Federal emergency act measures will expand the powers of Canada’s banks and financial intelligence agency to monitor and stem the flow of funds to protesters who have blocked downtown Ottawa and key corridors, as the federal government escalates its efforts to end the disruptions.
Finance Minister Chrystia Freeland said on Monday that the government is broadening the scope of anti-money-laundering laws to allow the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to monitor transactions through crowdfunding platforms and other payment providers that have escaped its scrutiny.
The demonstrators have demanded an end to all pandemic restrictions, and used trucks and other vehicles to block the streets of the nation’s capital and cut off border crossings.
Banks will temporarily be allowed to freeze personal and business accounts suspected of being used to further the blockades without obtaining a court order, and without fear of being sued for doing so, Ms. Freeland said at a news conference. The measures will also allow police, government agencies and banks to share “relevant information.” That includes a requirement that banks report financial relationships with customers involved in the illegal blockades to the RCMP or the Canadian Security Intelligence Service.
These and other new powers will be permitted as the federal government invokes the Emergencies Act, temporarily granting it sweeping powers. The financial sector measures signal a desire to exert greater pressure on protesters by choking off the flow of donations that have helped prolong the blockades, and to require co-operation from banks and other large companies.
Business leaders, including former Bank of Canada governor Mark Carney, have sounded increasingly loud warnings about the economic harm the blockades are causing – to small businesses that have had to close, and to trade with the United States – and called for a solution to disperse the protesters.
“This is about following the money. This is about stopping the financing of these illegal blockades,” Ms. Freeland said. “We are today serving notice: If your truck is being used in these illegal blockades, your corporate accounts will be frozen. The insurance on your vehicle will be suspended.”
Prime Minister Justin Trudeau said at Monday’s news conference that financial institutions “will be authorized or directed” to assist in addressing the blockades by helping to regulate the flow of funds.
Public Safety Minister Marco Mendicino said in an interview that the measures empower banks and financial institutions to move “with speed and purpose without having to seek an independent court order.”
Before Monday’s announcement, Ms. Freeland arranged two calls in as many days with the chief executive officers of the country’s largest banks to discuss the new measures. The first call was held over the weekend for initial, high-level discussions with bank CEOs about how the financial sector could help, according to two banking industry sources familiar with the call. A second conference call between Ms. Freeland, deputy finance minister Michael Sabia, and the bank CEOs was scheduled for Monday evening, the sources said.
The Globe and Mail is not identifying the sources because they are not authorized to speak about communications with government.
Typically, financial institutions are strictly bound by laws and regulations that govern the flow of money between accounts and require them to monitor those transactions for illegal activity. The measures announced on Monday give them extra latitude to do that – including for funds from abroad flowing to the protests.
In recent weeks, protesters have adapted, first using crowdfunding platforms such as GoFundMe, and then, after most of those funds were withheld, collecting donations of cryptocurrency, which is difficult to trace. Ms. Freeland said the new measures are intended to “cover all forms of transactions, including digital assets such as cryptocurrencies.”
FINTRAC works to detect and prevent money laundering and the financing of terrorist activities by analyzing reports from banks, casinos, life insurance companies and other entities. Two of the main requirements are to let FINTRAC know about any financial transaction worth $10,000 or more within 24 hours, and to file reports about suspicious transactions regardless of the amount.
Crowdfunding platforms and payments providers will now also need to register with FINTRAC and report large or suspicious transfers. Although most emergency powers announced on Monday are intended to be temporary, the government plans to bring in legislation to make FINTRAC’s broader reach permanent, Ms. Freeland said.
On Monday, Toronto-Dominion Bank asked an Ontario court to take control of about $1.4-million that was donated for the protests and deposited in two personal accounts, and decide how to distribute or refund it. The money includes $1-million raised through GoFundMe that was released to a protest organizer, and $413,000 that was received from some 3,000 donors as of Feb. 10.
With a report from Robert Fife
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