Debates of April 5th, 2022

Opposition Motion—Spending on national defence

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, it is that whole “fail to plan, plan to fail” analogy. However, I would say, even going back to former president Kennedy, there was not the infrastructure to go to the moon at the time when he made the call to say that they were going to get there, but he made the call to say that they were going to get there. I think we need to have the leadership, from the entire House, say that we need to get there. Let us find out what we need, in terms of procurement.

I have heard, first-hand, the problems with some procurement, some of the never-ending plan changes, that a shipbuilder could never keep up with the changes from the bureaucracy and different ministries around that stuff. We need to set the course to get there and set a timeline to do it, rather than just pontificate in the clouds about some aspirational goal that we will get there someday.

We need to set a timeline, back it up with the funds that are expected, that 2% being part of that, and then we will get there.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Madam Speaker, although I agree with the substance of the motion, I am somewhat uncomfortable with the motion itself. It talks about increasing spending.

We have been here for weeks, and I have heard my Conservative friends criticize the government for spending too much. If we were to increase military spending from 1.37% to 2% of GDP, that would represent $16 billion in additional annual spending at a time when we need to help seniors, increase health transfers and invest in housing. Where will this money come from? Money does not grow on trees.

My question is simple: Must we choose between social housing and tanks?

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, money does not grow on trees in Quebec, nor does it anywhere else in our country, or anywhere for that matter. We know it is a very expensive endeavour to do this, but it is an accurate response. Indeed, the government is spending a lot of money, but is it spending it in the right direction? That is a huge question mark. We would disagree on how the government is spending money. It is one thing to throw money at a problem. However, to do it in the proper way to get things done, that needs to be done efficiently with the proper procurement process, with the right targets set and the right timelines. That is where we differ from the government across the way.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, following up in that vein, last week we were debating a Conservative motion that called for no new taxes and a return to balance. Today, we are talking about a motion that would represent about $30 billion, give or take, in new spending. I am just wondering about what we often hear from Conservatives. I know the member is saying we would spend differently, but where is the $30 billion of spending that he thinks ought to be cut in order to make room for these priorities?

While I am on my feet, I would mention that I was part of a foreign affairs study in 2019 of Canadian sovereignty in the north. I know some members are looking for examples of where New Democrats think we could spend in military spending. That report, which was a unanimous report, is a great place to start.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, I have read that report. It is 28 recommendations, and it is a great report and a place to start and really build our defences.

I will go back. The NDP premise today has been all about priorities for money and other things that are important. I do agree with the member that things are important, but if we cannot defend our own borders and our own country and our own people and, where premiers are asking to be defended in the north if we cannot do that to start, then I do not know where we will be if somebody else decides to set up their shop on our shores. I would say that is where we need to spend the money.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Resuming debate. I apologize, but I am going to have to cut the length of the member's speech. He has seven minutes to deliver his speech.

The hon. member for Trois-Rivières.

[René Villemure, Bloc, Trois-Rivières, QC]

Madam Speaker, Talleyrand, a diplomat whom I admire, always said that if it goes without saying, then it will go even better if we say it. Let us say what must be said.

I am pleased to rise to speak today on this Conservative opposition day. Knowing that the devil is in the details, I want to take this opportunity to try to better understand this proposal which, while it seems valid, does require some reflection.

Unlike being a member of your local book club, NATO membership brings with it certain obligations. One such obligation is that member states allocate 2% of their GDP to defence-related expenditures. This 2% is a figure, a symbol. I know the Liberals are fond of symbols. In fact, it seems to me that the Liberal government is a little too focused on images, on symbols and on promises that are all too often meaningless. Meaning is the way. It is the path. It provides direction. Without meaning, we go astray.

As we have learned over the past few years, Canada has gone astray in terms of foreign affairs and national defence. It is hard to believe, but just four of the NATO member countries spend less than Canada on defence. As Canada, with its jet-set diplomacy, travels the world lecturing everyone about Ukraine, it spends less than Belgium, Spain, Luxembourg and Slovenia. Yes, Slovenia. That is shameful. Slovenia's biggest resource is comedians. Gaspard Proust, a worthy successor of Pierre Desproges and master of irony, loves to say to whoever will listen, “I'm a disillusioned Cartesian. I think, therefore I am, but I don't give a damn.”

Canada does not seem to give a damn about its defence policy.

Beyond the symbolism, let us talk about what it all means. What will Canada do if it decides to spend 2% of its GDP, as required by NATO? Will Canada do that just to say that it did it? Will Canada do it just to look good, for its image, to contribute to world peace? Why will it do so?

Spending is one thing. Making good spending choices is another. We know the Liberal government loves to spend, but making an effective contribution to global peace is a different story. Right now, the Canadian Armed Forces have a serious personnel issue.

Let us talk about recruitment. The government is having a hard time recruiting new soldiers. The Canadian Forces were hoping to recruit almost 6,800 people last year, but they got only 2,800. The forces themselves admitted that that was not even close to the target, which was impossible to achieve. Even though the ads suggest excitement with that “There's no life like it” slogan, it is clear that major operations are few. Instead it is mostly training, training and more training, which can be discouraging for people who are looking to make a real contribution. Recruitment does not deliver on its promises. Right now, equipment is going unused because there are no people to use it. The labour shortage is affecting the armed forces too.

Let us talk about retention. In 2018, the Auditor General released a report stating that the Air Force had only 64% of the qualified pilots needed for operations and that 22% of technician positions were vacant. The Navy has ships, but few sailors. Without more sailors, the existing personnel are overworked, and this leads to exhaustion and disinterest. The lack of workability, the lack of excitement in the training operations I mentioned earlier, such as Operation Presence and Operation Reassurance, is disturbing. This does not speak to the “There's no life like it!” challenge. It does not help motivation.

Soldiers undergo six months of intensive training to go and do what? To train even more, except somewhere else. That is not very interesting. The situation is even worse for reservists, who have fewer opportunities to deploy. They are being asked to leave their civilian jobs to join the forces, with no guarantee of deployment afterwards. Let us not forget the pandemic. Courses were cancelled. Training was done online. Soldiers had to isolate. There was nothing to motivate anyone. There was also a lack of proper leadership.

Possible solutions do exist. The deployment system must be reformed. We have been saying this for many years, but it must be done.

We also have to do more to help forces members get settled and housed. The cost of homes, as we hear every day in the House, is skyrocketing, even for the military. Inflation is affecting our soldiers.

We must also give francophones—and this is very important to the Bloc Québécois—the opportunity to stay in francophone communities. Sending Quebeckers to anglophone provinces is a growing source of hardship for a family that does not necessarily speak the language and will suddenly have to learn to live in English. Many francophone parents end up choosing to educate their children in English instead of French, which we think is a shame.

I will sum up. As we can see, spending without ensuring that there is a solid foundation, without first ensuring that there are pilots in the planes, is reckless, to say the least.

I could not leave here today without making reference to a NATO exercise called Cold Response that is under way in Norway. More than 30,000 soldiers are participating in this operation, including 10 Canadians. Just imagine the size.

The Bloc Québécois will support the Conservatives' motion while remaining wary of the Liberal government, which puts empty words ahead of meaningful action. I invite the Liberal government to stop repeating its “we are there, we were there” mantra. Instead it should do something meaningful to keep the Canadian Armed Forces off the list of delinquent NATO members.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

It being 5:15 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply. The question is on the motion. Shall I dispense?

[Some hon. members]

Agreed.

No.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

[Chair read text of motion to House]

If a member of a recognized party present in the House wishes to request a recorded division or that the motion be adopted on division, I would invite them to rise and indicate it to the Chair.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Madam Speaker, I would like to request a recorded division.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Accordingly, pursuant to order made on Thursday, November 25, 2021, the division stands deferred until Wednesday, April 6, at the expiry of the time provided for Oral Questions.

[Chris Bittle, Liberal, St. Catharines, ON]

Madam Speaker, I rise on a point of order.

I am going to attempt time travel again. It is improbable for a place like this, but if you seek it, I believe you will find unanimous consent to see the clock at 5:30.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Do we have unanimous consent to see the clock at 5:30?

[Some hon. members]

Agreed.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

It being 5:30, the House will now proceed to the consideration of Private Members' Business, as listed on today's Order Paper.

Encouraging Growth of the Cryptoasset Sector Act

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

moved that Bill C-249, An Act respecting the encouragement of the growth of the cryptoasset sector, be read the second time and referred to a committee.

Madam Speaker, I rise today to speak to my private member's bill, Bill C-249, the encouraging growth of the cryptoasset sector act. It has been 14 years since work conducted by Stuart Haber, W. Scott Stornetta, and Dave Bayer was used by a person operating under the pseudonym Satoshi Nakamoto to launch a concept called blockchain.

Since the Nakamoto paper was published, the concepts it contained have been operationalized the world over to launch a pantheon of innovative products and practices that are revolutionizing how people interact and transact with each other. Canada’s Parliament has yet to debate the cryptoasset sector. This debate today marks the first time we are doing so.

I am going to break down the public policy challenge before us today in six parts. They are what cryptoassets are, why the sector is important to Canada, why Parliament needs to turn its attention to the sector, why this bill is the best approach for Parliament to take in the matter, problems this approach will prevent, and my desired approach to building consensus for this model.

Let us talk about the first point. What are cryptoassets? Within my bill and within my speech today, I use the term “cryptoasset” and define it as, “digital assets that are secured by means of cryptographic systems, including the blockchain system, that do not rely on a central authority and are based on algorithms agreed to by the majority of users.”

Cryptocurrencies, such as Bitcoin and Ethereum, are one type of cryptoasset. Transactions use blockchain to record transactions and issue new units, as opposed to fiat currencies that have a central issuing or regulating authority. Non-fungible tokens, or NFTs, are another cryptoasset. NFTs are digital assets that represent real-world objects such as art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos.

Rather than spend the limited time I have today breaking down the technical aspects of how cryptoassets operate, I encourage colleagues who are not familiar with the subjects to spend some time watching the multitude of videos, reading the articles and looking at the other educational resources that are now available.

I will highlight, however, that a lack of education on the topic among legislators and public servants is a problem that my bill attempts to resolve. The goal of this would be to have public policy happen in an environment based on knowledge and public consultation, rather than polarized partisan interests.

Why is the sector important to Canada? First, cryptoassets represent an important sector that could help to diversify and grow the Canadian economy. To give colleagues a sense of the size of this industry, one recent report suggests that the global cryptocurrency market reached a value of $1.782 billion U.S. in 2021. Looking forward, the publisher of this report expects the market to reach $32.4 billion U.S. by 2027, exhibiting a compound annual growth rate of 58.4% from 2022-27.

The global market for another type of cryptoasset, non-fungible tokens, is expected to grow from $14 billion in 2021 to $21.3 billion in 2022 at a compound annual growth rate of 52.1%. The market is expected to reach $82 billion in 2026 at a compound annual growth rate of 40.2%. Canada should be a natural home for this type of innovation and investment.

Many view the decentralized nature of cryptoassets as an attractive feature in and of itself. By removing intermediaries from computer networks, distributed ledgers can facilitate new types of economic opportunities that were not possible before. The blockchain technology underlying Bitcoin and other cryptocurrencies has been hailed as a potential game-changer for a large number of industries.

Another common reason for investing in cryptoassets is the desire for a reliable, long-term store of value. This property makes cryptocurrency attractive to people who are worried about things such as bank failures, or so some rationale goes.

This brings us to why Parliament needs to turn its attention to the sector. As with any industry, there are massive potential benefits to Canada, as well as potential pitfalls. The call to us, as legislators, should be to find a path that promotes growth and investment in the sector within Canada, while protecting those working in the space, as well as consumers.

Many innovators and proponents of cryptoassets in Canada are actually calling for the federal government to use its convening power to provide policy clarity to the industry. The current lack of clarity, particularly on safeguards to protect those working in the space, is seen as an impediment to investment. That is to say, who would invest in a sector that is likely to be regulated at any time, but likely by people who know little to nothing about how the industry operates? The same could be said for government investment in the sector.

Further, a significant amount of jurisdiction for policy related to the sector falls to the provinces. A patchwork of rules and regulations is popping up across Canada. Provincial jurisdiction must be respected, but the federal government could have a role to play in convening provinces to establish an opt-in set of harmonized policies that would make it easier for investors to operate and to provide safeguards.

At the same time, given the newness of the sector and its rapid pace of growth and innovation, there are risks. Education to help investors evaluate risk could benefit the sector. Specifically, a broader public understanding of what is real and what is speculative mania, what is protected by government regulation and what is not, how to prevent digital asset theft, and how cryptoasset volatility occurs, could benefit the sector, as could safeguards that are present for other asset classes such as traditional securities to prevent fraud and illegal activities.

High profile instances of alleged fraud, such as the QuadrigaCX scandal, which many Canadians will be learning about via the Netflix film on the topic this week, underscore the need for what we are discussing today. Our Parliament should also be seized with this issue because other jurisdictions are well ahead of us on this matter. If we continue to lag in setting a framework for Canada, this will become an impediment in future negotiations regarding trade and will drive talent and capital away from Canada to other jurisdictions with more robust frameworks.

For example, the European Union has recently introduced its proposal for a new EU law on cryptoassets under the Markets in Financial Instruments Directive. The European Blockchain Partnership is also planning a pan-European regulatory sandbox in co-operation with the European Commission for data portability, business-to-business data spaces, smart contracts and digital identity. This will cover sectors including health, the environment, mobility, energy and more.

Last month, U.S. President Joe Biden signed an executive order directing his federal government to come up with a cryptocurrency plan. The order will coordinate efforts among financial regulators to better understand the risks and opportunities presented by digital assets, particularly in the areas of consumer protection, national security and illicit finance.

The Biden administration stated that this was in response to the explosive growth in digital assets and a desire to maintain American technological leadership. The results could shape the contours of a rapidly innovating industry, yet Canada has not moved forward in this regard. At the same time, the innovative functions of blockchain technologies and the decentralized essence of how they function should not be hampered by a lack of clarity or knee-jerk reactions from legislators.

Those who believe that cryptoassets are the means to all sorts of evils are missing the point as much as those who might profess that cryptoassets without any attached policy are the magic wand for all our ills. This is exactly what is happening here in Canada. The political debate on cryptoassets is becoming polarized before we even begin to discuss it in this place.

Some in Canada are advocating for policies that would lead to bans of many types of cryptoassets, which would be a colossal blow to a potential enormous economic boon for our country. On the other hand, some are openly advising the public that cryptocurrencies, which are volatile, currently subject to an enormous amount of regulatory uncertainty and untested as an inflationary hedge against periods of sustained high inflation, are good ways to solve Canada’s inflationary problem.

Rather than go down the path of reactionary populism or highly damaging knee-jerk over-regulation, we should choose a better way. That brings me to what my bill would do.

The bill would require the Minister of Finance to develop a national framework for the cryptoasset sector and, in developing the framework, to consult with persons working in the sector who are designated by provinces and territories. It would require the Minister of Finance to formally ensure that cryptoasset experts are leading voices in the policy development process. It would also be open to public submissions.

Given the newness of the sector, the bill would also enshrine consultation of innovators who work in the space, while asking those who traditionally have primary access to the finance minister on such matters, such as lobbyists and public servants, to engage via their traditional access routes so that a fulsome position on what the government should or should not do is developed. It would enshrine provincial jurisdiction by ensuring that any framework would be on an opt-in-only basis for the provinces, and would require the Minister of Finance to ask the provinces for input during the consultation process. This would prevent policy from happening behind closed doors in the federal government without more open consultation.

The bill takes an optimistic view of the sector, rather than pessimistic. That is, it could be an important part of the Canadian economy. Other, more pessimistic views that have been used in other jurisdictions have functionally kneecapped the space to the detriment of those nation’s economies.

The bill would ask the minister to ensure Canada remains an attractive place to attract and retain investment and talent, while protecting those who work with cryptoassets. Most importantly, rather than prescribing any particular policy, the bill would create a mechanism to formally engage the expertise of cryptoasset talent in policy development. It would require the framework to be reviewed by committees of the House and the Senate, and it would require this work to be done within a three-year period.

My rationale for putting this bill forward is to depoliticize what is becoming a polarized discussion of the space and to open the policy process to those innovators who need us to support them but also not set unnecessary roadblocks that would stand in their way. I am hoping that, if this bill passes, innovators, provinces and those interested in cryptoassets will have a clear and productive mechanism to work with the federal government to drive common-sense public policy that will see Canada become a world leader in this space.

Many innovators, cryptoasset practitioners, bankers, lawyers and members of the general public have expressed great excitement about this open and novel approach to setting public policy for the cryptoasset sector. In fact, I have had legislators from other jurisdictions around the world look at this as a novel approach to tone down the rhetoric on the subject and actually do something that resembles work, which could hopefully be duplicated on a larger scale.

One particular example that I would like to highlight, with regard to feedback, is from Morva Rohani, the executive director of the Canadian Web3 Council. She says, “Bill C-249 has launched a long overdue public policy discussion on the benefits of cryptocurrencies in Canada. The Canadian Web3 Council is supportive of the development of a national framework to encourage the growth of the cryptocurrency sector in consultation with the industry.”

I hope that this bill will give an opportunity for colleagues of all political stripes to educate themselves on cryptoassets and to develop their party’s particular policy stances on the challenges and opportunities the sector presents to our country from a place of knowledge and sound judgment, rather than populism or knee-jerk reactions to regulate away anything new.

To that end, I want to state to all members of the House that I am open to amendments to this bill. I tried to present a framework that could be rigorously reviewed by the finance committee members and witnesses, with constructive amendments to be made on the scope or content provided. If a colleague wants the bill to do more, I encourage them to take it to committee and to amend it.

I hope that colleagues will evaluate this bill in the spirit that it is intended to evoke in the House, and that is a supportive, cross-partisan approach to nurturing a nascent and highly important innovative economic opportunity for our country.

[Kody Blois, Liberal, Kings—Hants, NS]

Madam Speaker, I want to thank the member for Calgary Nose Hill for bringing this important discussion to the House. She articulated in her speech how we really do need to have important conversations about cryptocurrency in the future and how it works. Again, in that spirit of trying to be not partisan, I have read through the bill. I think, by and large, the framework and the idea of forcing those conversations and making sure that we are addressing, as legislators and as lawmakers, how we position this industry in the days ahead is really important.

I looked at subclause 3(1), in terms of the fact that the framework is to “encourage the growth” of the sector. I may agree with that. I certainly have to get my own head wrapped around it, and this will be an important discussion about where I stand on this issue.

Would the member be open to an amendment around, as opposed to saying pro-growth in this sector, at least exploring ways on the administrative burden? She mentioned about not trying to be too partisan one way or the other. Would she address that point on the language and whether we can have something perhaps a little more neutral in saying how best to move forward with the sector writ large?

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Madam Speaker, I look forward to debate on the topic. I would say that the industry is a way to diversify Canada's primarily natural resource-based economy, something that the government has stated it desires to do. I would like to hear from the government or government members, even off-line, why “growth” would be a problematic word in this context.

I do not think that growth is necessarily incongruent with the need to look at some of the safeguards to protect those who are working in the space but, again, if the bill gets to committee, I really hope that the question the member asked is what is asked to witnesses and is what is discussed among other committee members, so that what comes out of Parliament is something that sends a signal to industry that Canada gets this.

We want to see growth in innovative new sectors. At the same time, we also want to address public policy challenges that have been brought to the forefront without, as some jurisdictions have said, legislating away any potential economic opportunity.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Madam Speaker, I thank my hon. colleague from Calgary Nose Hill for her speech. She told us a lot about how cryptocurrencies create such great opportunities.

Peter Callaghan, commander of the Toronto Police Service's financial crimes unit, said, “Cryptocurrency in general is a problem for us, and we realized early on that it was a money laundering tool that could facilitate criminal transactions such the sale of drugs and guns. That is exactly what criminals are doing.”

My question is simple: Is that what the member for Calgary Nose Hill meant when she was talking about great opportunities?

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Madam Speaker, that is an odd question. Regular currency can be used to conduct illegal activities as well. The challenge that the Toronto police outlined in that example is that the framework that might be used to detect or prevent that in this emerging space is something that is worthy of discussion and the federal government, as I have outlined in this bill, likely has a convening role in that regard.

What I worry about is that the industry itself is becoming polarized, as per that question. I would like to see the industry not be labelled bad or good, but that we talk about how we put a policy framework in place that both encourages growth and also safeguards those who are working in the space and those who are consumers.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Madam Speaker, I thank the member for Calgary Nose Hill for putting the bill forward in such a non-partisan manner.

There is a huge opportunity for Canada. We just need to look at what happened with Ethereum. Ethereum was largely developed in Canada, but has moved to Switzerland. Why? It is because countries like Switzerland and Japan have clearly laid out national rules that explain what kind of development, what kinds of tokens, what kind of crypto, what kinds of applications can fuel the blockchain industry, particularly when we look at the opportunities of Web 3.0.

I have spoken with people in this space, innovators who simply want to be able to get a bank account so they can start. Unfortunately, there are many misconceptions with regard to the industry. I was hoping that the member might be able to point out some of the challenges Canadian innovators have had and continue to have.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Madam Speaker, I would answer my colleague's question in the context of my Bloc colleague's question. The industry itself is not inherently bad or good. It is what we as a country choose to make of it. Any province, including the province of Quebec, would have huge investment opportunities chased away if we overly politicize this. I hope that does not happen.

[Jenna Sudds, Liberal, Parliamentary Secretary to the Minister for Women and Gender Equality and Youth]

Madam Speaker, I am thankful for the opportunity to speak today on this important private member's bill. I want to thank my colleague across the aisle, the member for Calgary Nose Hill, for bringing the bill to the House of Commons.

How Canadians use money and make payments is changing, thanks to the emergence of new digital technology. Bill C-249 seeks to understand the benefits of cryptocurrencies and these new technologies. I commend the member opposite for inspiring discussion on this emerging economic sector. This is an important debate to be had.

I first want to highlight the benefits that cryptocurrency has on Canada's economic growth and the future of money in our country.

Billions of dollars of wealth has been created in the cryptocurrency space. Companies are getting on board. Walmart, Reebok and IBM have implemented crypto and blockchain solutions to maintain the transparency and integrity of their supply chains. Internationally, cryptocurrency is a useful tool. After the illegal invasion of Ukraine by Russia, the Ukrainian government pivoted to accept donations of cryptocurrency to fund its military defence and humanitarian aid. They raised over $100 million in support.

Even residents in my riding use cryptocurrency for personal investment opportunities, and I am sure the same can be said for constituents in ridings across our country. It is a popular and growing investment. There are undeniable benefits to cryptocurrency, and the hype to invest is certainly growing. However, the sector does remain under-regulated.

Governments around the world have their work cut out for them to craft legislation and regulate this new technology. Bills like Bill C-249 make important contributions to the debate on how to regulate cryptocurrency. However, I am concerned that it is narrow in scope. While it certainly highlights the benefits of cryptocurrency, I am concerned that it does not necessarily address the risks involved in the cryptoasset sector. Specifically, it does not address the potential vulnerability and financial instability inherent within the cryptoasset industry. These risks, vulnerabilities and instabilities need to be accounted for as we move forward.

As we transition into a digital world, governments must ensure that cryptoassets have proper oversight. Things like cybersecurity provisions must be established for these sectors. Simply, as cryptocurrencies rise in popularity, Canada needs the proper regulatory infrastructure in place to guide, shape and inevitably regulate the growth. Without these safeguards, we put the safety and security of Canadians at risk.

Of utmost concern to me is that we cannot overlook the dark elements that can be a consequence of the unregulated growth of cryptoassets. Around the world, people in the black market are trying to legitimize their wealth by venturing into the crypto space. This illegal and unregulated activity has posed unintended, or perhaps intended, consequences to economies and democracies around the world.

Over the last month, we have seen the Russian oligarchs use cryptoassets to circumvent western economic sanctions and enable the illegal invasion of Ukraine. This allows Russian oligarchs to preserve their wealth amidst the Russian economic crash. It is undermining the international community's economic sanctions and, most importantly, it is enabling the perpetuation of the atrocities that Russia has been committing against Ukraine.

Closer to home, there is also evidence of the use of cryptoassets in illegal activity as well. Just last month, cryptocurrency was identified as enabling the illegal occupations and blockades here in Ottawa, Windsor and Coutts. Digital currencies allowed protesters to receive global donations without any obstruction or regulation. The freedom convoy's own cryptotoken was designed in such a way as to make it difficult for our law enforcement to connect the individual donors to the actual funds, and this is an evolving problem.

Without proper regulation, the presence of cryptocurrency and its illegal activities will continue. Digital currencies undoubtedly appeal to people looking to evade the scrutiny of law enforcement. They are decentralized, which makes it difficult for government to know what is happening. To this point, I reference Matthew Burgoyne, a leading Canadian digital currency lawyer. He stated that, when faced with scrutiny, “crypto can simply be transferred to another wallet address...and it can continue to be transferred in an effort to obscure the original source, or in an effort to remove the funds as much as possible from the wallet that was frozen.”

As digital currency moves from wallet to wallet, it gets harder to track by law enforcement. Without proper regulation at the federal, provincial and territorial levels, cryptocurrency could become a vehicle for abusive transactions, facilitating money laundering, terrorist financing, criminal activity and tax evasion. Transactions involving cryptoassets are also vulnerable to fraud. There is currently inadequate investor and consumer protection for these activities.

The safety and security of Canadians' financial activities are of course always of central concern to our government. Therefore, as we move forward and we craft policy and cryptocurrency legislation, our legislation must ensure that we adequately address these risks. It cannot simply focus on promoting unbridled growth of the cryptoasset. I fear that this is what we would do with the current version of Bill C-249. Our policies must also clearly delineate the shared jurisdictions of this file. Under our constitutional conventions, the federal government must consult with the provinces and their securities regulators on possible regulations to cryptocurrencies. Currently, I do not believe that this bill would do that.

In addition, international institutions and partners also play a key role in our policymaking. Cryptoassets are a transnational asset. Regulating them requires co-operation among countries. We should ensure that international experts from other jurisdictions are included in our policy-making as we move forward.

We must understand the risks of digital currencies just as much as we understand and promote the benefits of them. Cryptocurrencies have numerous benefits locally, federally and internationally. There is no doubt of that. However, without thorough regulations being implemented, these benefits may be outweighed by the risks. There are real conversations that need to be had as citizens, as members of Parliament and as governments, on what the future of money is going to look like. Those conversations must happen sooner rather than later as more and more Canadians invest in cryptocurrency.

Although I do not believe that in its current state this bill adequately addresses those risks, I thank the member for Calgary Nose Hill for bringing this important discussion forward and being open to how it evolves as it moves through the House.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Madam Speaker, I would like to begin by thanking the member for Calgary Nose Hill for Bill C-249, which is a subject that I find to be most interesting.

The bill is about cryptoassets, cryptocurrencies and virtual currencies. It is truly fascinating because it covers extremely innovative technologies that are being adopted by the more formal economy. We know that cryptoassets and cryptocurrencies are based on transactions authenticated by blockchains. These transactions can take place person to person and on the web, but without any intermediary. It is understandable that those who love technology, especially in the banking world, are fascinated by this and why we can see that there are a certain number of significant risks associated with the development of cryptoassets.

Bill C-249 is basically a bill that promotes cryptocurrencies. One of its main objectives is to ensure the growth of cryptocurrencies. This is one of the fastest-growing sectors, and the market is already doing the work on its own. It is not like Alberta's oil. We do not need public money for it. The industry is self-sustaining.

The bill then talks about the need to lower barriers in a sector to which there are no barriers. This is about regulation. This is an incomplete bill that starts to unravel from the very beginning. The bill then claims we must minimize the administrative burden in a sector where there is virtually no administrative burden.

I do want us to talk about cryptocurrencies. I want us to analyze the sector and consider the state's role and the need for regulation, but this is not a great start. To me, Bill C‑249 sounds like an ad for cryptocurrencies.

This brings me back to yesterday's speech from the Conservative member for Abbotsford. I am bringing this up today because it really stood out to me. Yesterday during the Conservative filibuster, when the member for Abbotsford talked about all the criticisms he made during the prebudget recommendations, I was quite surprised to hear his comment. I was at the Standing Committee on Finance. The committee was discussing the prebudget recommendations and the member for Abbotsford did not make a single recommendation. This year, the Conservatives did not propose a single recommendation. They proposed nothing.

We brought in our witnesses—people from Davie in Quebec City, which still does not have its fair share of federal shipbuilding contracts, our farmers, our community organizations and our businesses, all of whom offered up proposals to stabilize our supply chains—and we made proposals, but the Conservatives had nothing, nothing at all.

Yesterday, the member for Abbotsford said something in connection with Bill C‑249. He said that when parties have pre-budget recommendations—which they did not, of course—they have to set priorities, practise statesmanship and start with what is most important. To me, given the current conditions, the economic recovery, coming to the end of the pandemic and having so much work to do, I am surprised that the Conservatives would use their time in the House to introduce this kind of bill.

Speaking of setting priorities, I decided it was important to get out there and talk to people dealing with the negative repercussions of cryptocurrencies. Such people exist, and I wanted to hear what they had to say. I think it is worthwhile, especially as I also think we need stricter regulations and Bill C‑249 is noticeably lacking.

Consider the Vancouver police, for example. It does not get much more hands-on than those folks. They believe that cryptocurrency ATMs are being used as conduits to move the proceeds of crime. That worries me. The lack of regulations in this area worries me.

As my colleague from Lac-Saint-Jean said earlier, the Toronto police have also indicated that cryptocurrencies in general are problematic. They are known to be a money laundering tool that can facilitate criminal transactions, such as the sale of narcotics and guns, and that is certainly what has materialized.

The member for Calgary Nose Hill was saying that although this is true, any payment method can be used for the same purpose. However, there are varying degrees of ease. Person-to-person transactions without intermediaries and without state regulation make things easier. I am very surprised that Bill C-249, without any hint of a regulatory proposal, comes from the law and order party.

The U.S. Department of Justice has just created a new director position to tackle fraud specifically involving cryptocurrencies. That is in the United States.

In its budget, which was just tabled, Quebec highlights the need to better protect Quebeckers against cyberthreats and expresses the will to combat tax evasion strategies more effectively, which reflects a willingness to do the hard work to ensure that the cryptoasset sector develops in a secure and fair environment for all. That is what the Quebec government is saying, and, in this place, we defend Quebec's interests.

For its part, the IMF, which is attuned to the issue of global monetary and financial stability stated the following:

Crypto assets and associated products and services have grown rapidly in recent years. Furthermore, interlinkages with the regulated financial system are rising. Policymakers struggle to monitor risks from this evolving sector, in which many activities are unregulated. In fact, we think these financial stability risks could soon become systemic in some countries.

Based on what the IMF experts are saying, I feel that they have placed the cart before the horse by introducing a bill that is essentially a tool to promote an industry that is already doing very well.

There is a host of risks for consumers. I like that the title of the bill refers to cryptoassets. We have stopped calling it “cryptocurrency” because it is not really currency and it does not play the same role as currency. It will therefore not replace currency.

Currency is a store of value. Its purpose is to retain value. However, cryptoassets are assets that fluctuate tremendously based on factors such as speculation. This makes the ill-informed investors—if we can call them that—who put their money into them more vulnerable.

Currency is also a unit of account. Until Quebec becomes independent and starts using the Quebec dollar, we will still use the Canadian dollar, which does the job very well. In fact, the value of cryptocurrencies is still assessed against the Canadian dollar. It is also a medium of exchange.

Cryptocurrency also functions as a medium of exchange, but it is a very decentralized medium that can, as I said earlier, facilitate criminal transactions, under-the-table transactions and many others. The fact that it is decentralized makes it all the more important to regulate it. I am worried about that, and so is the Bloc Québécois. We know that we are not the only ones who think that way.

Paul Beaudry, the deputy governor of the Bank of Canada, spoke to us about bitcoin. We know that there are a lot of different cryptoassets and cryptocurrencies, but he told us that Bitcoin was more for speculation than for payment. If we have reached the point where the Bank of Canada is worried about these issues, then perhaps we should be asking the Bank of Canada whether this bill addresses its concerns and meets its expectations. I would venture to say that the bill does not.

I now want to talk about our support for the bill. This bill is at second reading, the stage at which we vote on the principle of the bill. This bill could be improved, and my colleague spoke about that. It could be amended in committee. However, given the need for a framework, for regulations and for consultations with stakeholders, I strongly believe that we would end up having to rewrite the entire bill by making the amendments we would be comfortable with.

The bill would be rewritten so much that I do not think the amendments we would want would even be in order as part of the committee's study of this bill. We therefore think that it might not be a constructive use of parliamentarians' time to send this bill to be studied in committee. For these reasons, the Bloc Québécois will very likely not be able to support the principle of this bill.