U.S. concern about convoy blockades meant a 'dangerous moment for Canada,' Freeland tells inquiry

13 days ago CBC

The history-making Public Order Emergency Commission, which is reviewing the federal government's use of emergency powers last winter, is hearing testimony in Ottawa. The inquiry is expected to last six weeks.

As Finance Minister Chrystia Freeland tells it, Brian Deese is a hard man to get hold of.

So when U.S. President Joe Biden's senior economic adviser requested a call with her on Feb. 10 about the ongoing border blockades, Freeland said, she knew the stakes were high.

"That was a dangerous moment for Canada, I felt," the deputy prime minister testified Thursday before the Emergencies Act inquiry.

"That one conversation was a seminal one for me. And it was a moment when I realized as a country, somehow, we had to find a way to bring this to an end."

Freeland described the call with Deese in front of the Public Order Emergency Commission Thursday. The commission is reviewing the federal government's decision to invoke the Emergencies Act on Feb. 14 to clear anti-public health measure protests in Ottawa and deter border blockades. 

As part of its work, the commission is probing whether the government met the threshold to trigger the never-before-used legislation.

Tearing up at one point, Freeland defended her government's actions by arguing economic security is linked to national security.

"I really do believe our security as a country is built on our economic security," she said.

"And if our economic security is threatened, all of our security is threatened. And I think that's true for us as a country. And it's true for individuals."

Brian Deese, director of the National Economic Council, speaks during a news conference in the James S. Brady Press Briefing Room at the White House in Washington, D.C., US, on Tuesday, July 26, 2022. (Yuri Gripas/Bloomberg)

Freeland said that after her call with Deese, director of the U.S. president's National Economic Council, she knew the blockades had set an "amber light flashing" south of the border regarding supply chain vulnerabilities with Canada.

She said she worried the blockades would tip the balance in favour of Democrats and Republicans who support a protectionist trade stance.

"It wasn't just the immediate damage, it wasn't just the immediate harm. It wasn't, 'Oh, you know, this plant loses four days of operation,'" Freeland said Thursday.

"The danger was were we in the process, as a country, of doing long-term and possibly irreparable harm to our trading relationship with the United States."

At various points in early 2022, protesters blockaded border crossings in Windsor, Ont., the small town of Coutts, Alta., Emerson, Man., and the Pacific Highway in Surrey, B.C.

The government cited a threat to Canada's economic security when it invoked the Emergencies Act last winter.

The definition of what constitutes a pubic order emergency has been studied closely during the public hearings, with critics arguing the government did not meet the requirements of the legislation.

Under the Emergencies Act, a national emergency is defined as one that "arises from threats to the security of Canada that are so serious as to be a national emergency."

The act then points back to CSIS's definition of such threats, which include harm caused for the purpose of achieving a "political, religious or ideological objective," espionage, foreign interference or the intent to overthrow the government by violence. It doesn't mention economic security.

Last week, Clerk of the Privy Council Janice Charette testified that she took a wider interpretation of the act that included concerns about the economy when she advised Prime Minister Justin Trudeau to invoke the act.

WATCH | Deputy prime minister explains discussions with White House official

Deputy prime minister explains text discussions with White House official

Duration

3:13

Deputy Prime Minister Chrystia Freeland tells inquiry she and White House director of economy Brian Deese discussed how trade harm caused by the self-described 'Freedom Convoy' wouldn't just be felt temporarily.

The government has not waived solicitor-client privilege on the legal opinion it received about invoking the act. 

CEOs warned Canada was seen as a 'joke'

In a phone call with Canadian bank CEOs, Freeland was told repeatedly that Canada's international reputation was at risk.

A readout of the Feb. 13 call was entered into evidence Wednesday. 

One person on the call, whose name was redacted in the document provided to the commission, said Canada had been labelled a "joke" by American investors.

"I had one investor say, 'I won't invest another red cent in your banana republic in Canada,'" the speaker said. "That adds to an already tough investment perspective."

WATCH | U.S. incentives on EVs and batteries would have been 'a disaster' for Canada, Freeland says

U.S. incentives on EVs and batteries would have been 'a disaster' for Canada, Freeland says

Duration

0:51

During testimony at the Emergencies Act inquiry, Deputy Prime Minister Chrystia Freeland discussed integrated supply chains between Canada and the U.S., saying incentives that encouraged American-built electric vehicles and batteries would have been bad for Canada's economy.

Another speaker said Canada needed "to show the world proactively that we won't let this happen again and that our trade corridors will remain open."

"Canada's reputation is indeed at risk," the speaker said.

"We should think about putting the military in place to keep the border crossings moving even after the protesters are removed."

WATCH | Freeland gets emotional in testimony before Emergencies Act inquiry

'I have to protect Canadians': Freeland gets emotional in testimony before Emergencies Act inquiry

Duration

0:50

During her testimony, Deputy Prime Minister Chrystia Freeland recalled bankers warning her of the effects the self-described 'Freedom Convoy' would have on Canada's economy.

One speaker, whose name was also blacked-out, expressed concerns about how the government would address the blockades.

"I am very concerned about the banking system being seen as a political weapon of the government," said the business leader, whose name was also redacted.

"We can't politicize the banks."

On Thursday, Freeland choked up as she recalled the warning on the call that Canada's reputation was at risk.

 "I had, at that moment, a very profound duty to Canadians to stand up for them," she said, her voice cracking.

"I'm surprised that I'm getting emotional ... when I heard that, I realised I'm the finance minister, I'm the deputy prime minister, I have to protect Canadians. I have to protect their well-being."

Freeland feared Canada would be 'discredited' as an ally of Ukraine

Later that night, cabinet would meet to discuss invoking the Emergencies Act. Freeland said that between the call with bank officials and the cabinet meeting, she had a meeting to discuss intelligence suggesting Russia intended to invade Ukraine. Russian troops moved in on Feb. 24.

In an interview with commission lawyers in September, Freeland said she feared the protest would affect Canada's response to the war. A summary of that interview was entered into evidence Thursday.

Minister of Finance Chrystia Freeland appears as a witness at the Public Order Emergency Commission in Ottawa, on Thursday, Nov 24, 2022. (Sean Kilpatrick/The Canadian Press)

"Freeland also pointed out that if Canada's capital had still been occupied when Russia invaded Ukraine, in her view, such a situation would have completely discredited Canada as an ally in support of Ukraine," said the summary document.

"Russian media would have been focused 24/7 on what was occurring in Canada, which would have made Canada appear very weak at a time it needed to be strong. Further, it would have made it very difficult to take action after the invasion."

Minister faces questions about frozen accounts

Freeland also fielded questions about the decision to give authorities emergency powers to freeze the finances of those connected to the protests.

Data presented to the inquiry last week suggested that approximately 280 bank accounts with approximately $8 million in assets were frozen due to the emergency measures.

Freeland defended the move, saying the government wanted the protests to end peacefully and the economic measures acted as an incentive to leave the protest zones.

"I was sort of saying, 'We really have to act, something has to be done.' And I remember a colleague saying to me, 'My nightmare is blood on the face of a child.' And I remember that very clearly. Because I was worried about that," she said.

Last week, Brendan Miller — a lawyer for some of the protest organizers — argued under cross-examination that the order to freeze accounts was an act of overreach and halting fundraising on crowdfunding platforms breached Canadians' right to freedom of expression.

Several members of Prime Minister Justin Trudeau's staff are also set to testify Thursday, including his chief of staff Katie Telford. She will be joined by deputy chief of staff Brian Clow and Trudeau's director of policy John Brodhead.

The three staff members will offer a rare glimpse into the inner workings of the Prime Minister's Office and likely will face questions about the deliberations that went into the invocation of the Emergencies Act.

Trudeau will make his highly-anticipated appearance tomorrow as the commission finishes the public hearing portion of its work.
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