Deputy finance minister says protests come at ‘tricky time’ for Canadian economy

OTTAWA — Canada’s economy was already facing uncertainty when protests against COVID-19 restrictions blocked borders and occupied downtown Ottawa last winter, the senior ministry official said Thursday. finances.

OTTAWA — Canada’s economy was already facing uncertainty when protests against COVID-19 restrictions blocked borders and occupied downtown Ottawa last winter, the senior ministry official said Thursday. finances.

Michael Sabia, the deputy finance minister, is one of three senior departmental officials to testify at the public inquiry into whether the Liberal government was justified in triggering the Emergencies Act on February 14 to end the protests.

He said the country’s economy was at a “very, very fragile time” when the “Freedom Convoy” protests began in late January, due to the lingering effects of the ongoing COVID-19 pandemic and the changing dynamics of world trade.

Sabia told the Emergency Public Order Commission that the protests, which closed several border crossings, were damaging Canada’s reputation as a reliable trading partner at a time when protectionist sentiment was growing in the United States.

He also said the Department of Finance fears there will be lasting consequences for the economy, particularly on the Canadian auto industry, if the protests last too long.

“Duration is everything here, in terms of disruption to the Canadian economy,” Sabia said.

He said it was a “very delicate time” for Canada, as the federal government prepared the 2022 budget and anticipated the consequences of Russia’s impending invasion of Ukraine.

Ministry officials prepared a memo for Finance Minister Chrystia Freeland on February 9, detailing how legislative levers could be pulled to help end the protesters, including a proposal to freeze bank accounts.

When invoking the Emergency Measures Act, the government was able to regulate or prohibit the “use of assets” to finance or support the blockade, allowing financial service providers to immediately freeze personal accounts or business without incurring liability.

Sabia said this was intended to deter people from coming to protests and to encourage those who were already participating to leave.

The settlement included an order requiring banks, credit unions, crowdfunding platforms and other financial service providers to register with FINTRAC and report suspicious transactions to the financial watchdog.

They also required institutions to review their relationships with anyone involved in the blockades and report their assets to the RCMP or the Canadian Security Intelligence Service.

Around 280 accounts have been frozen as a result, with around $8 million in total assets.

The Department of Finance did not produce an assessment of the economic impacts of the lockdowns, but Assistant Deputy Minister Rhys Mendes said there was no direct long-term impact on the Canadian economy.

“It’s fair to say the impact has been limited,” he said, adding that this was only the case because the protests were neither widespread nor long-lasting.

Prime Minister Justin Trudeau’s national security adviser, Jody Thomas, is also due to testify on Thursday.

The commission previously learned that hours after the historic decision to invoke the Emergencies Act on Feb. 14, Thomas contacted the RCMP for a threat assessment of the protests in Ottawa and at several border crossings.

His actions, detailed in documents previously released by the inquiry, provide insight into the advice Trudeau and his cabinet colleagues were receiving when they decided to use the Emergencies Act.

The inquest heard that Thomas did not go through official channels and told the RCMP that the protests posed a threat to democracy and the rule of law.

When Trudeau invoked the law, he told Canadians his extraordinary but temporary powers were needed to quell protests against pandemic restrictions and the Liberal government.

This report from The Canadian Press was first published on November 17, 2022.

David Fraser and Marie-Danielle Smith, The Canadian Press

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