committee that's under way right now and is looking at the enactment of the act, at whether it was needed and at how the act has been used. Also, I believe that the City of Ottawa is looking at its police force and what happened. I want to ask whether you, as the chief, have had any conversations directly with the former chief of police or the current acting chief of police about your concerns.

[National Chief RoseAnne Archibald]

I don't want to localize it just to Ottawa. There are problems in this country, and this government has made some headway on some issues, but tackling the systemic racism that exists in all law enforcement agencies is a problem that needs to be solved. Tackling systemic racism within the banking and financial institutions is a problem that needs to be solved. These issues are tied to what this committee is looking at and so that, to me, is more important.

I'm the national chief. I'm not the national chief of Ottawa. I'm the national chief of the whole country. When I'm talking about systemic racism, it exists everywhere. How do we deal with that? The partner for me is the federal government. It's Minister Mendicino. It's Minister Blair. It's other people who are at that level who I would have those discussions with.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

Then I have one more question.