EVIDENCE

Standing Committee on Finance NUMBER 029 1st SESSION 44th PARLIAMENT Monday, March 14, 2022 Le lundi 14 mars 2022 Standing Committee on Finance CANADA [Recorded by Electronic Apparatus] EVIDENCE March 14, 2022 Committee NUMBER 029 NUMBER 029 NUMÉRO 029 29 14 03 2022 2022/03/14 14:30:00 House Of Commons Comité permanent des finances Standing Committee on Finance FINA Chair Mr. Peter Fonseca 1 44

(1430) [ English ]

The Chair (Mr. Peter Fonseca (Mississauga East—Cooksville, Lib.)) :

I call this meeting to order. Welcome to meeting number 29 of the House of Commons Standing Committee on Finance. Pursuant to the motion adopted in committee on Thursday, February 17, the committee is meeting to study the invocation of the Emergencies Act and related measures. Today's meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website.

Just so that you're aware, the webcast will always show the person speaking, rather than the entirety of the committee. Today's meeting is also taking place in the webinar format. Webinars are for public committee meetings and are available only to members, their staff and witnesses. Members enter immediately as active participants. All functionalities for active participants remain the same. Staff will be non-active participants and can therefore view the meeting only in gallery view.

I'd like to take this opportunity to remind all participants in this meeting that screenshots or taking photos of your screen is not permitted. Given the ongoing pandemic situation, and in light of the recommendations from the health authorities as well as the directive of the Board of Internal Economy on October 19, 2021, to remain healthy and safe all those attending the meeting in person are to maintain two-metre physical distancing and must wear a non-medical mask when circulating in the room. It's highly recommended that the mask be worn at all times, including when seated.

They also must maintain proper hand hygiene by using the provided hand sanitizer at the room entrance. As the chair, I'll be enforcing these measures for the duration of the meeting, and I thank members in advance for their co-operation. To ensure an orderly meeting, I'd like to outline a few rules to follow. Members and witnesses may speak in the official language of their choice.

Interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of either the floor, English or French. If

interpretation is lost, please inform me immediately, and we will ensure

interpretation is properly restored before resuming the proceedings. The “raise hand” feature at the bottom of the screen can be used at any time if you wish to speak or to alert the chair. For members participating in person, proceed as you usually would when the whole committee is meeting in person in the committee room. Keep in mind the Board of Internal Economy's guidelines for mask use and health protocols. Before speaking, please wait until I recognize you by name. If you're on the video conference, please click on the microphone icon to unmute yourself.

For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. When speaking, please speak slowly and clearly. When you're not speaking, your mike should be on mute. I remind you that all comments by members and witnesses should be addressed through the chair. With regard to a speaking list, the committee clerk and I will do the best we can to maintain a consolidated order of speaking for all members, whether they are participating virtually or in person. This meeting is scheduled for a longer duration.

In consideration of the fact that our witnesses may not get an opportunity to leave their virtual set-up, I will suspend the meeting for a five-minute health break at around the halfway duration mark. I'd now like to welcome our witnesses.

We have, from the Assembly of First Nations, National Chief RoseAnne Archibald; from Ether Capital, Brian Mosoff, chief executive officer; from Invest Ottawa, Michael Tremblay, president and chief executive officer; from Newton Crypto Ltd., Dustin Walper; from Wealthsimple, Blair Wiley, chief legal officer; and, from the Chambre de commerce de Gatineau, Stéphane Bisson, president. At this time, witnesses will have an opportunity to make a statement or remarks for up to five minutes before we get into questions. We will start with the Assembly of First Nations.

RoseAnne Archibald, the floor is yours for up to five minutes.

(1435) National Chief RoseAnne Archibald (National Chief, Assembly of First Nations) :

Thank you very much, Mr. Chair. I'm very happy to be with you here today. First of all, as I explained, I'm on the territory of the Tsleil-Waututh, Squamish and Musqueam nations.

Meegwetch to the Standing Committee on Finance for inviting me to appear. I do want to talk about the far wider impact and the financial implications of the Emergencies Act, but I will also start with some larger-picture issues. The root cause of what we're analyzing today needs to be put on the record. To put it plainly, there are serious doubts that the events of February 22 would have escalated if these protesters were first nations people.

The convoy was provided with much leniency from the start because the non-indigenous participants were not initially considered or deemed a threat, and were still not until it was too late and, thus, the Emergencies Act was invoked. I do want to state that this is in stark contrast with how first nations people are treated when they are involved in civil actions, and there is a need for dignity and respect to be afforded to first nations when they are being vocal in their disagreement with government on legislation and policies.

First nations people are often viewed through a different lens and met with aggression by law enforcement almost immediately, not three weeks later. In the long term, first nations defenders of land and water could potentially be severely impacted by the invocation of the Emergencies Act, and this is very concerning. First nations people have been attempting to bring attention to this unequal treatment for decades. Canada has an overt, covert and systemic racism problem. I have said many times that the fair and just society that is proclaimed is simply not true when it comes to first nations.

We only have to look at Kanesatake, Oka, Ipperwash Park, Tyendinaga and Wet'suwet'en to see the violence that is inflicted upon first nations men, women and children by Canadian police, paramilitary and military forces. Having said that, I do see short- and long-term financial implications for first nations and their citizens. For example, the financing of the “freedom convoy” protests and blockades highlighted the vulnerability of Canada to be influenced by national and international white supremacists and far right extremist groups. I will focus my comments on the subject matter of this committee.

When it comes to broadening the scope of Canada's anti-terrorist financing laws, it makes sense to apply that to identified extremists and white supremacist hate groups. However, first nations do not fall in this category. I want to be clear that first nations are not terrorists, nor should they be branded as such when they are involved in civil actions that protect and uphold their constitutionally protected treaty and inherent rights in this country. Many of our disputes with settler governments involve land and water rights. We have a sacred responsibility and connection to our lands and waters.

As national chief, when I have travelled all across Turtle Island, I have always acknowledged that I'm a guest on various nations' territories, and I wish to remind this committee and all Canadians that you are guests of first nations on lands and waters given to us by the Creator. What's equally important is that we made sacred promises to live in peace. Therefore, any reference to first nations' finances being included in the scope of Canada's anti-terrorist financing laws is an affront to our sacred relationship with the Crown.

I am concerned about the federal government's increased ability to interfere with the business of crowdfunding websites. First nations have used these crowdfunding websites, for example, to raise legal defence funds. This will be a big step backward for Canada as it will take us back to 1927 when the Indian Act made it illegal for first nations people and communities to hire lawyers or bring about land claims against the government. Further, in 1951 Canada amended the Indian Act to make it illegal to obtain funds or legal counsel to advance aboriginal title cases.

We need to move on the healing path forward and not go back to oppressive, suppressive legislation that negatively impacts first nations. I'm equally troubled by the ability of Canadian financial institutions to temporarily and selectively cease to provide financial services to specific clients. Many of you may be aware of the case of the first nations 12-year-old girl and her grandfather who were arrested in Vancouver for trying to open a bank account at the Bank of Montreal. This is overt, covert and systemic racism that first nations already face within the banking system.

(1440) When you add on top of that the powers provided to systemically racist law enforcement agencies to supply names to financial institutions in order to freeze accounts, you are creating a compounded, unjust situation for first nations. It's incumbent upon Canada to not only fix its systemic racism problem, but to ensure that the system has checks and balances when it comes to freezing the assets of first nations and/or their citizens.

Moreover, broadly increasing powers given to systemically racist Canadian financial institutions, particularly sharing personal information, has long-term implications for first nations. Clear guidelines and safeguards need to be put in place to protect first nation citizens from unfair targeting by banks, as well as unauthorized sharing of their information. Banks have a great deal of power over the lives of all people, including first nations people. Some individual impacts could be downgraded credit ratings and an inability to take out a loan, a mortgage, a credit card or even to rent a home—

The Chair :

Thank you, National Chief Archibald. We've gone over time a bit, but there will be a lot of opportunity to make your comments through the question and answer time. We are moving to Ether Capital and Brian Mosoff for up to five minutes, please.

Mr. Brian Mosoff (Chief Executive Officer, Ether Capital) :

Thank you, Mr. Chair and members of the committee, for inviting me here to speak. I am the chief executive officer of Ether Capital, one of the leading public companies in the cryptocurrency sector. We do not face retail directly, meaning crypto assets cannot be purchased through a platform that we hold. We are an access point in the capital markets for exposure to the Ethereum ecosystem and a lot of the developments that are happening in Web3. I've been a member of the cryptocurrency community for about a decade now, so I wear two hats.

I wear the hat of what I would like to believe is a good actor in the space, someone who wants to work with regulators and the government to figure out what appropriate access points are, and to be a leading access point in the capital markets. I also wear the hat of someone who's been in the space for many years, who has a lot of knowledge and experience and who understands the lexicon and complexities of this new industry. Broadly, I'm excited to be here today to help paint a picture of an industry that's largely been marginalized and pushed to the side for the 13 years or so since its formation.

There's an opportunity for Canada to lean in to this industry. It's a new technology. It's an asset class that has grown from essentially nothing into multiple trillions of dollars. We're seeing Canadians who want exposure to this asset class and directional exposure to the assets. They want to do it in appropriate ways, and there's an opportunity to provide that access.

I think most of the conversations that have happened to date have largely been at the regulatory level, figuring out what appropriate registrations would be like for platforms, how that would work, which assets are appropriate and which activities should be accessible to Canadians who want to be good actors. Recent events have kicked off a new conversation. This is the opportunity to recognize that this asset class is here to stay, and it's likely going to be orders of magnitude bigger within the next decade.

Ethereum was largely incubated and invented in Canada, and the opportunity here is to lean into a technology, not push it aside and ensure that we have a seat at the table at the next iteration of the web and finance. It's something I care about deeply as a Canadian, as a technologist and as someone who wants to see Canada win here. There is an opportunity for us to secure a seat at the table.

In order to do that, we need at a national level to coordinate better communication across various agencies, a plan of how we're going to create appropriate access points and what our participation is going to be like in the space. I will also say that there are going to be good and bad actors in the space. In a lot of the focus, the light is shone on the bad actors, the people using it to evade taxes or launder money. However, most of the activity that's taking place in the space is by good actors, the people who want to participate in a growing asset class. There are many new verticals.

Some of you may have heard of centralized financing and NFTs. Perhaps none of this stuff makes sense to you, but I'm here to offer my support to anyone on this panel and to anyone in government who wants help navigating this new world. I think we're all here today to understand how we create appropriate frameworks going forward, to see Canada win in this new sector and look at technologies that can help monitor inappropriate behaviours in these realms.

There are new tools that are maybe not familiar to the traditional banking system—I'm happy to chat about them further—to monitor activities, wallet activity, wallet interactions and behaviour analytics to ensure that good actors are safe and using things in a compliant way, and that bad actors are able to be brought to justice. Thank you. I'm very excited to have this conversation for the next few hours.

(1445) The Chair :

Thank you, Mr. Mosoff. Now we're going to hear from Invest Ottawa. We have Michael Tremblay for up to five minutes.

Mr. Michael Tremblay (President and Chief Executive Officer, Invest Ottawa) :

Thank you. Good afternoon, Chair Fonseca and standing committee members. I'll keep to the script here, recognizing that we have just five minutes for these sessions. I am pleased to join you here today, and I do want to acknowledge that I am on the unceded territory of the Algonquin people. As noted, I'm Mike Tremblay. I have the privilege of acting as president, CEO and board member of Invest Ottawa. For those who are not aware, Invest Ottawa is the lead economic development agency for knowledge-based industries in Canada's capital, facilitating economic growth and job creation in our nation's capital.

We're guided by a vision to help realize Ottawa's full potential as a globally recognized, innovative, inclusive and future-ready city delivering venture development, global expansion and talent programs and services that catalyze the growth and success of entrepreneurs and firms in the region and beyond. This includes small business training mentorship, acceleration and scale-up services for tech firms, foreign business and investment attraction, local business retention and marketing Ottawa's diversified economy and the high quality of life here as we try to attract businesses and investment.

Invest Ottawa is also the founder of Area X.O, which includes research, development and testing to accelerate the application of next-gen mobility tech. You'll see that in things like the autonomous vehicles and drones that we test here in the region. In short, we foster and grow businesses and business interests in our region. As a not-for-profit, we receive funding from all three levels of government, in addition to corporate sponsorships and investments; however, we are not a member of any level of government. I just want to clarify the context of Invest Ottawa.

For those who are here today, it will come as no surprise that Ottawa businesses have been deeply impacted by COVID-19, just like every other business across the country and around the globe. They've endured numerous shutdowns as a result of the ever-changing nature of the pandemic and, throughout it, have shown true resilience in the face of significant and ongoing hardship and challenge. As we all know, at the beginning of this year, non-essential businesses in Ottawa and across the province had to close their doors once again due to the surge in omicron-related case numbers, but there was a glimmer of hope.

On Monday, January 31, restaurants, gyms, theatres, museums and cinemas were all set to reopen at 50% capacity, providing a much-needed opportunity to generate income and to welcome Ottawa residents back to their businesses. However, that wasn't able to happen. On January 28, the truck convoy arrived in Ottawa, which effectively shut down the Ottawa downtown core three days before businesses were set to open their doors once again.

There were wide-ranging consequences of this demonstration, and many lessons to be learned, no doubt, but, as Invest Ottawa, the economic development agency for the capital, our focus remains forward looking and proactive and really having the single goal of helping our businesses, those that make up the very economic fabric of our city, to thrive once again. That's what we do. We're steadfastly committed to this goal, and we are working with our partners, collaborators and businesses to ensure they have the resources they need to once again demonstrate their resilience in the face of unprecedented challenges.

Thank you once again, Chair and committee members, for your time today. I'm happy to answer your questions as this committee meeting ensues. Thank you.

The Chair :

Thank you, Mr. Tremblay. Now we're going to be hearing from Newton Crypto Ltd. and Dustin Walper for up to five minutes.

Mr. Dustin Walper (Chief Executive Officer, Newton Crypto Ltd) :

Thank you very much. Good afternoon, everybody. My name is Dustin Walper, and I'm the founder and CEO of Newton.co. I will give you a bit of background about us to start. We're one of the leading Canadian cryptocurrency trading platforms. We make it easy for Canadians to buy and sell over 60 different cryptocurrencies, including Ethereum, as mentioned, Bitcoin, Solana, Cardano and many others. We're a great example of a high-growth, Canadian-run business.

Since we founded Newton in 2018, we've grown to have over 450,000 customers across Canada, with over 100 highly skilled Canadian employees across the country, making, on average, $100,000 in salary. This is everywhere from Halifax to Montreal, Toronto, Winnipeg, Calgary and Victoria. It's truly from coast to coast. Recently, we raised a $25 million Canadian series B to further invest in our growth. That was raised from a combination of Canadian and American investors.

Furthermore, we have been registered as a money services business with FINTRAC since 2019, and we're in the advanced stages of registering as a restricted dealer with the Ontario Securities Commission. The extent of our regulatory obligations is quite considerable.

They include maintaining a robust anti-money laundering program, an anti-terrorist financing program—for which we often use sophisticated blockchain analysis tools as was mentioned previously—a fraud prevention team, multiple levels of insurance to protect customers from loss of funds, a robust cybersecurity program, including external penetration testing, and a lot more. Far from being the Wild West, as some may perceive it, cryptocurrency trading platforms in Canada are becoming highly regulated businesses. They are more so than in almost every state of the United States.

I'm telling you all of this because I want to clear up misconceptions about the cryptocurrency industry. We represent, I would say, the cutting edge of fintech, or financial technology, and we're contributing meaningfully to the Canadian economy. With some forward-thinking policy, we would be really well positioned to leverage our reputation for the stability of our financial services sector in order to participate in the boom in fintech growth. I want to talk a bit about the Emergencies Act and touch briefly on that. Ours is a retail platform, so we deal with customers across the country.

We were asked by the RCMP to prevent funds from flowing from our platform to a list of Bitcoin addresses, and we complied with that request. Crypto trading platforms like Newton, however, are not able to freeze or hold funds that are being held in private Bitcoin wallets off our platform. In fact, a key characteristic of Bitcoin is that it allows users to transact peer-to-peer without an intermediary, which makes it very much like the equivalent of digital cash.

It's my fundamental belief—and we could maybe go in to this later—that property rights protected by due process of law are essential to the success of a modern democratic country, and table stakes for attracting investment like the investment we were able to raise from outside of the country. That reputation is very important to us and other financial services and fintech companies. That reputation took a long time to build—many decades, through the last financial crisis—and it can be undone if we're not careful.

The ability to hold and spend money to buy groceries, pay rent and fill up your tank with gas is a basic precondition to one's ability to operate freely in society, and our system of law exists to protect individuals from the overwhelming power of the state by imposing the burden of due process. In my personal view, we must do everything we can to prevent its erosion. It is really for this reason that peer-to-peer financial technologies play a really important role in the checks and balances that make our country work. Cash or Bitcoin are examples of that.

While they can be and frequently are seized as part of a court order, a criminal investigation, a civil suit or what have you, they cannot be arbitrarily frozen without due process once they are in the control of an individual. I would urge the committee to think strongly about the kind of country we want Canada to be. In my view, it's a country that strongly values both property rights and due process, regardless of the inconvenience they may cause to legitimate investigation.

It's a country that embraces fintech innovation and pro-growth policies, and one that's fair and even-handed, even to those whom we might not ultimately agree with. Thank you.

(1450) The Chair :

Thank you, Mr. Walper. Now we will hear from Wealthsimple, with Blair Wiley for up to five minutes.

Mr. Blair Wiley (Chief Legal Officer, Wealthsimple) :

Thank you to the chair and thank you to the committee for inviting us to attend today. I'll start off with a few introductory remarks about Wealthsimple. Wealthsimple is a financial services company committed to helping Canadians achieve financial freedom no matter who they are or how much they have. We do that by building powerful financial tools for people to grow and manage their money. Our products are low-cost, intuitive, and available online, which we believe is essential to help Canadians adopt good financial habits. We provide our services to more than 2.5 million Canadians.

We employ more than a thousand people in nine provinces across the country, despite being founded in only 2014, when we began as an automated investment manager. Our services have since evolved to meet the multiple financial needs of our clients. We still offer professionally managed portfolios and have added self-directed trading, saving and spending, tax filing, and, as of 2020, a cryptocurrency platform. In August of 2020, Wealthsimple became the first crypto platform to register with Canadian securities administrators.

This required us to demonstrate high standards of disclosure, financial resilience and investor protection. Crypto is a legitimate and compelling emerging asset class, worth over $2 trillion and owned by millions of Canadians. We believe those Canadians deserve the same protections they would expect regarding any other investment. Our clients' behaviour has substantiated that view. Contrary to the popular narrative regarding crypto investors, Wealthsimple crypto clients tend to invest cautiously and for the long term. Clients tend to invest small amounts.

Almost half of clients who have bought crypto through Wealthsimple have never sold. One vital piece of our crypto platform is a program of robust anti-money laundering, or AML, to guard against financial crime and the financing of terrorism. As well as being registered with FINTRAC since our launch, we have sophisticated tools, experienced AML professionals and robust processes for blockchain transaction monitoring. With regard to the Ottawa protest, our legal and AML teams became aware in early February of media reports about fundraising efforts, including fundraising efforts using Bitcoin.

On February 10 the Ontario Superior Court issued an order under the Criminal Code freezing property relating to a fundraiser for the protest on the grounds that it was related to alleged criminal activity. Later, following the issuance of the emergency order on February 15, the RCMP identified specific Bitcoin wallet addresses associated with alleged criminal activity. On February 18 we were notified of a second court order obtained by private parties freezing certain assets, including Bitcoin, related to fundraising efforts.

In each case, our in-house AML expertise and blockchain intelligence tools enabled us to rapidly respond with appropriate controls. In our view, recent events provide compelling evidence that far from the Wild West, as Mr. Walper also alluded to, that is often imagined, crypto is an important and promising technology that allows for a degree of transparency and consumer protection that is at least comparable to traditional finance. In fact, the transparent nature of a public blockchain has several advantages over conventional banking in the inherent ability to track and audit flows and transactions.

For our part, regulated crypto platforms like Wealthsimple are responsible actors committed to compliance with Canadian law. We are aware that some foreign platforms appear less committed to compliance with Canadian law despite serving millions of Canadian customers. We believe this strengthens the case for the federal government to start engaging with the domestic crypto sector to develop a clear and positive regulatory framework for crypto in Canada. It is strategically important to Canadian innovation, competitiveness and security that we have a strong domestic crypto industry.

Wealthsimple is ready to play our

part in helping to build it. Thank you for your time. I look forward to your questions.

(1455) The Chair :

Thank you, Mr. Wiley. Now we're moving to the Chambre de commerce de Gatineau. We will hear from Stéphane Bisson for up to five minutes. [ Translation ] Mr. Bisson is president of the Gatineau Chamber of Commerce. Go ahead, Mr. Bisson.

(1500) Mr. Stéphane Bisson (President, Gatineau Chamber of Commerce) :

Good afternoon, everyone. My name is Stéphane Bisson, and I am president of the Gatineau Chamber of Commerce. Thank you for inviting me to appear. I would first like to specify, for those who don't know, that Gatineau is right on the other side of the river; it is the national capital's forgotten village. During the protests in support of the freedom convoy, downtown Gatineau was literally taken hostage by sympathizers. You will remember that Ottawa's public safety officials had blocked the bridges.

Only two bridges ultimately remained open to traffic: the Champlain Bridge, located westward, and the interprovincial bridge, where significant traffic jams occurred. So sympathizers arriving from the Quebec side to see the convoy would park in downtown Gatineau. They simply took the downtown area hostage. When the convoy arrived downtown, businesses had just reopened, including restaurants and anything related to tourism. Hundreds and thousands of individuals started waving flags, drinking and urinating in public. That combination did not make restaurants very attractive to people.

As a result, a great many reservations were cancelled. All merchants in downtown Gatineau suffered incredible losses, in addition to serious harm, as people came to their businesses refusing to follow health measures. That is one of the problems that arose. I also want to highlight the absence of public servants in downtown Gatineau. Some 50,000 of them work in office buildings. So their absence represents significant losses for businesses in downtown Gatineau. I wanted to remind you of that in the context of the committee's study. Thank you.

The Chair :

Thank you, Mr. Bisson. [ English ] Members and witnesses, we're going to our first round of questions now. In this first round, each party will have up to six minutes to ask our witnesses questions. We're starting with the Conservatives and MP Lawrence for six minutes.

Mr. Philip Lawrence (Northumberland—Peterborough South, CPC) :

Thank you, Mr. Chair. First of all, thank you to all of the witnesses.

Meegwetch . I really appreciate your appearance here today. I'm going to focus my questions on cryptocurrency and its impact on the blockade, so I'm looking forward to, hopefully, setting straight some misinformation that's out there. To my understanding, there was a bit of a narrative out there in the press and otherwise that said cryptocurrency was a completely unregulated industry and that it was being used by nefarious actors to fund the illegal activities that were happening at the blockades in Ottawa and elsewhere.

First, you've already talked about this a bit in your testimony, but just so that we can have absolute clarity, Mr. Walper and Mr. Wiley, can you confirm that you do have reporting obligations to FINTRAC both before and after the illegal blockades and currently?

Mr. Dustin Walper :

I can quickly address that first and he can follow. As I mentioned, we've been registered with FINTRAC as an MSB since 2019. That includes a wide variety of different reporting obligations, most recently including large-value crypto transaction reporting. On any transaction valued at over $10,000, we have to report information. There is also something called the “travel rule”, which is to attach information to crypto transfers moving from platform to platform.

We employ sophisticated blockchain analysis tools to look at where funds are going and routinely will block funds that we perceive as going to potential high-risk destinations. There actually is quite a wide variety of obligations already in place that predate this event.

Mr. Blair Wiley :

I would echo that entirely. It's a very sophisticated regime that is modelled after the rules for money service businesses, which have been regulated for many years, with specific regard to the nature of transactions on the blockchain. Not only can we block money or Bitcoin that is leaving our platform, but we can also block transfers to our platform, if someone, for instance, wants to receive Bitcoin into a Wealthsimple account and then exchange that for cash to use in the course of business.

Regulated platforms, such as Newton and Wealthsimple, play a very important role as a bridge between the cash system, the financial fiat currency system, and crypto technology. Our ability to regulate and follow regulation related to transactions that occur is an important feature of Canadian AML law.

(1505) Mr. Philip Lawrence :

Thank you. I appreciate those answers. For how many individuals was information flagged and provided by the RCMP or under other regulations, with respect to potential freezing? I'm just talking about the Emergencies [ Technical difficulty—Editor ].

The Chair :

Mr. Clerk, I believe MP Lawrence froze on my screen. Do you have the same?

The Clerk of the Committee (Mr. Alexandre Roger) :

Yes, his connection is frozen. We'll try to get in touch with him.

The Chair :

We're at three minutes into the Conservatives' question time. Would another Conservative member like to take up some of the questions? Mr. Albas.

Mr. Dan Albas (Central Okanagan—Similkameen—Nicola, CPC) :

I would, if that's all right. I'll give my time back to MP Lawrence a little bit later on.

The Chair :

Sure.

Mr. Dan Albas :

National Chief Archibald, the end of your statement was cut off a little bit. Do you want to finish your statement, utilizing my time?

National Chief RoseAnne Archibald :

Thank you very much. I would certainly appreciate that. I believe I left off talking about some of the implications of people's credit being downgraded when dealing with banks, so I'm going to finish off two more pieces. The invocation of the Emergencies Act has long-term negative impacts for first nations. The history of Canada involving the suppression, oppression and repression of first nations people and their rights is rarely told. Canada has begrudgingly changed through human rights rulings and lengthy and costly court cases.

Canada tries to portray itself as a nice, friendly place that treats its citizens well, where first nations appear to be walking toward freedom and justice; however, Canada continues to hide its oppression and its systemic genocide of first nations people. The final comment I was going to make was that the recent invocation of the Emergencies Act is taking first nations backwards. It is the opposite of what we're calling the “healing path forward”. I do appreciate your giving me extra time, and I look forward to additional questions on my comments.

Meegwetch . Kinanaskamitanow .

Mr. Dan Albas :

Mr. Chair, do I have any time for a question?

The Chair :

You do, MP Albas. You have a minute and a half.

Mr. Dan Albas :

National Chief, you raised concerns around the reaction of the government. Do you think the emergency measures were justified at the time they were invoked? Also, what do you believe should be the threshold that would justify an invocation of such draconian legislation?

National Chief RoseAnne Archibald :

I want to back it up to the length of time the government took to respond to this protest. If these were indigenous protesters in downtown Ottawa beeping their horns and blocking streets, they would have summarily been arrested and removed. Failure to do that led to the Emergencies Act being invoked. It was a real failure on the part of police services and governments to respond in the same way they would to any protesters, which they didn't do in this case. I hope that answers your question, sir.

Mr. Dan Albas :

Thank you.

The Chair :

Thank you, MP Albas. Now we're moving to the Liberals for six minutes. MP Baker, you have the floor.

Mr. Yvan Baker (Etobicoke Centre, Lib.) :

Thank you very much. [ Translation ] My questions are for the Invest Ottawa representative. Mr. Tremblay, thank you for being here today. Do you think the invocation of the Emergencies Act was justified?

(1510) [ English ]

Mr. Michael Tremblay :

As a company, our focus is on economic development and growth. I don't feel that I'm equipped to pass judgment on the usefulness of the Emergencies Act. What I can tell you is that we have invested so much time with companies to help them get through the pandemic in the last two years that three weeks was a very long time for these companies, and we were extremely grateful that it was brought to a close.

[ Translation ]

Mr. Yvan Baker :

Thank you very much. According to estimates reported by CBC News, the blockades in downtown Ottawa caused between $44 million and $200 million in lost sales and wages. It is easy to be shocked by such a large figure, but it is often difficult to get a more concrete understanding of how people are impacted. Can you tell us what the impacts have been on small businesses and their employees?

[ English ]

Mr. Michael Tremblay :

If you were any of the businesses at the Rideau Centre—just referring to the article—the Rideau Centre was completely closed and 180 businesses were unable to operate, which obviously has a dire effect on their bottom line.

To perhaps add to the question a bit here, from our experiences in delivering Digital Main Street services across the Ottawa area, many of the businesses—I'm talking about two-thirds of the businesses that we did work with on Digital Main Street services during the pandemic—were self-identified as leaders, founders and operators who would consider themselves to be part of marginalized communities, so on top of everything else, they had to deal with the dire effects financially of an extra three weeks, which I think is completely unacceptable. I think the CBC

article does a very good job of providing a variety of views on what those costs would be. I can tell you that from my vantage point they were very significant to this particular community in the downtown core of Ottawa.

Mr. Yvan Baker :

Thank you very much. My question and your response speak a bit to the short-term impacts. I have a business background, so I have a hypothesis as to the answer to this question, but I'm going to let you answer it. I hypothesize that there are long-term impacts, and I'm wondering if you could speak to what the long-term impacts of the convoy will be on businesses in Ottawa.

Mr. Michael Tremblay :

It's hard to separate just the period of the convoy from the rest of the pandemic. What it does is add an extra three weeks of torment to companies that have already done everything possible to maintain a stable environment, as stable as they could, and then they had to restart again. A simple example would be if you're a restaurant and you're planning for the opening. You've brought in all kinds of foodstuffs to be able to prepare for a really important opening, which includes Valentine's Day. You're unable to actually take advantage of that market opportunity, and it sets you way back.

You have to carry the costs. You have to throw out the food. You really are in a tough place. On top of everything else, you have the incremental cost of bringing in inventory—in this example, food—that is a complete and utter waste. For the long-term effects, I guess we will see what they look like, but it certainly added an enormous burden to these companies that were already in trouble.

Mr. Yvan Baker :

Yes, and one has to believe, thinking back to my business background, that you'd have companies that either had to shut down or reduce revenue during that period in any case—significantly reduce if not completely shut down, with no revenue—and I suspect that a lot of these companies have fixed overhead, right? They have leasing obligations. They may have salaries they are paying, etc. They have to pay for that somehow and stay in business for the future.

Presumably, they would have taken on debt and those sorts of things, which at the very least inhibits their ability to grow or finance their operations in the future. Okay. I think I have about a minute left. The federal government has announced that it's offering $10,000 to Ottawa businesses impacted by the convoy. This program is going to be launched on Tuesday. My understanding is that Invest Ottawa is handling the distribution of this funding, along with the support that has been offered by the provincial government.

Can you tell us how this will support businesses that have been through these incredible difficulties you've just described, and how you'll make sure the money flows to businesses promptly?

(1515) Mr. Michael Tremblay :

That's a great question. It's $20 million from the Canadian government and $10 million from the provincial government, so any company that went through the duress of those three weeks and was clearly impacted by it has access to up to $15,000. Tomorrow, they will able to apply—they will go through an attestation process in order to apply for it—and be able to take advantage of it. There are a few areas that this funding is destined to cover. One is if you had to invest in providing some kind of security for your facility to protect it from damage.

Another is the cost of inventory that is essentially perishable and gone to waste. The third is those costs that you would have as a business during that period that are also an ongoing waste in that you were unable to do anything during that period. We will be executing the program between tomorrow and the end of April to receive requests, and the whole thing should be wrapped up some time late in May, perhaps early in June. We will be able to execute it pretty much immediately.

The Chair :

Thank you. Thank you, MP Baker. Now we will move to the Bloc and MP Ste-Marie for six minutes.

[ Translation ]

Mr. Gabriel Ste-Marie (Joliette, BQ) :

Thank you, Mr. Chair. I want to greet all the witnesses and thank them for their presentations. We really appreciate it. My questions will be for Mr. Bisson, from the Gatineau Chamber of Commerce. Mr. Bisson, thank you for joining us. I would say that I was a bit shocked by your presentation. We were essentially seeing trucks in front of Parliament blocking downtown Ottawa. However, when we would walk over from Quebec, we would also see blockades in Gatineau, especially in the Hull sector. You told us things were blocked up on your side. Is that right?

Mr. Stéphane Bisson :

Thank you for the question. That was indeed the case. We suffered collateral damage. I do understand that Ottawa was the focal point and that the situation was extreme there, but downtown Gatineau was literally stormed. I will give you an example. Mr. Tremblay talked earlier about Valentine's Day. People drove with their partner to go to a restaurant for a romantic dinner on February 14, but they could not get parking. All they saw on the road were protesters. Protesters were seen throughout the city, driving their big trucks and displaying their flags.

Although it was coming from downtown Ottawa, the sound of horns was hard on the ears outside downtown Gatineau restaurants, as we shouldn't forget that a river separates Ottawa and Gatineau. So it was really problematic.

Mr. Gabriel Ste-Marie :

Members of the Gatineau Chamber of Commerce, especially restaurant owners, bore the brunt of the siege in front of Parliament. They were unable to do business as they could have done had there been no siege. Is that right?

Mr. Stéphane Bisson :

That's right. Everyone was a bit excited in preparation for businesses to reopen. COVID‑19 had been with us for nearly two years. There was a first major loosening of restrictions, and businesses were expected to reopen. Just like children before a school break, everyone was somewhat excited, but then the situation got out of control.

Mr. Gabriel Ste-Marie :

That's a really unfortunate situation. Mr. Tremblay talked about the loss of goods. Have your members experienced the same kind of a situation?

Mr. Stéphane Bisson :

That is what I've been told by restaurant owners I have talked to. People have started to return to work in offices, but many people decided to continue working from home. That creates all kinds of constraints in terms of reorganization, especially for businesses in the downtown area.

Mr. Gabriel Ste-Marie :

The government has announced compensation for businesses and restaurants in downtown Ottawa. Does that also apply to your members?

Mr. Stéphane Bisson :

We are currently waiting to find out whether the government will include downtown Gatineau in its compensation initiative. The Gatineau Chamber of Commerce has not received any confirmation or notice indicating that this decision has been made. That explains what I have said today. There is a lot of talk about the national capital when it is convenient, but Gatineau often ends up being the poor cousin that gets crumbs, while Ottawa has the biggest part of the budget. This is part of the reason I am appearing today before the committee: I want to make the case that Gatineau has also suffered damages.

It would be appropriate for Gatineau businesses to also be compensated. I actually had a meeting today with the provincial minister, Mathieu Lacombe, who is responsible for the Outaouais region. He is carefully assessing the possibility of the Quebec government giving money to Gatineau businesses, like the Ontario government did for the city of Ottawa.

(1520) Mr. Gabriel Ste-Marie :

Thank you, Mr. Bisson. Of course, I sincerely hope that you'll be included. You have borne the brunt of this siege, along with the business owners in Ottawa. On that note, my colleague Nathalie Sinclair‑Desgagné, the member for Terrebonne, introduced a motion in the House of Commons stating that Gatineau businesses should be eligible for the assistance program. The motion was passed. Let's hope that this will also be taken into account. I find it a bit sad that the government still hasn't contacted you, since you're the president of the Gatineau Chamber of Commerce.

The government should at least announce its decision as soon as possible. Furthermore, the decision should be in line with what the House of Commons agreed to in terms of including you. That said, now that the siege has ended and there are fewer and fewer health measures, how are your members feeling right now? How is business going?

Mr. Stéphane Bisson :

A survey conducted by the Canadian Federation of Independent Business last week showed that 14% of businesses were simply thinking of declaring bankruptcy. I wouldn't go so far as to make the connection with the blockades. However, let's just say that they significantly affected morale. Business debt has increased to an average of $158,000. Of course, this is just the average debt per business. We know that not all businesses were affected by COVID‑19 to the same extent. In any case, this constitutes a considerable amount of excessive debt. Entrepreneurs must pay their debts every month. This also affects all Canadians.

Mr. Gabriel Ste-Marie :

Obviously, we wish your members all the best. This is a challenging situation. Let's hope that the situation gets better and that the support measures apply to Gatineau businesses. On that note, there should be as little paperwork as possible when making claims. I imagine that your members aren't immune to the labour shortage and are stretched thin, as is the case everywhere else.

Mr. Stéphane Bisson :

Given the circumstances, many people have decided to move on to new occupations. This has caused a labour shortage in businesses particularly affected by the pandemic, including the restaurant and tourism industry. I was talking with management at the Casino du Lac‑Leamy. They told me that they were having trouble finding employees because people had received training in other fields. We know that the federal government attracts a significant portion of the workforce because it provides well‑paying jobs and good working conditions. There's a double standard in the labour market.

When the claims program is implemented, it must be easy for entrepreneurs to manage. They shouldn't need to fill out endless paperwork.

Mr. Gabriel Ste-Marie :

My time is up. Thank you.

Mr. Stéphane Bisson :

Thank you.

The Chair :

Thank you, Mr. Ste‑Marie. [ English ] We will now move to the NDP. MP Blaikie, you have six minutes, please.

Mr. Daniel Blaikie (Elmwood—Transcona, NDP) :

Thank you to all our witnesses for being here today. I want to direct my first question to National Chief Archibald. First, thank you for being here to express some of the concerns that indigenous people have regarding the use of the Emergencies Act and what it may mean for them in future scenarios.

I think one of the opportunities here at this committee is to provide recommendations to government on what we learned through this particular use of the Emergencies Act and what kinds of things we might look at putting in place, whether that's changes to the act itself or whether that's better guidelines and practices to inform future uses of the act, if there are future uses of the act. I'm wondering if you might have some recommendations along those lines.

In your opening remarks, I think you made a good case for why the position of first nation people here in Canada is different from many other protests, particularly in respect of defending land and water rights. I'm wondering if you might have some recommendations for either us as a committee as we explore these issues or the government that you would like to see this committee make as part of its review.

(1525) National Chief RoseAnne Archibald :

Thank you very much, MP Blaikie. There needs to be more engagement with first nations. That's the first thing I would suggest, namely that this committee find a way to engage first nations across Canada on the deeper implications of the act its invocation. We're given five minutes. You saw that I went a little bit over my five minutes. It's not really enough time to talk about how the act can be made better. So that's my first recommendation.

The other aspects of it are for government to clearly understand that first nation rights and the things that we do stand up for are very dissimilar from what was going on with this “freedom convoy”. The Emergencies Act can't be used as a tool to suppress issues with land and water rights particularly, and any of the first nation and indigenous rights or aboriginal and treaty rights recognized under the Constitution, which also include the right to self-government. I think that definitely has to be taken into account when looking at the act and its application in the future.

I think there also needs to be a more fulsome engagement on the invocation of the act. For example, Minister Marc Miller called me the day before. There had been talk for a number of days about the act's being invoked, but the day before, he called me and said that this would be happening. To me, although I really appreciate the relationship I've built with Minister Miller, giving the national chief a heads-up the day before is not acceptable. There need to be processes in place that are definitely more fulsome than that when it comes to first nation land defenders and water defenders, in this case.

I hope that answers your question.

Mr. Daniel Blaikie :

Thank you very much. I guess the other component of this for me is that when we talk about Canada's indigenous peoples and the behaviour of government, we often see and have seen in the last 20 or 30 years or so the government adopt a kind of aggressive posture in respect of indigenous rights and the government's ability to circumvent them, but then we see, usually after a lengthy and expensive court battle, the rights of indigenous peoples affirmed in the court.

I'm wondering if you want to speak a little bit to that dynamic and how that might inform approaches to the Emergencies Act, because often justice delayed is justice denied. Clearly, the stakes are high in respect of using something like the Emergencies Act, which means it's important that we get it right the first time. Could you speak a little bit to that relationship and to some of the things the federal government might be able to do to ensure that when it comes to matters as serious as this, it gets it right the first time?

National Chief RoseAnne Archibald :

There is a need to complete the Constitution talks from the 1980s. I have called on the Prime Minister to have a table again with first nation leaders from across Canada, because that's the starting place of how we build this relationship in a truly equal and positive manner. Courts tend to be combative. We end up getting to a resolve, but the process of getting there isn't positive. I think if we had constitutional talks and we defined a process together on first nations' role and place within Canada as a country, given that the creative place is here.... This is our country, so to speak.

We are the original people. Our laws and all of our lives and processes—ceremonially, culturally and spiritually—have been in a way blanketed. A blanket has been put upon us in terms of Canadian laws and Canadian processes. We need to figure out the original government-to-government, nation-to-nation relationship. I think constitutional talks are a good place to begin. I also think we need a process in Canada that begins to define those rights. I believe the government did attempt that with legislation, but it was pushed back. I think if you look to first nations for those solutions, they will give them to you.

That's what I think this government has to be a little more open to, that they don't have the answers themselves. They bring something to the table, but first nations themselves have the solutions on how to make this country a workable and better place for everyone—truly just, truly fair and the place that we say we are.

(1530) The Chair :

Thank you. Thank you, MP Blaikie.

The Chair :

Members, we're moving into our second round. In this round, we have the Conservatives up first and MP Chambers for five minutes.

Mr. Adam Chambers (Simcoe North, CPC) :

Thank you very much, Mr. Chair. Welcome to our witnesses. I really appreciate your helping us with this study. It would be a pleasure to speak with you about a number of different topics, and I hope there is an opportunity to have you back to the committee in the future as we talk about innovation. Today, we're focused on the Emergencies Act, so I have a few factual, procedure-based questions that I hope we can get some clarity on. To the entities that received information from the RCMP—I believe this applies to Mr. Wiley at Wealthsimple and Mr.

Walper at Newton—was there any instruction provided from the RCMP or has there been any subsequent instruction on how you might use the information you received by virtue of the Emergencies Act?

Mr. Dustin Walper :

Blair, do you want to answer that?

Mr. Blair Wiley :

Sure. We received several notices from the RCMP. Those notices came to us via industry associations, regulators and law firms. The notices were helpful in that the original emergency order was extraordinarily broad. It was a concept of designated persons, which was very difficult to interpret. Within the crypto industry and the broader financial industry, we were all trying to understand how to make sense of how to interpret “designated persons”. It was helpful that the RCMP gave lists of names of the particular people of concern with respect to the convoy.

It was certainly helpful for us to be able to respond appropriately to things, like making sure that the transactions were not flowing to fundraising efforts.

Mr. Dustin Walper :

If I may add to that, the way we received the information was a little bit unusual in that it came from the RCMP through via our regulatory council, and we had to verify that it was coming from an appropriate channel. I will say that, in general—this doesn't just impact issues related to this kind of order or anti-money laundering concerns, but in general, even for things like fraud concerns—we don't have a great line into the RCMP, and we'd love to be able to build on that. It's something that doesn't seem to exist right now.

Mr. Adam Chambers :

Thank you very much. Our understanding is that you are now in possession of names and information that have come from the RCMP. The next logical question is, have you been told how to dispose of that? Are you using that information now to screen against new clients who are signing up with your service? How are you using that information on an ongoing basis? Are you using it?

Mr. Blair Wiley :

I'll go first here. There are two phases to this inquiry, Adam. The first phase was during the blockade when the Emergencies Act and the emergency order were in effect. During that time period, we were screening our client lists against the names provided by the RCMP to identify any connections to our client base. Once we received confirmation from the RCMP of the revocation of the Emergencies Act and order, we ceased any sort of additional screening of clients, new clients, for example, who might be attached to that list.

Mr. Dustin Walper :

It was similar for us, sir. We basically put into place a block once we received the initial information. Once we had confirmation that it was lifted, we removed that and we no longer use it to screen any new clients coming into our platform.

(1535) Mr. Adam Chambers :

That's helpful. However, for clarity, what I'm hearing is that you've chosen not to do that, but there have been no stipulations from the government or the RCMP on how you can go and use that information going forward, so that's....

Mr. Blair Wiley :

I think that's right. We have obligations under anti-money laundering laws to follow a risk-based approach to screening clients and transactions on our platforms, so every regulated intermediary will make appropriate decisions on how to interpret and apply that risk-based approach. Mr. Walper and I were speaking on behalf of our organizations and not about the way that others may have conducted themselves.

Mr. Adam Chambers :

I have one quick question left to either organization. Did you have any meetings with Department of Finance officials prior to the invocation of the Emergencies Act?

Mr. Blair Wiley :

We did not. We were sort of on the receiving end via notices received through indirect channels and through publication of orders on government websites. I think it's an area for improvement. On a theme of engagement, which has been mentioned here today, it would have been helpful to have had more direct communication with the Department of Finance.

Mr. Dustin Walper :

Yes, I agree. We were in a similar situation. It was quite unclear initially what exactly the implications would be for us, so we would definitely welcome more direct channels in the future.

Mr. Adam Chambers :

Thank you. I believe that's my time, Mr. Chair, but I would point out that the testimony of the CBA last week was that they had multiple conversations with the Department of Finance prior to the invocation of the act. Thank you.

The Chair :

Thank you, MP Chambers. We're moving to the Liberals and MP Chatel for five minutes, please.

[ Translation ]

Mrs. Sophie Chatel (Pontiac, Lib.) :

Thank you, Mr. Chair. I want to thank all the witnesses for joining us virtually. I'll ask Mr. Bisson a few questions. I represent the constituency of Pontiac, which includes a significant portion of Gatineau. I'm very interested in the compensation that the government may provide to businesses affected by the occupation of Ottawa. My colleagues and I, including Steven MacKinnon , who is deeply involved in this matter, are pleased with all the work done by Minister Pascale St‑Onge . On March 7, she announced that Gatineau businesses could receive the same compensation as Ottawa businesses. Mr.

Bisson, you spoke about some of the businesses that suffered damage as a result of the occupation of Ottawa and that can access this assistance. You think that this will help them. I just want you to clarify how it will help them.

Mr. Stéphane Bisson :

It's obviously a way to help heal an open wound. The Gatineau Chamber of Commerce and the Quebec tourism department are working very hard to make downtown Gatineau a prime destination, a gateway to the province of Quebec. We're also working hard to make Ottawa and Gatineau international tourist destinations. Demonstrations of this nature significantly affect the region's brand. As I explained, these sectors were the first industries truly affected by COVID‑19. In a way, these affected industries were our brave frontline soldiers. The businesses were excited to get back to work.

Unfortunately, the occupation of downtown ended that excitement. As I explained to your colleague, Mr. Ste‑Marie, these events mainly increased the debt of businesses that were already struggling. They have suffered several setbacks over the past two years. I'm asking for help for the affected businesses in particular. It's also necessary to think about how organizations and governments at a higher level, at the regional level, can help all the struggling businesses in the two downtowns right now. The issues are similar on both sides of the river.

(1540) Mrs. Sophie Chatel :

Thank you, Mr. Bisson. I couldn't agree more with your comments. Minister St‑Onge confirmed that Gatineau businesses will receive the same assistance as Ottawa businesses. There won't be any discrimination in this area. The minister also announced that this assistance would be provided by Canada Economic Development for Quebec Regions, a well‑known agency in Gatineau. In addition, the funding will be separate from the funding for Ottawa businesses. The mayor of Gatineau thanked Steven MacKinnon and Minister Pascale St‑Onge for their leadership on this matter. This is great news for our businesses. We're pleased about it.

Mr. Stéphane Bisson :

Yes, thank you.

Mrs. Sophie Chatel :

I have one last question for you, Mr. Bisson. Do you believe that all the federal assistance provided to businesses in Gatineau and the rest of the Outaouais during the COVID‑19 pandemic helped them to survive and get through it?

Mr. Stéphane Bisson :

I would say that it's true in most cases. However, in some exceptional cases, the assistance measures didn't apply. For example, if a business launched in January 2020, before the pandemic hit in February or March 2020, it didn't have a financial model for establishing comparisons. In other words, this type of business couldn't quantify its losses compared to the previous year. In particular, I want to acknowledge the resilience of the overlooked businesses that are still determined to succeed. I can tell you that there are many of these businesses in the market. I'm sure that there are many across Canada.

Mrs. Sophie Chatel :

You're right. That said, I think that the number of bankruptcies would have been much higher without the help that we provided to businesses. I hope that they'll weather the storm. I think that my time is up. Thank you, Mr. Bisson.

The Chair :

Yes, Ms. Chatel. Thank you.

Mr. Stéphane Bisson :

Thank you, Ms. Chatel.

[ English ]

The Chair :

We're moving to the Bloc and MP Ste-Marie for two and a half minutes.

[ Translation ]

Mr. Gabriel Ste-Marie :

Thank you, Mr. Chair. I was pleased to hear Ms. Chatel's news. Gatineau businesses can receive the same support as Ottawa businesses. This is really good news. I want to thank the government for this decision. Mr. Bisson, you said that the application process should be simplified because businesses are already suffering from a labour shortage and the owners must do everything. Should the government have public servants return to the office? Would this have a significant impact on your businesses? I'm obviously referring to the Quebec government. On February 8, it announced a plan for a gradual return to work in compliance with health measures. What do your members think about this?

Mr. Stéphane Bisson :

Thank you for that excellent question, Mr. Ste‑Marie. Unfortunately, I must leave after answering it, since I need to get back to work. Our position on this issue is an open secret. We've already appeared in the media to ask the federal government to provide a clear action plan for the return of public servants. I'm not only making the case on behalf of the Gatineau Chamber of Commerce, but on behalf of the entire country. Federal public servants must return to their buildings across the country. We all know that COVID‑19 isn't going away. We must learn to live with this virus. We need to get back to normal.

I know that normal won't be what we had before the pandemic. However, we need a game plan to bring public servants back to the workplace so that we can give some breathing room to downtown businesses. This economic fabric was built on regional economies. These businesses are in dire need of the public servants' presence.

Mr. Gabriel Ste-Marie :

Your response is quite clear. The presence of public servants has a major economic impact throughout the country. If Ottawa could do what Quebec has done and provide a reopening plan, it would be a great help to businesses throughout the country. Mr. Chair, I'm finished asking questions for this round. Thank you for coming to speak with us, Mr. Bisson.

Mr. Stéphane Bisson :

Thank you for the invitation.

The Chair :

Thank you, Mr. Bisson and Mr. Ste‑Marie. [ English ] Now we're moving to the NDP and MP Blaikie for two and a half minutes.

(1545) Mr. Daniel Blaikie :

Thank you very much. I'd like to use this time to come back to one of Mr. Chambers' questions. I wanted to ask the folks in the cryptocurrency industry who are here at the table about this.

In respect of not having any direct guidance from government as to what you can or can't do with the information you received from law enforcement during the Emergencies Act period, do you think it would be helpful for government to issue a directive—both retroactively for the period that has occurred already and if ever the act is used again—and for government to be a little more up front and explicit about what financial institutions of various kinds are expected to do with that information once the emergency period has ended?

Mr. Blair Wiley :

In my view, I'm not sure that retroactive guidance would be particularly helpful at this time. I think we're learning a lot. We'll look forward to the reports of this committee and the other federal study of the Emergencies Act.

Going forward, though, if we were ever in the position where we needed to invoke an emergency act in the future, I think that having more preparation around how we communicate between industry and government and law enforcement—perhaps running tabletop exercises so that the RCMP actually has contact information for every financial firm subject to the AML laws in order to be able to communicate directly—would put us in a better place if we were ever in a similar position again. I would encourage a broader focus on how we get better engagement going forward.

Mr. Daniel Blaikie :

Thank you. Mr. Walper or Mr. Mosoff.

Mr. Dustin Walper :

I would concur with that. I'm speaking on behalf of the industry, but I think it is broadly true that we would like to have more direct contact in general on this and other issues. Something we see a lot, on which we would love to be able to coordinate more, is combatting fraud. This is something that happens across the financial sector. It's something that we're very active in trying to find, and we would love to have a more coordinated approach that involved the RCMP and other stakeholders.

Mr. Daniel Blaikie :

Mr. Mosoff, I may be out of time, but if I'm not I would invite you to use what time I have remaining.

The Chair :

You have about 10 seconds.

Mr. Brian Mosoff :

Yes. Any kind of engagement would be great. I think it could allow the industry to go forward in a positive way to get access to proper banking and proper audits. That's something the industry is struggling with, so as we go forward as a country, any engagement to come up with frameworks for the industry to excel would be very much welcomed.

Mr. Daniel Blaikie :

Thank you.

The Chair :

Thank you. Thank you, MP Blaikie. We are moving to the Conservatives. From the committee room floor, we have MP Albas, for five minutes.

Mr. Dan Albas :

Thank you, Mr. Chair. Again, thank you to all the witnesses. I will be sharing my time with MP Lawrence so he will make up some of it. I will go back to National Chief Archibald. Chief, I know the Minister of Justice has said many times in the House of Commons that he believes that the emergencies order that was made by the government complies with the Charter of Rights. You seem to attest otherwise. Could you explain a little further?

National Chief RoseAnne Archibald :

I was really speaking not so much about the charter as about the constitutionally protected treaty and aboriginal rights as recognized under

section 35 of the Constitution. My concerns certainly are around issues of privacy for first nations and the implications of those. I hope that answers your question.

Mr. Dan Albas :

Further to that, we have heard those representing different companies here today talk about the lists they have received and how they may utilize those lists for other purposes, including the anti-money laundering/terrorist financing regimes they have in place. Does it concern you that these companies are retaining these lists?

National Chief RoseAnne Archibald :

Yes. What concerns me, I think, more is who determines who gets on these lists? I just want to reiterate that first nations are not terrorists. This is our country. These are our lands. These are our waters. We have citizens who want to protect those Creator-given rights. We should not be on any lists, but I am concerned that those lists do exist, yes. Thank you, Mr. Albas.

(1550) Mr. Dan Albas :

That's great. Thank you, Chief. I appreciate your answers today and your presence. I think I have run out of time. Maybe I will get another round, Mr. Chair. I will pass my time over to MP Lawrence so that he can continue his questions.

The Chair :

MP Lawrence.

Mr. Philip Lawrence :

Thank you very much. I will be going back to Mr. Wiley and Mr. Walper. To return to my previous line of questioning, what was the impact within your organizations of the amount of cryptocurrency that was frozen as a result of the Emergencies Act? If you can't comment specifically, maybe generally will be fine.

Mr. Blair Wiley :

I would say two things. One, no cryptocurrency was frozen. We did, however, respond to the lists of Bitcoin addresses that had been associated with fundraisers and did block some transactions that were directed to go to those addresses. The actual quantum of amounts blocked I don't have. I would have to follow up with a written response.

Mr. Dustin Walper :

It was a similar situation for us. We did block a small number of transactions after we received that information, but I couldn't tell you involving exactly how much. It wasn't a particularly large amount.

Mr. Philip Lawrence :

Thank you. At least from the anecdotal evidence of what you have seen, cryptocurrency did not play a major role in funding or fomenting the illegal protest or blockades. Would that be a fair comment?

Mr. Blair Wiley :

It would be a fair comment from our perspective. Within our client base, we did not see any significant volume of attempts to fund a transaction for the convoy.

Mr. Dustin Walper :

That's right, and similarly for us, we didn't see anything of significance. I can't speak more broadly, but through our platform, we didn't see very much.

Mr. Philip Lawrence :

Mr. Wiley, I want to pick up on a comment you had with respect to “designated persons”. I read the definition of “designated person” as an “individual or entity...engaged, directly or indirectly” in any activity. In the regulations, this goes into three different areas, which include being part of a protest that disrupts the flow of goods. It's extremely, extremely broad. Mr. Wiley, does that concern you? Does it make your job harder to identify people to the authorities?

Mr. Blair Wiley :

I think the initial order and the breadth of that definition you've alluded to did present challenges for companies like Wealthsimple. We have a very highly skilled team of AML professionals and lawyers and are fortunate to work with many very experienced colleagues, but all of us were working very hard and calling everyone we knew—peers in the industry—to try to understand how people were interpreting and applying those

definitions, both to be able to be responsive to government policy and the law and to also not cast too wide a net. It was a very difficult and stressful period when the order first came down with such a broad definition.

The Chair :

Thank you. That's your time, MP Lawrence. We are moving to the Liberals and MP Dzerowicz for five minutes.

Ms. Julie Dzerowicz (Davenport, Lib.) :

Thank you, Mr. Chair. I want to thank all the presenters today. It's a very interesting and important conversation. My first question is for Mr. Wiley, but if Mr. Mosoff or Mr. Walper want to respond, I'm open to that as well. If you look at the objective, it was very, very clearly stated when we launched the Emergencies Act. The objective was following the money and stopping the illegal blockades and the occupation. In particular, the measures introduced as part of the emergency economic measures order were very much catered to do that. You had talked about and answered in response to Mr.

Lawrence's question, and it seems that from what you indicated, there was a change in behaviour from the enactment of this act: It seemed to block some funding from actually happening. Can you maybe elaborate a bit more on that? That's just because, again, what we're looking at is that we've enacted this: We wanted to follow the money and stop the illegal blockades. That was our key objective, and we did our very best in a short period of time to try to put a few measures in place to do that. It seems like you've indicated that we were successful in actually stopping some actions.

Could you elaborate a bit more on that?

(1555) Mr. Blair Wiley :

Sure. I think it's helpful to distinguish the freezing of accounts from the blocking of money movement and crypto movement to fund the activities. We did find it generally more straightforward to identify Bitcoin addresses that were associated with fundraisers and to block transactions to those addresses. I think we focused our efforts, frankly, on that dimension of the emergency order, which was more with respect to money moving to fundraisers, rather than trying to focus specifically on particular individuals, given the breadth of that definition.

Ms. Julie Dzerowicz :

Okay. A layperson in general I think doesn't quite get Bitcoin yet, or cryptocurrency—

Mr. Blair Wiley :

Sure—

Ms. Julie Dzerowicz :

—and I might be speaking out of turn. Maybe people know more than I do, but I'm trying to follow the line, just for the average person who might be listening. Often, people are used to fundraisers. Money goes into some bank account, like a PayPal, and then there's some way to distribute the dollars.

Mr. Blair Wiley :

That's right.

Ms. Julie Dzerowicz :

How is it different from a Bitcoin or cryptocurrency perspective if it's raising money? How would fundraisers—people who might be organizing for the blockade—be able to actually grab those dollars?

Mr. Blair Wiley :

Sure. I will probably defer here to both Brian and Dustin, who I think have more technical expertise than I do. My personal view is that there's not that much of a difference from a platform like ours. It's just like how someone might decide to use their credit card to process transactions on a GoFundMe or GiveSendGo platform. If they want to send Bitcoin to a particular destination—a wallet on the Bitcoin blockchain—they have to key in the address for that Bitcoin wallet.

If it's a wallet address that has been identified as being associated with criminal activity or alleged criminal activity, we have the ability to stop that transaction from occurring through our centralized facilities. I would defer to Dustin and Brian if they'd like to add to that response.

Mr. Brian Mosoff :

I would add—

Mr. Dustin Walper :

Yes. That's a fair point. Go ahead. I'm sorry.

Mr. Brian Mosoff :

I was going to add that the centralized platform that the other two individuals operate is able to freeze those activities, whether it's through a direct withdrawal from their platform to an identified address.... It's also possible that an individual can withdraw to a self-hosted wallet that is outside the purview of that specific platform and make a direct donation. Should one want to use a self-hosted wallet, there wouldn't be any way for a centralized platform to freeze those funds.

What you would need to do at that point is use one of these blockchain surveillance tools to monitor the activity to see where those funds go and when they take place. When they cash out at some point, whether it's in the short term or the long term, you would be able to identify the interaction of those addresses and tie it back to a specific individual. There are two ways the assets can be used: through a centralized platform and through the self-hosted wallets. It's important, as we come up with frameworks, to understand that the technology is going to be used in both ways.

Ms. Julie Dzerowicz :

In your opinion, Mr. Mosoff, did the emergency economic measures order cover both the wallet and the other mechanism, or did you feel that it didn't quite cover the ability to track in both pockets?

Mr. Brian Mosoff :

I would say that it covered both pockets. The platforms that are regulated or are becoming regulated in Canada, and that are working with regulators on appropriate frameworks will monitor the activity. If an individual was using a self-hosted wallet and making a donation to an identified address that was not able to be frozen at that time, those platforms now have a red flag up, looking for interaction with those specific assets. They are still able to monitor that behaviour and those activities, and move them to funds should those addresses ever interact directly with their platform.

Ms. Julie Dzerowicz :

Thank you so much.

The Chair :

Thank you, MP Dzerowicz. Members, that is the end of our second round. This is a marathon session; we're here for three hours. I'm going to suspend now for five minutes for a health break and to allow our witnesses to get a little bit of air and a bio break. Thank you.

(1555) (1605) The Chair :

I call this meeting back to order. Welcome back, everybody. We are moving into our third round. First up are the Conservatives and MP Fast for five minutes.

Hon. Ed Fast (Abbotsford, CPC) :

Thank you very much, Mr. Chair. Welcome to all of our witnesses today. I will go directly to you, Mr. Walper. I took note that in your opening comments, you deliberately emphasized the issue of property rights as being critical for democracy. You also referenced due process as being absolutely critical. I'm trying to read something between the lines there, but I'm going to ask you to drill down into that.

Are you suggesting that before the Emergencies Act is triggered, due consideration has to be given to these key anchors of our democracy—due process and property rights—and to how those may be affected by the triggering of such an extraordinary piece of legislation? Do you want to drill down into that a little bit? I'd welcome that.

Mr. Dustin Walper :

I can speak to the impact of measures that might affect someone's ability to actually interact with the financial system. For me and my company, it's a very personal thing. Back in 2019 we were de-risked from a Big Six bank. They basically said we hadn't done anything wrong; they just didn't like our industry, even though it's legal. We were kicked off that bank's system with a couple of months' notice. Frankly, it almost put us under. We had to scramble to find another bank that would accept us at a time when cryptocurrency wasn't nearly as mature and regulated as it is today.

Frankly, even today it's very difficult. I really just wanted to make it clear that the impacts of those sorts of measures on businesses and on individuals are quite severe. It's very difficult to operate in society in 2022 without access to the financial system. I think that's something we need to be very careful about putting some guardrails around.

Hon. Ed Fast :

Did you or anyone in your company or your legal counsel ever analyze the threshold that the government applied in triggering the EA?

Mr. Dustin Walper :

That's nothing something I am really familiar with.

Hon. Ed Fast :

Okay. Are you concerned that the reputation of Canada's cryptocurrency environment, which is presently among the world leaders, I think you would agree, has been in any way tarnished by the triggering or invocation of the Emergencies Act?

Mr. Dustin Walper :

I think any time companies like ours are, for example, seeking investment and going to markets beyond Canada, which is very common for tech companies like ours, the reputation of the country as a stable jurisdiction in which to invest, where property will be protected and there's due process, etc., is a really crucial consideration. For example, there was coverage in the types of publications our investors would read—the Wall Street Journal, The Economist, the British publication FT, and so forth—and I know that there were anecdotally conversations about it. I can't really speak to the broader impact, but I know that it definitely was a subject of conversation.

(1610) Hon. Ed Fast :

Have you formed an opinion on whether the Emergencies Act should have been triggered or whether these police authorities and additional financial measures could have been undertaken without the act being triggered?

Mr. Dustin Walper :

I'm not sure I would be able to say, but I will say that, in general, we've seen a lot of tools that exist for following the process through. I'm not really sure. I'm not really qualified to say. But I think there are a lot of existing processes and mechanisms that can be used for those types of circumstances.

Hon. Ed Fast :

You referred to self-hosted wallets, which might fall outside the purview or the ability of police and bank authorities, financial authorities, to actually freeze and seize. Are you aware of whether there has been an increase in the number of your clients who are choosing that option rather than accounts facilitated by your firm post the exercise of the Emergencies Act?

Mr. Dustin Walper :

I couldn't say for sure whether there's been a change in behaviour. We haven't really extensively studied that. I should clarify or maybe emphasize the fact that even if someone has Bitcoin in a self-hosted wallet, you can still, through the regular court process, seize that wallet. It can be traced to a person, typically, depending on how they've done it. There are lots of cases where funds held in a wallet, just like a suitcase full of cash, can be seized with the appropriate process.

Hon. Ed Fast :

That's always under due process. Is that correct?

Mr. Dustin Walper :

That's correct.

The Chair :

Thank you. Thank you, MP Fast. We're moving now to the Liberals and MP MacDonald for five minutes.

Mr. Heath MacDonald (Malpeque, Lib.) :

Thank you, Chair. Thank you, guests, for being here today. It's very interesting and I'm very interested in the cryptocurrency platforms and the processes you want to deal with or are dealing with. I want to follow up on Mr. Fast's comments. The donations, the $1.1million, came in through Bitcoin, and then all of a sudden we had a lawsuit by the citizens of Ottawa, and a judge froze that amount, $1.1 million or $1.3 million. I can't quite remember what it was.

I guess what I'm asking is, how does that affect the regulatory process that we're debating with respect to how far the outreach should be from the procedures that are in place now? Or is that something different altogether? I'll throw it out to anybody who wants to answer it.

Mr. Blair Wiley :

I'll take the first crack at it. I think it's a good question. One thing I would say is that with respect to cryptocurrency businesses based in Canada, like Newton, Wealthsimple and Ether Capital, a court order or a legal development can be put in place directly, to which actors based here must be responsive. I think part of the nature of cryptocurrency is that it's everywhere and nowhere at the same time.

It's like the Internet in how global it is, so I think it behooves all of us to really invest in having a regulated community of cryptocurrency companies based here in Canada that are going to be responsive and are going to be engaged in processes like this and respond when orders take effect. When clients, Canadian consumers, decide to buy Bitcoin and hold it on some foreign platform based in an offshore jurisdiction, just as when wealthy Canadians choose to put their assets into offshore bank accounts, it just becomes that much more difficult for the arm of the Canadian court system to apply.

Mr. Heath MacDonald :

Thank you. How many crypto companies are there currently in Canada? Someone mentioned an association. You said the RCMP contacted the association relevant to this issue. I know there was a little bit of concern about how they perhaps should have contacted each company, so I'm curious to know how many companies are in Canada and how many are under the association that was mentioned previously.

(1615) Mr. Blair Wiley :

I think the FINTRAC record is to be reviewed, but I think there are hundreds of companies that are licensed and registered for virtual currency money services in Canada. There's a huge range with everything from those ATMs you might see in a corner store to digital platforms like Newton or Wealthsimple, to companies based entirely outside of Canada that have taken a step at licensing in Canada. There's no real association that speaks for the entire cryptocurrency industry that would also represent all members of the community. Things work much more haphazardly through the 10 largest or so platforms, into which both Newton and Wealthsimple would fall.

Mr. Heath MacDonald :

Interesting. Who is developing the policies or regulations now? You guys talked about different policies, although someone mentioned different

interpretations. I guess I'm interested, as a policy-maker or being a part of a policy-making, in what framework you're working within or what group you are working within. Are we at a point where we need to say that we need to sit down with people like you and with the government and say that we need to develop a framework? Where are we at? To me, there are an awful lot of grey areas here. Maybe I just don't understand it. I know it's been around for a number of years, but it just seems to be on the precipice of something bigger, and this has obviously shed a light on it.

I'm kind of wondering how much responsibility of the grey area is yours, and how much responsibility of the grey area is government's?

Mr. Dustin Walper :

Blair can speak to some of the more legal aspects but, in general, the industry needs to do better at forming associations to advocate for certain policy. I also think there could be new federal legislation. A lot of the existing regulation that's happening right now under the various securities commissions provincially is based on shoehorning existing securities law. In some areas, it works well. In other areas, it doesn't work quite as well.

It also doesn't really consider the fact that we should be thinking more broadly about international competitiveness in terms of jurisdictions like Switzerland that have really strong legal frameworks and banking frameworks in place. You can see what that's doing for their economy. There are a bunch of things about which we would love to be involved in a conversation.

The Chair :

Thank you. Thank you, MP MacDonald. That's the end of your time. We're moving to the Bloc and MP Ste-Marie for two and a half minutes.

[ Translation ]

Mr. Gabriel Ste-Marie :

Thank you, Mr. Chair. My question is for Ms. Archibald, the national chief of the Assembly of First Nations. Ms. Archibald, I want to thank you for your presentation and for your answers to the various questions so far. I want to make sure that I understood your point in order to determine whether, from your perspective and the perspective of the Assembly of First Nations, the Emergencies Act was necessary to break up the siege taking place in Ottawa. I gather that the use of this act sets a precedent. The government could use it more often when demonstrations occur anywhere in the country.

If this act, the legislative atomic bomb, is used too often, it will have ramifications and it may unfairly affect first nations members, Inuit and Métis people because of systemic racism. Is that right?

National Chief RoseAnne Archibald :

Thank you for your question. I don't speak French. [ English ] I want to say yes. That's particularly our concern. We understand that extremist groups were involved in the situation in Ottawa. I felt it was very important to come to this committee to explain that first nations are neither extremist groups, nor are we terrorists. When we get involved in civil actions, it is always about protecting those rights. I am concerned about the long-term implications of this, and I expressed that concern immediately to Minister Miller when he called me.

I have felt compelled to explain this to the committee and to be on record about that, so that when we move forward into situations where first nations are involved in civil actions, the Emergencies Act is not immediately sought. There will be processes that we, hopefully, negotiate and walk together on, rather than having our people, as I said, being subject to undue surveillance, pressures and financial implications because of the invocation of this act.

Merci for your question.

(1620) [ Translation ]

Mr. Gabriel Ste-Marie :

Meegwetch .

[ English ]

The Chair :

Thank you, National Chief Archibald. Thank you, MP Ste-Marie. Now we're moving to the NDP and MP Blaikie for two and a half minutes.

Mr. Daniel Blaikie :

I would like to offer up an opportunity to folks from the cryptocurrency industry to talk somewhat along the lines of what I asked National Chief Archibald earlier. This committee is charged with looking at how the government used the powers under the Emergencies Act, particularly those financial powers. We're in a position to make recommendations to the government, either on changes to the act or other kinds of policy and direction that it might have provided alongside the declaration of the emergency.

Are there any particular recommendations that you have, either for this committee or that you think this committee should be making to government? I will start with Mr. Mosoff and move down the line.

Mr. Brian Mosoff :

This question will be better answered by the other two members in the crypto community, but the risk here is that the community gets further tainted and has a more difficult time getting access to appropriate banking and having audit firms help them come into compliance and oversee their businesses. It's really hard to measure what those long-term implications can be from a very small series of events. I will turn it over to both Blair and Dustin for further comment.

Mr. Blair Wiley :

I would reiterate that we see millions of Canadians owning cryptocurrency now, mostly because they're interested in this technology, the asset class and the promise that it holds. We see great companies being built that have cryptocurrency as part of their core corporate strategy. For the Department of Finance and for all of the federal government, there is an opportunity to be responsive and to engage.

That way, when we talk about financial measures and emergency measures, we don't just gravitate to the big five banks and talk to them and perhaps not give proper attention to the millions and billions of dollars of assets, investments and client interest in the cryptocurrency space, as well as other wealth management spaces in the fintech community more broadly. We can certainly increase engagements. We could make better policy and have better communication in these moments of emergency that, hopefully, are rare and few and far between.

Mr. Dustin Walper :

I think that hits the nail on the head. What we would love to see, as an industry, is a broader set of federal policies and perhaps some legislation that really makes Canada the place for companies that want to invest in this space, who want to do it legally and safely, and with concern even for the safety of investors that this is the best country to do it in. We would love to participate in any conversation about that.

The Chair :

Thank you. Thank you, MP Blaikie. That's the time. We are moving to the Conservatives. I have MP Lawrence for five minutes.

Mr. Philip Lawrence :

Thank you very much. I want to talk briefly about Bluesky with Mr. Mosoff, Mr. Wiley and Mr. Walper. If we did everything right, what could be the potential, in general terms, of the crypto industry for Canada? Are we talking about thousands of jobs or tens of thousands of jobs, millions of dollars or billions of dollars for the Canadian economy?

Mr. Brian Mosoff :

I see that this as going to be a 10-plus-trillion dollar industry within the next decade. Stateside, we're seeing national efforts to turn to existing agencies, asking for recommendations on and study of certain areas, whether it's trading platforms, how stable coins are—tokenized versions of a dollar that exist on these blockchains—and what appropriate frameworks are. We can do the same thing here, and we should do the same thing here. There's the opportunity, again, to lean into this to figure out how we legitimize it and make sure that it's being used in an appropriate way.

There are thousands or tens of thousands of jobs for developers for platforms, whether they're.... Today, we're talking largely about exchanges, but there are going to be structured products and new verticals that emerge. We've seen a proliferation of stable coin activity in NFTs, which is digital art that's living on a blockchain. We're seeing decentralized finance and the opportunity to build lending and trading. Different types of finance exist natively on a blockchain.

As someone who goes to these various events, I see all that developer activity, and I would love to see it here, but we need, as everyone else has mentioned, a national framework and initiative to consult with industry to figure out how we make that appropriate.

(1625) Mr. Philip Lawrence :

Perfect. You captured it well. I wanted to catch up on that. I will get back to you, Mr. Walper, I promise, but that captured it well. Any one of the three witnesses can feel free to respond to this. What I'm hearing loud and clear is that you're not averse to regulation. What you don't want—maybe I'm putting words in your mouth, and feel free to correct me—is an ad hoc knee-jerk regulation, a little bit like what we saw with the invocation of the emergency measures act. If we don't respect property rights in this country, to what extent could it potentially undermine our ability to compete in a crypto space?

Mr. Brian Mosoff :

My very short answer will be that we have a fragmented regulatory system. It's hard for platforms to be competitive with those in other jurisdictions. Canadians want access to all of this really exciting activity and we need to find a way to allow them to use the Canadian platforms as access points in appropriate ways. We need some way of harmonizing everyone's efforts to have that activity here.

Mr. Dustin Walper :

If I may, I'll quickly give a brief, concrete example of that.

Mr. Philip Lawrence :

Yes.

Mr. Dustin Walper :

In Canada, currently, all of our platforms, like ours and like Wealthsimple's, are becoming regulated. Much of that regulation falls under existing securities law, so it puts a lot of the applications in the Web3 decentralized finance world. That's somewhat out of our reach, because a lot of them would be classified as securities; therefore, there's a long and onerous approval process in order to offer them to Canadians. What happens is that Canadians then use offshore platforms that are not nearly as regulated as ours are to access those services and those tools. We'd love to be able to offer that and invest in that right here at home.

Mr. Philip Lawrence :

Thank you.

Mr. Blair Wiley :

The only thing I would add is that the developer community for cryptocurrency applications is strong, is growing and is also very mobile. They will move to jurisdictions where they see friendly environments for developing new technology, new applications and new systems. We have a perfect example in the founders of the Ethereum blockchain network, which was really the pioneer in enabling much more sophisticated financial transactions on a blockchain, besides simple Bitcoin transactions.

Those homegrown founders started out in Canada at the University of Waterloo and moved to Switzerland because there was a regime there that enabled the establishment of a foundation that would really govern the development of the Ethereum blockchain.

While we still have developers here, they do look at those examples and ask, “Would I be better off in Singapore, in Switzerland, in other parts of Europe, or even in the United States, because there's more of a supportive environment for me to develop innovative new applications that don't fit neatly into any one regulatory framework?” That's the opportunity, and also the threat, in front of us.

Mr. Philip Lawrence :

Thank you very much for that. Thank you very much for the testimony and for what you're doing for the Canadian economy. I'm going to change gears now and go to National Chief Archibald for a second, just quickly, because I see the chair unmuting, and that's never good for me. In the definition of “designated person”, it says “indirectly” or “directly”. If in fact we have this trigger—the emergency measure trigger—and it's triggered with respect to a first nations protest or otherwise, does it give you concern that literally anyone who supported a blockade that might be for a rightful and good cause could have their bank accounts frozen, National Chief?

The Chair :

Could we have a very short answer, please, National Chief Archibald?

National Chief RoseAnne Archibald :

Yes. I'm concerned for anyone who could wrongfully have their bank accounts frozen for civil actions that involve treaty and aboriginal and inherent rights—yes.

The Chair :

Thank you. Thank you, MP Lawrence. We're moving to the Liberals. We have MP Baker up for five minutes.

Mr. Yvan Baker :

Thanks very much, Chair. I'd like to continue with this really interesting discussion about cryptocurrency and its potential. I'll direct my question to Mr. Mosoff, but if others want to chime in, I'd be eager to hear your thoughts. My background is in business. I was a management consultant. I helped businesses grow and develop and create jobs in Canada. Certainly, I'm one who believes that we need to seek opportunities to grow economic opportunity in Canada and to make sure the benefits of that are shared widely. Here's one of the questions I have for you, Mr. Mosoff.

Do cryptocurrency and e-wallets—some of the concepts you've been talking about—allow us also to prevent illegal activity to the same degree that our current system does? Obviously, I want to grow this economic opportunity for people, but I also want to make sure that we're doing it safely and responsibly and that it's not facilitating harm. Could you speak to that a bit?

(1630) Mr. Brian Mosoff :

Thanks for the question. This is where things get very nuanced. It is much harder to use a self-hosted wallet as a choke point. Due process would need to take place. You don't have a centralized entity that can shut off that wallet or activity, but the opportunity here is to use new tools and train new personnel to use the analytics software available. There are leading companies out there, like Elliptic and Chainalysis, and these are the ones that are worth becoming familiar with as the space evolves, again, to monitor that activity to ensure it's being used in an appropriate way.

When a user does have a self-hosted wallet—software-based, hardware-based, a little USB key at home—they are able to interact with the wider ecosystem that may not reside in our jurisdiction. It may not have identified individuals. There's a different risk. I do think education is very important in this space for Canadians who may not be familiar with the risks of a self-hosted wallet and what some of those contracts or applications they're interacting with may carry. Again, I think it's important here. The opportunity is to create different access points for different individuals.

Some individuals are more comfortable on a centralized exchange, and that's where activities can be vetted for appropriateness and how they would be offered. Then there are users who want to experiment with the technology and take on more risks, and those wallets will have to be monitored by different tools to ensure they're being used in appropriate ways.

Mr. Yvan Baker :

Okay.

Mr. Blair Wiley :

I would just add that I think it's important to always come back to the point that the technology itself is neutral. It's technology that can be used for good or for bad. There are many, many examples of it being used for good. Unfortunately, there are some examples of it being used for bad. The important thing to emphasize, though, is that it is a very transparent, open public ledger of all transactions. It's very difficult for folks to hide illicit activity for very long. The auditability and transparency of the blockchain is actually a very powerful tool to deter financial crime.

I think the thing that all companies who are in this space are trying to do is figure out how we really amplify the good applications of this technology and continue to develop better tools so that it's not used for improper purposes.

Mr. Dustin Walper :

Some of the good applications—

Mr. Brian Mosoff :

I would add—

Mr. Dustin Walper :

Sorry. Go on.

Mr. Brian Mosoff :

I was just going to add that recent studies show that even though the dollar value of funds being used in illicit ways is rising, that's also just because of the rise in the value of these assets as a percentage of the activity taking place on the networks themselves, rather than centralized platforms, and the percentage of these transactions is falling significantly over time. That's because of better tooling and better monitoring. That's something to keep in mind.

Mr. Yvan Baker :

Mr. Walper, were you trying to get in there?

Mr. Dustin Walper :

I was just going to say that on some of the benefits, some of the nuance is that, for example, it gives the ability to dissidents to be able to get access to funding for journalists abroad. There is a very nuanced discussion around how to enable the good applications and minimize the bad.

Mr. Yvan Baker :

Yes. That's a discussion I look forward to having with you and others. In

summary, I'm eager to hear about and to facilitate the opportunity, and I also want to make sure that we mitigate the bad. We see the bad in a number of contexts. Sometimes the bad in something is the result of a small number of cases, but the impact of that can be broad. Sometimes it's narrow, but sometimes it's broad. We see that in a variety of contexts. I really appreciate you all being here and sharing that. I'm here to learn more. I'm looking forward to seeing how we can explore the opportunity and mitigate some of those negatives that we also want to mitigate. Thank you very much, Mr. Chair. I think that's my time.

The Chair :

Thank you, MP Baker. That does end our third round, members. We are moving into our fourth round. We have the Conservatives up first. MP Chambers, you have five minutes.

(1635) Mr. Adam Chambers :

Thank you very much, Mr. Chair. I'd like to follow up with some of this discussion. Mr. Mosoff, you're an allocator of resources. You're making investment decisions, but you're also involved in the community. I'm just curious about the general reaction in the community, in the crypto community and the investor community or even on the client side, when the Emergencies Act was introduced. What was the general feeling?

Mr. Brian Mosoff :

I'd also point out, before I get into the specific act, that there are some things that globally we have done very well. We were the first to create true spot Bitcoin and Ethereum ETFs. We've led the way in regulation and policy on certain fronts. Platforms and exchanges are starting to come into compliance and have a path towards appropriate registration. At the same time, there was a large amount of negative reaction to this.

Whether that reaction was warranted, I can't really comment, but there were a lot of people wondering if it were an overreach and what implications there would be for platforms in the future. Will those platforms want to continue, if they're not domiciled here, to service Canadians? I'm not sure.

I think certainly new projects that want to build here currently don't have, outside of the act, the ability to perhaps perform certain activities or offerings or participation, but that's a broader conversation around just nationally how we're going to come up with frameworks to make sure that we can be competitive on the global landscape. There was certainly some negative backlash that the industry will have to combat.

My personal concern is more around whether it pushes away banks and audit firms from offering traditional financial services to the good players who are here and who did react appropriately to those measures.

Mr. Adam Chambers :

Just following on the offering of financial services, I have been hearing anecdotally that some crypto start-ups already have challenges getting banking services from the Canadian banks, and in fact actually have to look to the U.S. to get serviced. Is that your experience as well?

Mr. Dustin Walper :

I can probably speak to that—

Mr. Brian Mosoff: That is accurate—

Mr. Dustin Walper: Oh, sorry, Brian.

Mr. Brian Mosoff :

I'll let you take it on, but that is accurate. Despite our being a public issuer, we are very fortunate to have banking relationships and a “big four” auditor. Those were not easy to obtain. I do hear from a lot of other industry players that this is difficult. They come to us for advice—there's pressure from the audit firms, or above them at the CPAB level—on what can be appropriate activities that can be audited. It's still certainly a point of friction in the industry. I'll turn it over to Mr. Walper to add some colour.

Mr. Dustin Walper :

We're fairly fortunate at this point because we're large enough that we represent significant business for the credit unions and banks we work with. One of them is actually on the east coast, Credit Union Atlantic. It was bold enough to work with us in 2019 and it took the risk. For new start-ups in Canada trying to get banking, if they're in the crypto space, particularly if they're processing payments, it's nearly impossible even now for them to get banking. This is a significant problem if we want to be a leader globally. We have to solve the banking piece of it because without that, someone can't have a business.

Mr. Adam Chambers :

That's very helpful. I suspect we could talk about this for quite some time. If I may, I'd just like to turn to National Chief Archibald for a moment for a couple of quick questions. One of the concerns that I had and that I am also hearing you discuss this afternoon is that some of the individuals who have been involved or have been charged with activities have been charged with public mischief. The challenge is that using the Emergencies Act against individuals engaged in civil acts, or public mischief in this sense, sets a dangerous precedent for when it may be used in the future. Would you like to expand a little bit more on that concern?

National Chief RoseAnne Archibald :

I just want to talk about how underlying all of my concerns is the systemic, overt and covert racism and how those impact first nations that are involved in civil actions. I am a former activist myself, and I have been involved in civil actions and have been charged.

I think that ultimately we need a process in this country to deal with outstanding claims, with outstanding land and water issues that are not being resolved by the processes in place, in order to avoid having first nations people feeling as though they have to get involved in serious actions such as blocking roads and highways, which I personally have done as an activist and as a chief activist. What concerns me about the Emergencies Act is that we're not on a level playing field with non-indigenous Canadians.

It's very easy for the Emergencies Act to be used as a tool against first nations people because of systemic, overt and covert racism that exist within the financial institutions in Canada and within the law enforcement institutions and even within government. Those things certainly place us at a disadvantage, in that we can be deemed to be a threat when, in fact, we're not a threat. As the original people of this country, we are being placed in a position and we are being placed as a minority because of genocide and because of legislation.

The implications of the Emergencies Act are far and wide, and that's why I am standing before you today.

Meegwetch .

(1640) Mr. Adam Chambers :

Thank you very much, National Chief Archibald. Those are exactly the concerns I have, that we've actually normalized the use of the Emergencies Act now and we need to be careful about how it may be used in the future. Thank you so much.

The Chair :

Thank you, MP Chambers. We are moving to the Liberals. MP Dzerowicz, you have five minutes. Go ahead, please.

Ms. Julie Dzerowicz :

Thank you so much, Mr. Chair. I'm actually going to pick up the baton from where Mr. Chambers left off with Ms. Archibald, if that's okay. I do not want there to be, in any way, an idea that there is an attempt to normalize the use of the Emergencies Act. I think it was very specific that this was time-sensitive and geographically specific, and that the moment it was no longer needed, it would be revoked, which is what happened after a few days. I think it's important to say that.

Chief Archibald, I am really appreciating your comments, particularly those of the last couple of minutes, in which you've really articulated your concern. I do agree that there is systemic racism and unconscious bias that often we need to be reminded about—all the time, every day, every moment—because it's easy to forget. Because you have said this a number of times, I've become a little concerned about it. You've been talking about how you don't want first nations to be seen as terrorist or extremist groups.

I just want to make sure that there is nothing in the current Emergencies Act order that in any way identifies first nations as terrorist or extremist groups. Can you confirm that?

National Chief RoseAnne Archibald :

My concern is that the act is a tool, and the tool itself can actually name and place labels upon people. That's my concern. When we talk about the Emergencies Act, there has been a lot of talk about these far-right extreme groups that were linked to this “freedom convoy”. There was a lot of talk about anti-terrorism in the way of financing. I just want to be clear that those are the links that I'm making, and I want to be clear that first nations have rights in this country.

I'm really grateful that you've acknowledged the systemic racism—the overt and covert racism that exists—and what are we doing to address that? Certainly, when you look at the Emergencies Act, it has to be taken into account as you move forward on perhaps amending this act or engaging first nations on the future invocation of this act.

Ms. Julie Dzerowicz :

Chief Archibald, I think it has come across loud and clear the need to engage if we were to invoke this again. Hopefully, we don't have to—at any time soon or ever—invoke this, but I just want to make sure that there's nothing currently in the act that actually identifies first nations as part of extremist groups or terrorists. I appreciate your comment your indicating that the consultation has to include first nations moving forward if we were ever to enact this act.

My other comment is that you've spoken about how, if this type of protest or occupation were started by first nations, you feel there would have been a different response by local police. You started your testimony and presentation today about this. I do want to acknowledge that I've heard from a number of different groups—the Black community, visible minorities—indicating similar things. What I want to ask you, just very quickly, because I know that there are two other inquiries that are under way right now....

One is a House-Senate committee that's under way right now and is looking at the enactment of the act, at whether it was needed and at how the act has been used. Also, I believe that the City of Ottawa is looking at its police force and what happened. I want to ask whether you, as the chief, have had any conversations directly with the former chief of police or the current acting chief of police about your concerns.

(1645) National Chief RoseAnne Archibald :

I don't want to localize it just to Ottawa. There are problems in this country, and this government has made some headway on some issues, but tackling the systemic racism that exists in all law enforcement agencies is a problem that needs to be solved. Tackling systemic racism within the banking and financial institutions is a problem that needs to be solved. These issues are tied to what this committee is looking at and so that, to me, is more important. I'm the national chief. I'm not the national chief of Ottawa. I'm the national chief of the whole country.

When I'm talking about systemic racism, it exists everywhere. How do we deal with that? The partner for me is the federal government. It's Minister Mendicino . It's Minister Blair . It's other people who are at that level who I would have those discussions with.

Ms. Julie Dzerowicz :

Thank you. Then I have one more question.

The Chair :

Thank you. That's the time we have. Thank y