OTTAWA — Finance Minister Chrystia Freeland drew a direct link between Canada’s economic and national security on Thursday, as she defended her government’s decision to declare a public order emergency to end the “Freedom Convoy” protests.
The assertion came in testimony to the Public Order Emergency Commission, where cabinet ministers have faced questions about the legal basis upon which they invoked the Emergencies Act in February to clear protesters from Ottawa and at several U.S. border crossings.
“I really do believe our security as a country is built on our economic security,” Freeland 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.”
Yet while Freeland said the Liberal government’s decision to use the Emergencies Act was correct, she repeatedly refused to detail whether the purported economic harm being done by the protests formed the basis of the government’s decision — and if so, whether it was legal.
“I’m not a lawyer,” said Freeland, who also serves as Canada’s deputy prime minister. “I rely on the judgment of officials who advised us and on expert legal advice.”
That analysis remains the key missing piece as the commission enters the final days of public hearings exploring the government’s decision to invoke the act for the first time since it became law in 1988.
The Emergencies Act specifies that a public order emergency is one arising from a threat to Canada’s security, as defined in the Canadian Security Intelligence Service Act.
That definition includes espionage or sabotage of Canada’s interests, foreign influence, acts of serious violence against people or property with political, religious or ideological objectives, or the violent overthrow of the Canadian government.
But while the clerk of the Privy Council testified last week that the government took a wider interpretation, including threats to Canada’s economic security, the federal Liberals have refused to release the legal advice that formed the basis of their decision.
Freeland testified the protests coincided with a period of fragility for the Canadian economy, with supply chain challenges, American plans to exclude Canada from electric-vehicle incentives and the looming Russian invasion of Ukraine all causing uncertainty.
Freeland said initially, she didn’t involve herself in dealing with the protests, which started on Jan. 29 when thousands of people and hundreds of trucks gathered in downtown Ottawa to protest COVID-19 vaccine mandates and pandemic restrictions.
But when protesters blocked the Ambassador Bridge in Windsor, Ont., the busiest trade route between Canada and the U.S., she said: “From a finance, economic perspective, that escalated things exponentially. That’s what made it a hugely significant economic action.”
The White House was also concerned about the bridge blockade and the director of U.S. President Joe Biden’s national economic council, Brian Deese, made it clear to Freeland that the U.S. wanted Canada to get the situation under control.
The commission was shown an email exchange between Freeland, her chief of staff and deputy minister following a Feb. 10 call from Deese, where Freeland wrote: “They are very, very, very worried.”
She added: “If this is not sorted out in the next 12 hours, all of their northeastern car plants will shut down.”
Freeland had spent a lot of time trying to convince Deese in 2021 that the U.S. needed to create an exemption for electric-vehicle incentives that initially excluded Canada, the inquiry heard.
Part of her persuasion was making the point that Canada was a reliable trading partner — a reputation that Freeland testified was challenged once protesters began blockading bridge access.
“The longer it went on, the greater threat that the U.S. would lose faith in us and our trading relationship would be irreparably damaged,” she testified. “The longer it went on, the greater the threat that foreign investors would write off Canada.”
Freeland repeatedly raised the spectre of U.S. protectionists using the convoy blockades to advance their own interests, which she said would have a profound impact on Canadians and the economy.
“They’re the people in a steel mill in Hamilton who would lose their job as that relationship fell apart, the people in an aluminum smelter in Quebec,” she said.
“For each of those people, having this all fall apart and the country’s economy profoundly undermined, that would undermine their security, and it would undermine our security as a country.”
But Freeland sidestepped questions about the lack of reference to economic harms in the Emergencies Act, saying only that she had received “assurances” about the legality of using the emergency order.
Freeland rejected suggestions Ottawa used the act to appease the White House or assuage American concerns.
The inquiry also heard that by Feb. 13, Freeland was hearing concerns from some of Canada’s banking CEOs.
A readout from a call that day shows some CEOs suggested the government list some of those involved in the protests as terrorists, which could allow banks more quickly choke their funds.
Cabinet met to discuss using the Emergencies Act the same day as the call with bankers. The special measures announced on Feb. 14 included orders giving financial institutions the ability to freeze the accounts of convoy participants.
Freeland defended the decision to freeze roughly 280 accounts totalling about $8 million, saying it was a way to end the protests without violence, by encouraging protesters to go home.
“I would have preferred not to have had to do this. But in my mind, I weigh that against what I really believe is the tens, hundreds of thousands of Canadian jobs and families that we protected.”
She also testified that as the blockades dragged on, she feared there might be violence between fed-up Canadians and protesters, and the government needed to step in.
“I felt that Canada was sort of a powder keg.”
This report by The Canadian Press was first published Nov. 24, 2022.
Stephanie Taylor and Lee Berthiaume, The Canadian Press
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
