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

Deputy Prime Minister and Finance Minister Chrystia Freeland defended her government's decision to invoke the Emergencies Act last winter, arguing economic security is linked to national security.

Several PMO staffers are also expected to testify, including Trudeau's chief of staff

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)

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.

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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."

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 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 public 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 | Freeland feared convoy protests could harm trade relations with U.S.: 

Convoy protests a ‘dangerous moment’ for Canada’s economy: Freeland

1 year ago
Duration 2:52
Deputy Prime Minister Chrystia Freeland told the Emergencies Act inquiry that last winter’s convoy protests and border blockades were damaging Canada’s reputation and posed a serious threat to the country’s economy.

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

1 year ago
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

1 year ago
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.

Office of the Prime Minister staff John Brodhead, Policy Advisor, Katie Telford, Chief of Staff and Brian Clow, Deputy Chief of Staff, appear as witnesses 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.

Three members of Trudeau's staff were 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 also spoke to commission staff before their appearance and a summary of that conversation was tabled.

"[The staff members] asked the Commission to comment on threats to the economic security of Canada, which carry with them a threat of tangible physical harm and violence," said the summary.

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


Catharine Tunney is a reporter with CBC's Parliament Hill bureau, where she covers national security and the RCMP. She worked previously for CBC in Nova Scotia. You can reach her at catharine.tunney@cbc.ca