Madam Speaker, this morning I have the privilege of rising to speak to Bill C-249 on the cryptoasset sector, which was introduced by my Conservative Party colleagues.
This bill seeks to require the Minister of Finance to develop a national framework to encourage the growth of the cryptoasset sector within three years after the coming into force of the act.
The bill states that, in developing the framework, the minister must consult with persons designated by Quebec and the provinces and with experts from the cryptoasset sector. Bill C-249 also provides for reporting and tracking requirements in relation to the framework.
In a sector that is more ideology-driven than factual, the bill points out that cryptoassets have significant economic and innovative potential for Canada and that the government must focus on lowering barriers to entry into the cryptoasset sector, protecting those working in the sector and minimizing the administrative burden.
I will not keep members in suspense for very long. I will say right now that the Bloc Québécois will be voting against Bill C-249.
Before getting into more detail about our position, I would like to remind the House and my Conservative colleagues of some financial advice that the leader of the Conservative Party and member for Carleton gave to all Quebeckers and all Canadians last spring. It is no secret that the new leader of the Conservative Party of Canada dreams of bitcoin and other cryptoasset fantasies at night.
Barely seven months ago, in April, he organized a small staged media event when he went to a restaurant in London, Ontario, and paid for a shawarma in bitcoin. He took the opportunity to recommend that Quebeckers and Canadians invest their savings in cryptocurrency to shield their money from inflation.
What reasoning did the leader of the Conservative Party use to offer this advice?
He used a simplistic—and frankly dishonest—intellectual shortcut to blame the big bad central bank for the inflationary crisis and in the same breath presented the decentralized cryptocurrencies, regulated by the very free market, as a magic solution against inflation.
The problem with the supposed freedom of cryptocurrencies like Bitcoin is that they are also free to crash and burn. I say this with great empathy and compassion for anyone who went through this, but the outcome was quite dramatic for those who followed the financial advice of the Conservative leader by investing in bitcoin in April 2022. Just six months later, they could only watch helplessly as close to 70% of the value of their hard-earned savings had evaporated. Poof.
I would like to hear what the Conservative leader has to say to all these constituents who trusted him and who now must surely feel he has cheated, betrayed and abandoned them. While he claims to care about helping families put food on the table, how can he take advantage of his position and the credibility his role gives him to trot out such irresponsible and dangerous financial advice?
As I indicated earlier, the Bloc Québécois will vote against the Conservative bill. My colleagues and I are convinced that, while cryptoassets do have innovative potential in some regards, the regulatory framework around them must be fleshed out and strengthened so as to make the digital and financial ecosystem in which they operate more transparent and accountable.
Unlike the Conservative Party, we believe that legislative action focused strictly on the growth of the sector, as proposed in the bill, on lowering barriers to entry, and on minimizing the administrative burden would be inappropriate and irresponsible.
The sector has experienced indisputable and dramatic growth in recent years. What it really needs now is not support for growth but a real regulatory framework that limits the risks associated with possession and transactions of cryptoassets.
There are still many issues that require us, as decision-makers, to act with caution and diligence in this matter.
The first issue is, of course, the volatility of cryptocurrencies, which is still extremely high and often inexplicable. It can be correlated to media exposure, and an event as trivial as a simple tweet has previously caused fluctuations of several thousands of dollars in just a few hours for some currencies.
That is why many professional investors see the use of cryptoassets as more of a lottery than a serious investment. Similarly, Paul Beaudry, Deputy Governor of the Bank of Canada, considers them to be more of a tool for speculation than a real means of payment, as its supporters want to present it.
Another issue that cannot be overlooked when we talk about cryptoassets is energy consumption, which ultimately leads us to energy production. That certainly is in the Conservative Party’s wheelhouse. To put it simply, cryptoassets are created by mining. This is not mining from the earth, but rather mining done by many very powerful computers operating at full power to perform extremely complicated calculations.
It is also estimated that the total activity generated by cryptomining uses as much energy as a country like Norway, about 130 terawatt hours. By comparison, Hydro-Québec's electricity sales only reached 50 terawatt hours in 2020. I think that we will have to reflect on what we really want to focus on and what we want to do with our energy production.
It appears euphemistic, then, to say that cryptoassets are energy intensive. As Europe is going through an energy crisis, we must ask ourselves whether priority should be given to these activities rather than heating our homes, schools and hospitals. Moreover, the environmental impact of these activities must not be forgotten. For jurisdictions that do not have the opportunity to produce clean energy like Quebec, the pollution caused by cryptomining is extremely significant.
The third issue regarding cryptoassets, which we cannot ignore, is their use to finance criminal and terrorist activities. There is a real and documented possibility of taking advantage of the cryptoasset sector to launder money and finance terrorist activities due to two aspects inherent in these activities: anonymity and the proliferation of instant transactions.
The launderers take advantage of this sector operating outside of conventional banking systems to convert the proceeds of criminal activities into legal tender. There currently exists a regulatory vacuum, one which organized crime certainly takes advantage of.
I will give a concrete example. At this time, current legislation allows people to convert up to $1,000 per day into cryptocurrency at an automated teller machine without having to verify their identity. There are currently no fewer than eight companies that operate such machines in Quebec and a single person can exchange several thousands of dollars per day. Obviously, this is a real boon for criminal organizations.
Terrorists can use it for similar reasons. Since it is difficult to identify the actual recipient of a wallet, money can be transferred from one side of the world to the other to finance terrorist activities without alerting the authorities responsible for our protection. So much for this party claiming to be the champion of law and order.
My time is coming to an end. I will conclude by reminding you that the cryptoasset sector has grown by leaps and bounds over the past few years. However, there have been bumps along the way, and it is now clear, given the crash of bitcoin and several other cryptocurrencies, that it is better to be cautious and responsible when it comes to this technology, which is a minefield of risks and uncertainties.
Unlike the Leader of the Conservative Party and his party members, who seem to be looking at cryptoassets through rose-coloured glasses, the Bloc Québécois prefers to focus on transparency and responsibility. We are—