Declaration of Emergency Committee on June 14th, 2022

[The Joint Chair, Hon. Gwen Boniface (Senator, Ontario, ISG)]

I call this meeting to order.

Welcome to meeting number 10 of the Special Joint Committee on the Declaration of Emergency created pursuant to the order of the House on March 2, 2022, and the Senate on March 3, 2022.

Today's meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021.

I'd like to remind all those present in the room to follow the recommendations from public health authorities, as well as directives of the Board of Internal Economy to maintain health and safety.

Should any technical challenges arise, please advise me, as we may need to suspend for a few minutes to ensure all members are able to participate fully.

Witnesses should also be aware that translation is available through the globe icon at the bottom of their screen.

We have with us today, from 6:30 p.m. to 8 p.m., the Honourable Chrystia Freeland, Minister of Finance.

Welcome.

She is joined by officials Isabelle Jacques, assistant deputy minister, financial sector policy branch; Jenifer Aitken, acting assistant deputy minister, law branch; and Sarah Paquet, director and chief executive officer, Financial Transactions and Reports Analysis Centre of Canada.

Minister, we welcome you. You have five minutes for your opening comments.

The floor is yours. Please begin.

[Chrystia Freeland, Liberal, Minister of Finance]

Thank you very much, Chair, members and senators.

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

I am accompanied here today by the women of Finance, Isabelle Jacques, the assistant deputy minister; Jenifer Aitken, also assistant deputy minister of the law branch; and Sarah Paquet, the CEO of the Financial Transactions and Reports Analysis Centre of Canada.

My ministerial colleagues have explained how the Emergencies Act was invoked and carried out. I'm 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 the blockades of key border crossings and the occupation of our nation's capital, which were 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 StatsCan, 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 blockade.

The blockade of the Ambassador Bridge affected about $390 million in trade each day. This bridge supports 30% 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 section 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.

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

In the context of that necessary measure, the Emergency Economic Measures Order came into force on February 15 and introduced a number of temporary financial measures.

As a result of the blockades, on February 23, the government revoked the state of emergency declaration under the Emergencies Act as well as all temporary measures provided for under the Emergency Measures Regulations and the Emergency Economic Measures Order.

Madam Chair, I would like to explain the temporary measures provided for under the order and to show why the implementation of those measures was necessary and effective.

The order contains measures designed to limit financing of the illegal activities that led to the state of emergency, that is to say the 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 related 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 on 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 21, 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 million, including $3.8 million 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 included the identity of persons and entities believed to be participating in 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 has proved to be the case, these measures were temporary.

[The Joint Chair, Hon. Gwen Boniface]

Minister, your time is up.

We can now go to questions.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Okay.

[The Joint Chair, Hon. Gwen Boniface]

We'll begin a five-minute round, starting with Mr. Motz.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

Thank you, Chair.

Thank you, Minister, for being here.

Being that you're the most senior official who's been here in this committee so far, will the government waive cabinet confident and solicitor-client privilege on the documents ordered by this committee?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you for the question, Mr. Motz.

The government has received the motion, and the public service is working on it diligently. I think everyone here appreciates the importance of cabinet confidentiality.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

Thank you.

This means that we won't get anything, probably.

Ms. Freeland, senior officials from your department who are with you here today appeared before our committee earlier this spring. Yet, none of the witnesses you offered could speak to the economic implications of the protest in February that we asked them about. It's convenient for you, considering that you put great stock not only in the invocation of the act, but also in your statements today claiming economic justifications for declaring a national emergency.

Will you make available to this committee the appropriate expert witnesses who can actually defend these economic claims?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I can quote two experts, if you'd like, right now.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

I don't want to have them quoted. I want to have the names of those from your department who can come here to this committee.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

An expert I think worth listening to is Flavio Volpe, president of Canada's Automotive Parts Manufacturer's Association. He was quoted widely in the press.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

I'm sorry, the question was about witnesses from your own department. Who from your department can answer specific questions on the economic impact? We asked last time and couldn't get an answer. Can you provide them?

Just a yes or no would be good. If you could give us those witnesses' names and provide them, that would be awesome, please.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

As a former journalist, Mr. Motz, I always believe in going to primary sources.

Another source whose testimony I would urge you to refer to is Michigan representative Elissa Slotkin, who made some very concerning comments during the blockades about the implications for the United States' trading relationship with Canada.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

Again, that doesn't necessarily have any impact on my question or the answer to my question on the expert witnesses from your department.

My question, then, is relating to your department. Did anyone in government instruct public servants to conjure up an economic narrative to support its decision to invoke the Emergencies Act?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

No.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

Was the government informed at any point by public servants that the economic data either didn't exist, did not answer the questions you wanted to be answered, or did not produce the results you preferred to hear? If so, did the government instruct those public servants to generate numbers to back up its claims, regardless of the data problems?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Motz, I am Canada's finance minister. I was our chief negotiator during the NAFTA negotiations, or I led the negotiations, assisted very ably by Steve Verheul. I personally had many conversations and read many reports that caused me to be very concerned about the economic consequences of the illegal blockades and occupation. I spoke directly with Canadian business leaders, who told me that they were hearing from investors that their confidence in Canada, as an investment destination, was shaken.

I spoke directly from and read the comments of many U.S. political leaders who spoke about how the blockades—

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

I'm sorry, Minister, but—

[Chrystia Freeland, Liberal, University—Rosedale, ON]

—were encouraging protectionism against Canada.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

—my question was about within your own department. You may not be aware of this, but there's a reason I'm asking that question.

Just so that you are aware, in your opening statement you made some suggestions that.... The word you used was that trade was “disrupted”. But Stats Canada has reported that the cross-border trade in Ontario and Alberta during the time of the blockade was actually up 16% compared with last year. Although disruptive, inappropriate and illegal, it appears that the blockade at the borders did not have the economic impact you're suggesting, and it certainly did not warrant the use of the Emergencies Act as you're suggesting.

I have one other question. You said you froze around 280 accounts—around $8 million, you suggest. What caused the government to continue to freeze those bank accounts after the blockades were cleared and the trucks were gone from Wellington?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I have to go back to your previous assertion about the economic damage, Mr. Motz. I was very gravely concerned about the damage to our trading relationship with the United States and our reputation as a reliable partner.

I have to quote Representative Slotkin, who said, “The one thing that couldn’t be more clear is that we have to bring American manufacturing back home to states like Michigan.”

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

So you're disputing Stats Canada?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Representative Slotkin said, “we need to continue the work”—

[The Joint Chair, Hon. Gwen Boniface]

Mr. Motz, I apologize. Your five minutes is up.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

Thank you.