On Monday the Canadian government invoked the Emergencies Act, an extraordinary-powers statute ordinarily associated with threats of war and terrorism, with the aim of quelling protests that have disrupted the capital, Ottawa, and temporarily closed some border crossings vital to U.S.-Canada trade, notably the Ambassador Bridge in Detroit.
The Terrorism Act authorities include extraordinary powers of financial regulation, ordinarily discussed in the context of foreign sanctions and terrorism, that allow for the government to freeze property and track and block transactions. Canadian deputy prime minister Chrystia Freeland announced Monday that “if your truck is being used in these protests, your corporate accounts will be frozen.…The insurance on your vehicle will be suspended.” Note that these steps will often harm third parties along with protest participants: think of businesses that maintain a fleet of owned vehicles one of which is driven by a protest-minded employee or family member. Forced cancellation of vehicle insurance can harm the welfare of third parties injured in collisions.
In a statement, the Canadian Civil Liberties Association says:
The federal government has not met the threshold necessary to invoke the Emergencies Act. This law creates a high and clear standard for good reason: the Act allows government to bypass ordinary democratic processes. This standard has not been met.
The Emergencies Act can only be invoked, according to its own terms, when a situation “seriously endangers the lives, health or safety of Canadians and is of such proportions or nature as to exceed the capacity or authority of a province to deal with it, ” or “seriously threatens the ability of the Government of Canada to preserve the sovereignty, security and territorial integrity of Canada” and when the situation “cannot be effectively dealt with under any other law of Canada.”
Critics note that a number of lesser, more conventional law enforcement methods had not yet been tried against the unlawful occupations in Ottawa, Windsor, and elsewhere. Some also note that the national government did not invoke the Emergencies Act during the 77-day Oka crisis in 1990, in which a blockade and occupation by a group of Mohawks caused considerable disruption and bloodshed.
As colleagues Norbert Michel and Nicholas Anthony of Cato’s Center for Monetary and Financial Alternatives noted in their post yesterday, Canada’s federal government has also ordered that “all crowdfunding and payment services providers must register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).” Freeland has elaborated on what this will mean: “In invoking the Emergencies Act, we are … broadening the scope of Canada’s anti‐money laundering and terrorist financing rules so that they cover crowdfunding platforms and the payments service providers they use. These changes cover all forms of transactions––including digital assets such as cryptocurrencies… As of today, a bank or other financial service provider will be able to immediately freeze or suspend an account without a court order.”
I’ve been a critic of the Ottawa disruptions, which — like certain freeway blocking, downtown-closing protest actions that come to mind in the U.S. — have upended the lives of unoffending third parties and blocked them from being able to get to their homes, businesses, and places of work. Having grown up in Detroit, I’m well aware of how destructive it is to the well-being of millions to obstruct the Ambassador Bridge.
That said, Monday’s edicts underscore how dangerous it is to arm government with the kind of financial and emergency powers that can bypass due process, bring targets to their knees through economic incapacitation without trial, and shred privacy. I second Norbert Michel and Nicholas Anthony’s comments yesterday: “Many Americans may not realize it, but the same principles that make this attack on Canadians’ financial freedom possible are engrained in U.S. law. …Whether people realize it or not, this sort of event could just as easily occur in the United States. In fact, it’s a prime example of why Americans need stronger financial privacy rights.”
I would add that the news lends new appeal to a perennial libertarian cause, that of limiting the scope of emergency powers that governments gather to themselves, often with the excuse of anticipating security threats. You can read and listen to more about that issue in Cato events like this and from Cato people like Gene Healy, Patrick Eddington, and William Yeatman.
