Chrystia Freeland’s defence of Emergencies Act doesn’t hold up

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Chrystia Freeland offered a convincing depiction of the impasse in which the government found itself in mid-February to the commission looking into the invocation of the Emergencies Act.

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But she was less persuasive when making the case for the measures the Liberals introduced in a frenzy to break the deadlock created by the so-called Freedom Convoy.

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The finance minister, in testimony before the Public Order Emergency Commission, said that until the second weekend of the protest in early February, she had been almost entirely focused on the federal budget that was due that spring. But as protest turned to occupation, she said she started hearing from business leaders that the spread of dissent was becoming a cause for concern.

When the blockade at the Ambassador Bridge began on Monday, Feb. 6, that concern escalated exponentially, she said.

Department of Finance officials were asked to provide options that were not already being used. This request produced the measures that were later taken under the Emergencies Act, including giving FINTRAC (the government’s financial activities monitoring agency) the authority to track crowdfunding and payment processing platforms, and enabling cabinet to issue binding direction to banks to freeze the accounts of individuals or entities suspected of being involved in the protests.

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“We came to the conclusion that everything that could be utilized was being utilized,” Freeland said. “FINTRAC monitoring authorities were appropriate for a 20th century economy but not for a 21st century economy.”

The urgency to act was imparted during a call with White House economic adviser, Brian Deese, which Freeland later recounted to her chief of staff, Leslie Church. For months, in the run-up to the announcement of President Joe Biden’s Inflation Reduction Act, Freeland and others had been emphasizing the integrated nature of the North American auto market, in order that Canada not be penalized by U.S. incentives for electric vehicles. It was an effort that nearly rebounded.

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Freeland told Church on Feb. 10: “If this is not sorted out in the next 12 hours, all of their eastern car plants will shut down. He (Deese) said he supposed that this proved the point we made to them about how closely integrated our economies are. He did not seem to see this as a positive.”

“That was a dangerous moment for Canada,” Freeland told commission counsel, referring to the strong push by the Biden Administration to insulate its supply chains. “I could see an amber light flashing that suggested Canadian supply chains could be a vulnerability.”

The concerns over Canada’s access to the U.S. market were a viable concern at the Ambassador Bridge. Canada’s busiest border crossing accounts for a quarter of the country’s road exports and a third of its imports.

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The Americans were not happy and that was a very real threat to Canada’s economic security. “Access to the U.S. market is essential but fragile, a bit like a marriage. Your whole life is based on it but you have to take care of it every single day,” Freeland said.

By the time the finance minister chaired a call of Canada’s bank chief executives on Sunday, Feb. 13, she was transforming into Captain Canuck in order to protect the economy.

In a readout of the call, one CEO suggested that Canada’s reputation was at risk and that the military should be put in place to keep the border crossings clear. “I couldn’t agree more with those points,” Freeland is quoted as saying, though in her testimony she said she was referring to previous comments and did not endorse deploying the military.

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Another chief executive recalled how a potential investor in Canada had reneged, saying: “I won’t invest another red cent in your banana republic.”

“That was a heart-stopping quote for me,” Freeland said. “That quote made me realize I had a duty of stewardship — a very profound duty to Canadians to stand up for them. And I’m surprised I’m getting emotional but, oh my God, I really felt it. … I realized as the finance minister, as the deputy prime minister, I have to protect Canadians. I have to protect their well-being. It’s being really, really damaged. So yeah, that was a meaningful conversation for me.”

In such a feverish environment, it is hardly surprising that key decision-makers overcompensated when it came to ending the protest.

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If the danger was clear and present, it is less obvious that the federal government’s response was imperative or proper.

By the time Ottawa declared the Emergencies Act, funding for the convoy was already being choked off.

TD had frozen two bank accounts into which more than $1 million had been deposited, after getting a court order. GoFundMe, the crowdsourcing platform, had taken down the convoy’s donation page and Ontario’s Superior Court had ordered another platform, GiveSendGo, to freeze its funds (an order it defied). Most importantly, the Ambassador Bridge reopened on Monday, Feb. 14, before Ottawa proclaimed a national emergency.

Freeland was asked by commission counsel, Shantona Chaudhury, if the financial measures in the Emergencies Act were still necessary.

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Freeland said it was clear from her call with the bank chief executives that the measures in place were not enough. She said one CEO talked about identifying a suspect account but by the time a court order was obtained to freeze it, the money had already disappeared — an example of the financial system moving faster than the legal system.

She said she felt that asking the banks to take responsibility was unfair. “They said it was not fair or appropriate and I agreed with that,” she said.

Yet the amount seized after act was invoked was modest — $8 million from 200 bank accounts — and the previously sacrosanct right of citizens to have access to their funds — except in the rare circumstances where a court order has been issued or the Canada Revenue Agency has asked for a freeze — was violated.

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The FINTRAC reforms were ineffective, the result of a lag between the authorities being put in place and them becoming actionable, Freeland said. Meanwhile, the provision requiring insurance companies to cease providing auto insurance coverage to Freedom Convoy protesters was never used. Freeland said that was a good thing and that the insurance clause acted as a “virtual tow-truck” that created an incentive to leave.

Freeland was not wrong in her assessment of the links between economic security and national security.

The fears she expressed — that the situation might spiral out of control and imperil the auto industry — were real.

But the response sprang from a counterproductive “I’m from the government and I’m here to help” instinct.

“People felt their government was not protecting them and they were right — we weren’t. It was an understandable and reasonable feeling. ‘If my government is not taking care of me, maybe I have to take care of myself.’ That would have been terrible. That’s why we have a government,” she said.

More accurately, that’s why we have police services and all the evidence that has been submitted to the commission suggests that they were ready, finally, to do their job — even before the federal government’s clumsy, injudicious intervention.

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