Michael Sabia

Michael Sabia spoke 226 times across 1 day of testimony.

  1. Michael Sabia, Deputy Minister (GC-FIN)

    Bible's good.


  2. Michael Sabia, Deputy Minister (GC-FIN)

    Michael Sabia, M-I-C-H-A-E-L S-A-B-I-A.


  3. Michael Sabia, Deputy Minister (GC-FIN)

    Yes, I can.


  4. Michael Sabia, Deputy Minister (GC-FIN)

    In my case, yes.


  5. Michael Sabia, Deputy Minister (GC-FIN)

    I'm the -- Commissioner, I'm the Deputy Minister of Finance. So I'm the most senior non-elected official in the Department. And we all work, and I report directly to the Deputy Prime Minister and the Minister of Finance Chrystia Freeland. Do you want me to talk about what the Department does?


  6. Michael Sabia, Deputy Minister (GC-FIN)

    Well, how I oversee those activities is the interesting question, but the... So we're -- I guess it would be fair to say we're the government department that's charged with the oversight, stewardship if you will, the oversight of the Canadian economy. That has several dimensions in our work. So we're responsible for tax and fiscal policy on behalf of the Government of Canada. For -- we're responsible for the financial and fiscal dimension of federal/provincial relations. We're responsible for international economic policy, especially related to trade and some other things. We're responsible for the spending side of economic development and social policy of, again, across the government. And my two colleagues, who will introduce themselves, we're also responsible for economic analysis and economic forecasting on behalf of the Government of Canada. That's what Rhys Mendes on my left is responsible for. And then on my right, another dimension of our work is our responsibility for policy with respect to the financial sector in Canada, and Isabelle Jacques is the Assistant Deputy Minister responsible for that.


  7. Michael Sabia, Deputy Minister (GC-FIN)

    We, as a standard practice, review on a real-time basis, events that we believe that are occurring that can have a meaningful impact on the Canadian economy. That's a core part of what Rhys's group does. So this issue came on our radar screen, I would say, sort of late January as events were unfolding and there were the beginnings of blockades at the Canada/U.S. border. So let me just back up a little bit from that and explain why this became such a focus of concern on our part. There are two, I think, quite important things playing out in the background here. First, as you'll recall, at the time, there was a great deal of speculation, and indeed in retrospect, Russia's invasion of Ukraine was imminent, and that was something that we were very focussed on and very concerned about the economic consequences that that would have globally and the therefore spillover consequences that that would have for Canada. And then second, because it was late January and February in the usual budget cycle, we were fully engaged in the preparation of what became the April '22 budget of the Government of Canada. And as you know, budget making is a lot about understanding what the next period of time looked like for the Canadian economy. And this is, I think, important in understanding the origins of our concerns. So if you'll recall, January/February of '22, our economy was just exiting from all of the COVID lockdowns. And we were very concerned about the extent of that recovery, the pace of that recovery, how fast we would recoup lost output, how fast we would recoup lost jobs, because really, throughout the COVID crisis, one of the government's objectives had been to minimize any economic scarring, longer term scarring that would be the result of the COVID crisis. So that, given our focus on economic recovery and the pace of recovery, there were two or three things in the environment that we were especially concerned about. These are not necessarily new things. One, as everyone knows now, the extent of the damage to supply chains and the impact that that would have on the pace of recovery. Relatedly, the, at the time, incipient issue of inflation, something that was partly the result of the supply chains, but also, it likely would flow from events in Ukraine because of the sanctions, et cetera that would follow, and the impact on the energy markets, and how that would also flow through into inflation. So supply chain was an issue, inflation was an issue, and then third, so was the level of business investment, which is a chronic issue for Canada. So all of these things, and business investment, as you know, Commissioner, they -- business investment is very much something influenced by business confidence. So you take together all of these factors, and then these disruptions come along, and they obviously contribute to the extent of the concern that we have because the Canadian economy, in our view at the time, was at a very, very fragile moment. So that was one set of concerns and very significant concerns on our part and on the part of the government. Relatedly, particularly to the issue of business investment, playing again in the background of all of this activity was pretty big changes in what was going on in trading patterns in the world. Now, that sounds like an abstract idea, but it's actually not because the Americans at the time, with Build Back Better, with the rejigging of their own supply chains, of the tendency within the United States to want to have more resilience of supply chains, many of them anchored in the United States itself, that represented a very, very major challenge to Canada because of the degree of integration of our economy with the United States. Seventy-five (75) percent of our exports go into that market. So as a result of that, and we were doing work with the Americans at the time, for instance, with respect to the treatment of electric vehicles, something that was critical to the future of the automotive industry in Canada, there was a tendency in the United States to want to treat that as an America only issue. And then again, these disruptions come along and raise issues in the eyes of the United States and in the eyes of the U.S. administration, raise issues around the reliability of Canada as a trading partner. Significant issues. To the point where issues -- you know, I'm sure we'll end up discussing this -- where issues that rose to the level of President Biden and our Prime Minister in bilateral conversations. So these were very meaning -- very meaningful issues that arose in the Canada/U.S. relationship. So that too very much entered into our thinking here that if these border disruptions that we were experiencing at the time, if they were to continue for a period of time and became a more -- an even more significant threat to the American perception of Canada as a reliable trading partner, that that was something with very severe long-term consequences, not just for the Canadian automotive industry but for a whole range of industries that we export into the United States, but the automotive industry was the centre piece, at least at that time. So that was the backdrop of why this was on our radar screen and how it became increasingly important on our radar screen going forward.


  8. Michael Sabia, Deputy Minister (GC-FIN)

    So now I don't feel so bad about having talked so long.


  9. Michael Sabia, Deputy Minister (GC-FIN)

    No, I think for now that's probably all right. I mean, I think that sets the scene of why this was an issue for us. It had meaningful macroeconomic consequences for us in the near term, particularly given this point I’ve made about just the sensitivity, the specific moment we were at, from an economic point of view. I mean, this was a very, very delicate time, coming out of COVID. And I think, in retrospect, we’ve seen all that now; we’ve seen how it was easy to shut down an economy but very difficult to open it up again. And we were in the process of opening up the economy, as every other country in the world was, at this -- for pretty well, at the same time. So that was -- you know, it was a very, very sensitive, delicate moment, from our point of view. And then this broader issue with the United States. I mean, we were -- there was, you know -- the Governor of Michigan, was very active and very critical of what was happening; there were multiple comments in the public media from Members of Congress, from Michigan, and other states. There was concern within the American federal government within the White House, about this issue, hence my reference to a conversation between the Prime Minister and President Biden about this. I mean, this was -- you know, this was not -- how can I put this? This was not a second-tier issue in the Canada- US relationship; this was a first-tier issue. And, you know, we were subsequently able to negotiate an arrangement with the Americans on electric vehicles, but there was no doubt that this -- these disruptions coming when they did in that process brought with them the risk that we would not be able to get the North American treatment that we were eventually able to negotiate with the Americans with respect to electric vehicles. And as I said, electric vehicles are the future of the automotive industry. So if we had not succeeded in doing that, then the particular consequences of that for the central Canadian-based automotive industry would’ve been, you know, very, very serious. So I think probably I’ll leave it there.


  10. Michael Sabia, Deputy Minister (GC-FIN)

    I would like to say it’s nice to see you and be there again, but that would be playing fast and loose with the truth.


  11. Michael Sabia, Deputy Minister (GC-FIN)

    Here we are. Here we are.


  12. Michael Sabia, Deputy Minister (GC-FIN)



  13. Michael Sabia, Deputy Minister (GC-FIN)

    Now I need some guidance, Cabinet confidences and stuff.


  14. Michael Sabia, Deputy Minister (GC-FIN)

    Yes, she did.


  15. Michael Sabia, Deputy Minister (GC-FIN)

    Yes, she did.


  16. Michael Sabia, Deputy Minister (GC-FIN)

    Can I ---


  17. Michael Sabia, Deputy Minister (GC-FIN)

    Is it okay if I ---


  18. Michael Sabia, Deputy Minister (GC-FIN)

    So just to build on what Rhys just said, just to elaborate a little bit on Rhys’ last sentence, given how time sensitive the supply chains are in the automotive industry and how integrative production is, I mean, I think it’s -- parts -- a car being assembled, actually the parts cross the border between Canada and the United States six different times in the process of producing a car. So there’s a high degree of integration here. And you add to that the just in time delivery of Rhys’ point that Rhys made. So we were seeing, at the time, I mean, this was having real world impacts. In Canada, on the Canadian side of the border, Ford, GM, Toyota, Stellantis, and Honda were either reducing shifts or in fact had shut down some plants because parts were no longer available. And then on the U.S. side, they were experiencing the same thing because of that integration. So Ford, GM, Stellantis, and Toyota in the United States were again either shut down or had substantially reduced shifts, which obviously has a pretty significant impact on not just the companies, but on workers. So that was actually -- that was happening at the time. I mean, this was not something that was going to happen. These plants were being affected in real time.


  19. Michael Sabia, Deputy Minister (GC-FIN)

    Can I just...?


  20. Michael Sabia, Deputy Minister (GC-FIN)

    Again, I just want to draw this out because I think in the subsequent discussion, this point, I think, is important, and it’s got to do with, a short disruption is one thing. As Rhys has said, a longer term one is a completely different story, and that is what led us, within the department, to be so focused on this question about finding measures that could be delivered with speed, because the objective was to try to keep the disruptions to as short a period of time as possible, for two reasons. First, if shorter, based on Rhys’s analysis, then the macroeconomic effects of them are -- other things being equal, are more likely to be relatively more modest. But second, and really important, if they were to continue, then on this other point that I made earlier about the impact on the Canada/US trading relationship and the longer-term consequences of the Americans reassessing Canada’s reliability as a trading partner, that if we could keep things short, the damage to that overall relationship is something that we would probably be able to manage our way through. If, on the other hand, the disruptions continued for a period of time, then a core concern we had was that that could have at a time when the Americans were reassessing their trading relationships with the world, and certainly with us, that that could have a very significant and durable negative impact on Canada’s economic prospect. So this issue about trying to move quickly to keep the disruptions to a relatively finite and short period of time, this is something that was -- it was just right at the core of all of our thinking within the department.


  21. Michael Sabia, Deputy Minister (GC-FIN)



  22. Michael Sabia, Deputy Minister (GC-FIN)

    Right. That’s correct.


  23. Michael Sabia, Deputy Minister (GC-FIN)



  24. Michael Sabia, Deputy Minister (GC-FIN)

    And that’s something -- Rhys may want to elaborate on this but the way the Bloomberg piece got done, it established a set of numbers, and it conveyed that if it went on for X-number of weeks, you would just add up that number; it was, like, .1 or .2 for each week. And I think that’s what the Minister, given hat this is based on Bloomberg, that that’s what the Minister is commenting on here. Our thinking, and eventually in a further discussion with the Minister, was that actually while Bloomberg may have got some things right, what we think that they did not get right was that the impact grows over time. So for every unit of time, you get more impact than just if you’re able to contain the disruptions to whatever; a week, two weeks, whatever, but a very short period of time. That’s one thing. But as it goes on and the indirect effects spill over into other sectors, you get more disruptions of supply chains, then that number will tend to grow over time as you go through it week by week. So, again, coming back to this point I made earlier, sort of time is everything here.


  25. Michael Sabia, Deputy Minister (GC-FIN)

    If you can contain it, that’s one thing. If you can’t and it gets bigger and bigger, then you’re facing bigger and bigger economic flow.


  26. Michael Sabia, Deputy Minister (GC-FIN)

    If I could?


  27. Michael Sabia, Deputy Minister (GC-FIN)

    When I look at that, and indeed, when that analysis surfaced, I hope you'll understand what I mean when I say this, but that analysis says to me success. Success in that the disruptions, at least at that point, it seemed as though they -- we had succeeded, the government had succeeded in keeping those disruptions at -- within a relatively short period of time. So the fact that almost ex post Rhys and his folks could do that analysis and say, "Well, we pretty much know what the duration is; therefore, we have a pretty good idea of this", that said to us that, well, as I said, that's pretty much success, given the disruptions that we faced earlier on and the decisions that needed to be made when the duration of the disruption was still an open question. The fact that we were able to do this ex post said to us, you know, in a way, success or mission accomplished.


  28. Michael Sabia, Deputy Minister (GC-FIN)

    (Inaudible response)


  29. Michael Sabia, Deputy Minister (GC-FIN)

    Well, look, I think that's just another way of -- Rhys may want to elaborate on the point because there's an analytical point here. But I mean, that's consistent with the point I made earlier about the strength of the reaction that was being reported in the public media from U.S. lawmakers at a time when they were attempting to pass legislation that could have a pretty significant impact on the re-engineering of their supply chains to repatriate. I mean, you'll recall, I mean, this issue is still very much, you know, in front of us today, that as we move to a different structure of global trade than we have had for the last 25 or 30, 40 years, all of these issues about sourcing and structure of supply chains, these are all -- they've all become open questions. So you know, the concern that we had here was, again, that this is in the world of confidence and perception, if American companies or the American government began to think that they could not count on us as a reliable source of supply, then they probably would shift production. And if they were to shift production, that would have a, obviously, pretty significant, very, not pretty, a very significant impact on, well, both the level of GDP and the growth rate of GDP. But do you want to...


  30. Michael Sabia, Deputy Minister (GC-FIN)

    Sure. Let me start, and then Isabelle, you may want to add. So look, as the disruptions, on the one hand, continued to materialize, and in some cases intensify, and the disruptions in Ottawa continued on, there was a general sense across the government and, you know, an interest that was expressed to have every department trying to think about are there ways in which we can develop ideas that would help bring to an end, in a good way, this very difficult situation. So there was a general interest in developing ideas, which obviously included us, but beyond that, the sort of general interest, there were a couple of other things in our minds motivating our work to try to find things that could contribute to a solution. On the one hand, I won’t belabour this again, because, you know, with the previous conversation and Rhys’ comments, I think the extent of our concern with respect to the economic issues is pretty straight forward, pretty clear. And this intense focus we had on are there things that can help end this quickly? Because as Rhys and I have tried to explain, duration is everything here in terms of its disruptive impact on the Canadian economy. So quite aside, or in addition to the general interest in various departments, can they develop ideas that can be helpful here, we wanted to, given our responsibilities for the Canadian economy, we wanted to find ways, and that was a significant motivator. The other one was we are also, given our responsibilities for the financial sector, we also take seriously our responsibility to ensure the integrity of Canada’s financial system. And Canada’s financial system being used for these kinds of purposes is not consistent, in our view, with maintaining the integrity of the financial system. So it was both our response to a general request for ideas, but within the department, it was what can we do to shorten the duration of these disruptions, given their economic consequences, and then finally, this concern that we take very seriously about the integrity of Canada’s financial system and that we safeguard that integrity all of the time. So those three factors led us to start some work on what can we do, given the legislation that we’re responsible for. So we began thinking about are there ways in which we could use the Bank Act or other pieces of legislation really centred pretty heavily on the Bank Act, also the Money Laundering and Terrorist, the ---


  31. Michael Sabia, Deputy Minister (GC-FIN)



  32. Michael Sabia, Deputy Minister (GC-FIN)

    That’s -- that’s -- she’s got it. Those two pieces of legislation. So we started thinking about, “Well, is there something constructive that could be done through FINTRAC?” Which is the agency responsible for Proceeds of Crime (Money Laundering) and Terrorist Financing -- or terrorist activity. Could we do something there? And could we do something using the Minister’s authority for the Bank Act? And then to make a long story short, in the media, it was widely publicized, and it was very public, that crowdsourcing platforms were being used as a source of financing for these activities. Similarly, payment processors. And neither of those were within the regulatory perimeter of FINTRAC. So one thought process was, “Well, is there something we can do around that?” And then the second, with respect to the Bank Act, is, is there some way that we can use the Bank Act to have -- to give banks the capability to freeze bank accounts if, in their judgement, those bank accounts are being used for an inappropriate purpose? Now, again, just high-level summary here, there were a series of issues with that. One, we couldn’t do anything outside of federal jurisdiction, because the Bank Act only applies to federally regulated financial institutions. But there’s a whole wrath of financial institutions in Canada that are not federally regulated, particularly, say, credit unions, types of insurance companies, et cetera. So because we couldn’t do anything outside of federal jurisdiction, that really made pretty academic whether we could or could not do anything in federal jurisdiction, because money is fungible and it can just move from institution to another. So if we couldn’t do something that was more comprehensive, that was a pretty significant limitation on what could be accomplished. There was also a fairness issue there. I’ll give you an example. In Quebec, Banque Nationale, that’s a federally regulated institution, but Desjardins is not. And Desjardins, anyone who lives in Quebec knows that Desjardins and Banque Nationale compete pretty intensively between the two organizations. So to treat one one way and the other another way, that seemed to us to be -- you know, that’s just one example, but that seemed to us to be a pretty big problem. So that was one piece. The second piece, coming back to something earlier that I said, was whatever we could do, we wanted to do quickly, because doing it quickly meant shortening duration, and shortening duration meant avoiding the worst economic consequences that we were concerned about. But of course, pretty much anything that we could do would require a legislative change, and legislative changes, by their nature, take an extended period of time. So if our thinking process was how do we manage duration here of the disruptions, anytime we bumped into something that required a legislative change is something that was, by its nature, less attractive because we couldn’t do it quickly, and by not being able to do it quickly, it didn’t really deliver what we needed, which was relatively speedy action to shorten the duration of these disruptions.


  33. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, that's about right. February 8 or 9, yes ---


  34. Michael Sabia, Deputy Minister (GC-FIN)

    --- that's about. If it makes you feel any better, it drives me crazy too.


  35. Michael Sabia, Deputy Minister (GC-FIN)



  36. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, that -- that started, I don't recall the exact dates, but sometime in the week of this memo, I think a little bit earlier. I had some -- I mean, as the principal regulator, OSFI and ourselves, in terms of financial -- higher-level financial policy, we have a lot of contact with the Canadian banks, Canadian financial institutions in general. So I am, as is Isabelle and her team, we are in regular contact with Canadian financial institutions pretty much of all kinds, A, because of our role in that sector; and B, because they're a very good way of listening and understanding more about what's going on in the Canadian economy than any one point. So I had some conversations, particularly with bank CEOs, during that week to get their sense of what was happening and reaction to these disruptions, and in those conversations, we were talking about that, the general -- their general take on these events and what they thought the government should or shouldn't be doing about it. And then second, general conversations around what could be done. In those early days, I did not raise the specifics of these options which would have been inappropriate at the time. We were not at that point, and we had not had a conversation with our Minister about it. So these specifics in those early conversations were not really on the table. Then a little bit later, I think toward the end of that, we have to check these dates, but toward the end of that week, the -- I started having conversations, collective conversations with all of the bank CEOs, and the Minister eventually joined me in some of those conversations.


  37. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah. Well, we need to be careful here. Prior to the possibility or likelihood that the government would invoke the Emergencies Act, that was a very important dividing line here. So prior to that, in the week that we're talking about here, my conversations there would have been much more general and much more general -- much more focussed on, you know, what are they hearing from companies, what are they hearing from investors, how do they gauge the situation? It was much more our trying to understand by talking to other people whether or not our perception of the situation was aligned with how other people were perceiving it. I would say there was very much alignment around the concerns that Rhys and I have talked about earlier, and what we were hearing from institutions that basically spanned the Canadian economy and are constantly in touch with clients, and their clients are businesses and individuals across the Canadian economy, so they're good listening posts. So that was prior to the possibility of the Emergencies Act. Because as per this memo, as you can see, the conclusions that we were coming up to, they were arriving at, were conclusions that actually there wasn't really, other than through FINTRAC and that side, there really wasn't a lot that we could do in the near term without passing legislation, which as I said, would take a considerable period of time. Now, as the possibility or likelihood of the Emergencies Act being invoked, then that changed the nature of those conversations. And through I think that weekend, I forget -- the dates would have been sort of the 12th, 13th, or something of -- you have to check -- you'll have to doublecheck the dates, but you know, 11, 12, 13, somewhere in there, we then began to have conversations about in the event that the government were to decide to move down this path, because it hadn't been decided yet, how could this be done. And I would say that the reaction that we got to those initial conversations was pretty much, you know, consistent with what I had heard in the earlier conversations, which is, you know, to shorten what were long conversations that, you know, this is a serious issue and a threat to Canada's economy, what can we do to help. So there was an openness on the part of the bank CEOs to working with us to try to find solutions that would bring a peaceful end to what was a difficult circumstance. So in those conversations, we did talk about, you know, how could this work? What would you do? What would be feasible for you? Because we wanted to learn as much as we could about the actual operation of this from the people who actually operate in the day-to-day financial system of the country. So that was the nature of those conversations. And then as the weekend and time progressed and it became more apparent of the possibility that the government would move in this direction, then Minister Freeland joined me for one or two of those calls, where at that point, we were saying, okay, well, if we're going to go down this path, you know, our expectation would be for you to be able to do A, B and C. Are those feasible things? How would you do that?


  38. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, I think the less, I think, statement to the obvious, the less discretion that they had, or in other words, the less onus you were putting on the financial institutions, you know, from their perspective, the easier for them.


  39. Michael Sabia, Deputy Minister (GC-FIN)

    I think a better word for how we were thinking about this is to create a set of incentives to bring a peaceful end to these disruptions.


  40. Michael Sabia, Deputy Minister (GC-FIN)

    I think it’s a -- again, a statement of the obvious; ---


  41. Michael Sabia, Deputy Minister (GC-FIN)

    --- a peaceful end to almost anything ---


  42. Michael Sabia, Deputy Minister (GC-FIN)

    --- is a better than a non- peaceful end. And that’s very much what we were focused on here, was to create, as I’ve said, a set of incentives for, the point having been made -- I mean, people have every right to protest; that’s an important part of our democratic system. And there were no easy answers here. But finding instruments that create an environment where people have an incentive to go home having made their point, that seems to us to be a path worth pursuing.


  43. Michael Sabia, Deputy Minister (GC-FIN)

    Well I think, you know, if you -- from what I understand, the testimony that this Commission’s been hearing from law enforcement and I think from Supt. Beaudin as well, I think there’s a pretty wide acknowledgement that these financial measures did help law enforcement to being an end to these in as peaceful a way as they possibly could. And I think law enforcement has been pretty consistent on acknowledging the positive contribution that these measures have made. And if I can, I’d just like to go back to your previous set of questions?


  44. Michael Sabia, Deputy Minister (GC-FIN)

    I mean, I will admit to being a little puzzled about your point. So in my mind, this is actually pretty straight forward. Now, you know, I didn’t go to law school, so maybe I’m missing something.


  45. Michael Sabia, Deputy Minister (GC-FIN)

    Well my daughter is finishing law school. So I don’t know. I’m of two minds about whether this is a good thing or a bad thing. In any event. So what did we do? At the Department of Finance, we basically set policies. So we set a policy that said under the authority of the Emergencies Act, the Emergencies Act having already declared certain activities illegal, we set a policy that said the financial system, bank accounts, other types of accounts, should not be used in support of what was then declared illegal activity. Point 1. Point 2, we -- the way the system worked, which seemed to us to be pretty logical, which is the RCMP working with other areas of law enforcement, the people on the ground who had the information were then providing that information to a set of financial institutions who had their own processes, which they use every day for other types of fraud and other things, as Isabelle has mentioned, and they put those two things together. So that seemed, to me, to be a pretty good outcome, in that the people who had the microscopic information or the micro information of who was doing what was feeding that into financial institutions and financial institutions were using that as a positive input into the decision making that they were going to have to do. And then empirically, I mean, I think of the 280 accounts that ended up being frozen. You might want to check my numbers, but something like 256 or 257 of them came from the RCMP. So obviously there’s a pretty high correlation there. Doesn’t mean that the banks didn’t do some additional things, because obviously there’s a difference between 257 and 280. But yes, your point being that the RCMP’s work, based on in the field, understanding of who was doing what, had a significant bearing on what the banks did. So that seems to me to be pretty reasonable -- in terms of implementing a policy, a pretty reasonable set of ways of going about doing it.


  46. Michael Sabia, Deputy Minister (GC-FIN)

    We set ---


  47. Michael Sabia, Deputy Minister (GC-FIN)

    --- a policy.


  48. Michael Sabia, Deputy Minister (GC-FIN)

    We set a policy. And we are accountable for that policy.


  49. Michael Sabia, Deputy Minister (GC-FIN)

    One thing I should clarify, when I say “we”, I mean the Department of Finance, we’re not -- I mean, we as in the government.


  50. Michael Sabia, Deputy Minister (GC-FIN)



  51. Michael Sabia, Deputy Minister (GC-FIN)

    All I can say in reaction to your question is that there -- the responsible agencies were watchful on that point, and it was not an area ---


  52. Michael Sabia, Deputy Minister (GC-FIN)

    --- where ---


  53. Michael Sabia, Deputy Minister (GC-FIN)

    --- we had any expertise.


  54. Michael Sabia, Deputy Minister (GC-FIN)

    We had no information one way or the other on that issue.


  55. Michael Sabia, Deputy Minister (GC-FIN)

    I said we had no information one way or the other on that.


  56. Michael Sabia, Deputy Minister (GC-FIN)

    Well, I'm not going to give you a yes or no answer because my answer is that we didn't have information on that one way or the other. It's just not an issue that we were involved in, cognizant of, et cetera.


  57. Michael Sabia, Deputy Minister (GC-FIN)

    Well, no, I can't because I don't have enough information to enable me to. What -- I mean, at the time, we are not -- and it's quite appropriate, we are not privy to information that FINTRAC has. That information -- FINTRAC, as you know, is an agency that is all about intelligence gathering, detection, et cetera. It's not about enforcing.


  58. Michael Sabia, Deputy Minister (GC-FIN)

    And so that information -- just hang on one sec. That that information goes directly -- in the case of suspicious transactions or concerns about money laundering, whatever, that information goes directly from the leadership of FINTRAC to law enforcement authorities. It never comes our way.


  59. Michael Sabia, Deputy Minister (GC-FIN)

    I was not informed of anything with respect to money laundering one way or the other.


  60. Michael Sabia, Deputy Minister (GC-FIN)

    No, it did. Maybe I'm misunderstanding your question, but it did in that -- through that process, it confirmed that we needed to adjust the regulatory perimeter of FINTRAC to include crowd-funding platforms and payment processors. So we did do that on a temporary basis under the authority of the Emergencies Act, and we applied it only to -- in that Act, only to crowd funding and payment processors ---


  61. Michael Sabia, Deputy Minister (GC-FIN)

    --- who had information ---


  62. Michael Sabia, Deputy Minister (GC-FIN)

    --- with these elicit activities.


  63. Michael Sabia, Deputy Minister (GC-FIN)

    Then we made it longer term.


  64. Michael Sabia, Deputy Minister (GC-FIN)

    The crowd-funding platforms and payment processors were not subject to review by FINTRAC. Yes, that's ---


  65. Michael Sabia, Deputy Minister (GC-FIN)

    --- that's accurate.


  66. Michael Sabia, Deputy Minister (GC-FIN)

    I can't answer that question because I'm not expert enough in FINTRAC's legislation.


  67. Michael Sabia, Deputy Minister (GC-FIN)



  68. Michael Sabia, Deputy Minister (GC-FIN)

    I guess that's one, yes.


  69. Michael Sabia, Deputy Minister (GC-FIN)

    So ---


  70. Michael Sabia, Deputy Minister (GC-FIN)

    I'm sure that's probably true.


  71. Michael Sabia, Deputy Minister (GC-FIN)

    Well, I'm not going to answer your question in my capacity as the Deputy Minister of Finance. I guess I'm going to answer your question in my capacity as a citizen. And I guess my answer as a citizen is, yeah, that sounds like it makes sense to me.


  72. Michael Sabia, Deputy Minister (GC-FIN)

    Well, I guess, you know, as you know well, GoFundMe ended up, in effect, refusing to continue to provide its platform for these funding activities, so ---


  73. Michael Sabia, Deputy Minister (GC-FIN)

    --- crowds -- so GoFundMe obviously came to some conclusions about what was underway here that caused them to be uncomfortable enough that they wanted to ---


  74. Michael Sabia, Deputy Minister (GC-FIN)

    --- restrict this from their platform.


  75. Michael Sabia, Deputy Minister (GC-FIN)

    Well, it was set up to support the fundraising activities of the people who were protesting both in Ottawa and I guess across the country.


  76. Michael Sabia, Deputy Minister (GC-FIN)

    Well, they were about a political issue, yeah.


  77. Michael Sabia, Deputy Minister (GC-FIN)

    I think it's asking for donations to support somebody's particular view about a public issue.


  78. Michael Sabia, Deputy Minister (GC-FIN)

    Well, I'm not going to judge whether it is or not. It's a public policy issue that people have a right, perfect right ---


  79. Michael Sabia, Deputy Minister (GC-FIN)

    --- to agree with or disagree with, and I guess this group of people were out using a crowd- funding platform as a source of raising money for it. Obviously, it ended up being pretty problematic because crowd -- GoFundMe walked away.


  80. Michael Sabia, Deputy Minister (GC-FIN)

    I don't know what the numbers are, how many people donated.


  81. Michael Sabia, Deputy Minister (GC-FIN)

    I can't speculate as to why people made those donations or not.


  82. Michael Sabia, Deputy Minister (GC-FIN)

    I don't have any access to that information.


  83. Michael Sabia, Deputy Minister (GC-FIN)

    I do not -- I did not know that at the time, no.


  84. Michael Sabia, Deputy Minister (GC-FIN)

    I'm aware that the Charter protects the right to free expression.


  85. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah. I'm a -- like, the issue here, at least in my opinion, is not about donations, because nobody acted. Even in the context of the Emergencies Act, no one -- I mean, the RCMP was I think quite clear and publicly clear that their intention here was not to take action on people who had made –- in most cases, I think relatively modest donations. So the -- there really wasn't action here, as best I can detect, action here with respect to the activity of making donations.


  86. Michael Sabia, Deputy Minister (GC-FIN)

    Well, I guess that would be the donor's expectation.


  87. Michael Sabia, Deputy Minister (GC-FIN)

    Whether or not it happened or not ---


  88. Michael Sabia, Deputy Minister (GC-FIN)

    --- is something that I can't comment on because I don't know.


  89. Michael Sabia, Deputy Minister (GC-FIN)

    Look, the Government took a decision that these activities were illegal.


  90. Michael Sabia, Deputy Minister (GC-FIN)

    I have absolutely no awareness of that, nor is it relevant to our work in the Department of Finance.


  91. Michael Sabia, Deputy Minister (GC-FIN)

    No, I did not say it was relevant ---


  92. Michael Sabia, Deputy Minister (GC-FIN)

    --- to our work in the Department of Finance.


  93. Michael Sabia, Deputy Minister (GC-FIN)

    I did not say that.


  94. Michael Sabia, Deputy Minister (GC-FIN)

    They're not Federal Government entities.


  95. Michael Sabia, Deputy Minister (GC-FIN)

    And they don't have anything to do with our job in the Department of Finance.


  96. Michael Sabia, Deputy Minister (GC-FIN)

    I guess so, if I go back to civics class. Yeah, I guess.


  97. Michael Sabia, Deputy Minister (GC-FIN)

    It was a long time ago in my case.


  98. Michael Sabia, Deputy Minister (GC-FIN)

    Just so that I understand what you just said, that...


  99. Michael Sabia, Deputy Minister (GC-FIN)

    Well, yes, I think so. I think it's -- yeah.


  100. Michael Sabia, Deputy Minister (GC-FIN)

    Look, all I can do is comment on this from the perspective of, A, the Department of Finance; and B, the Federal Government. And the Federal Government, in the Emergencies Act, declared that these activities were illegal. As with -- as to your point about ---


  101. Michael Sabia, Deputy Minister (GC-FIN)

    --- GoFundMe ---


  102. Michael Sabia, Deputy Minister (GC-FIN)

    --- GoFundMe took an independent decision that had absolutely to do with ---


  103. Michael Sabia, Deputy Minister (GC-FIN)

    --- government activities.


  104. Michael Sabia, Deputy Minister (GC-FIN)

    Look, you're asking me questions that we in the Department of Finance have absolutely nothing to do with.


  105. Michael Sabia, Deputy Minister (GC-FIN)

    If you want to ask me questions about our role in Finance, that's fair enough, but these questions are -- they're not what we do.


  106. Michael Sabia, Deputy Minister (GC-FIN)

    Of course.


  107. Michael Sabia, Deputy Minister (GC-FIN)

    Well, with respect to the -- broadly understood the operation of the economy and other things, yeah.


  108. Michael Sabia, Deputy Minister (GC-FIN)

    But we're not a public safety institution, we're not an institution that is responsible for law enforcement in any other -- in any way. There are lots of other agencies of the Government of Canada that are responsible for those things and are responsible for the interactions that you're ---


  109. Michael Sabia, Deputy Minister (GC-FIN)

    --- drawing attention to, but it's not the Department of Finance.


  110. Michael Sabia, Deputy Minister (GC-FIN)

    I think the answer to that's pretty straightforward. There was a very substantial preoccupation on the part of the Government with respect to the economic consequences of the disruptions that were occurring in the country. And our role at the time, we were people doing quite a bit of work on that issue, and that was extremely relevant to ---


  111. Michael Sabia, Deputy Minister (GC-FIN)

    --- the decision-making that was underway ---


  112. Michael Sabia, Deputy Minister (GC-FIN)

    --- across the Government of Canada at the time.


  113. Michael Sabia, Deputy Minister (GC-FIN)

    Look, I don't know whether you were in the room this morning or not, but I thought we had a pretty thorough discussion of that with Commission's counsel.


  114. Michael Sabia, Deputy Minister (GC-FIN)

    No, I didn't ask you a question.


  115. Michael Sabia, Deputy Minister (GC-FIN)

    No, what I -- what we said, I think what both Isabelle and I said earlier was in the circumstance where our concern was limiting the duration of these disruptions as much as possible, that the legislative process was something that took a considerable amount of time, and therefore, was not really a very effective instrument for dealing with a situation where time was a significant impact, was a significant determinant of the extent of its impact on the national economy.


  116. Michael Sabia, Deputy Minister (GC-FIN)

    Look, I think the Government took a decision as the duly elected Government of the country to invoke a -- the Emergencies Act, which is itself a piece of legislation that was through Parliament, and the Government took a decision to use that in this circumstance, and has been, I believe, scrupulous in how it was used, kept the duration of the Emergencies Act to an absolute minimum, I mean, it was what, seven, eight days maximum ---


  117. Michael Sabia, Deputy Minister (GC-FIN)

    --- for the whole thing. So I think the Government has proceeded in a manner completely consistent with the laws of Canada.


  118. Michael Sabia, Deputy Minister (GC-FIN)

    Yes, but the Emergencies Act had to be -- there was a parliamentary process that followed the Government’s invocation of the Emergencies Act in a manner consistent with the laws of Canada, and that was done.


  119. Michael Sabia, Deputy Minister (GC-FIN)

    I’m not going to comment on that. It’s ---


  120. Michael Sabia, Deputy Minister (GC-FIN)

    Yes, I think so.


  121. Michael Sabia, Deputy Minister (GC-FIN)

    No. What this is, is just a summary of possible approaches that could be used. These are not, and shouldn’t be construed as recommendations to the Minister in any way. And the description that you see in the second paragraph is really about, well, if one were to go down the path of moral suasion, here’s the kind of thing that it would involve.


  122. Michael Sabia, Deputy Minister (GC-FIN)



  123. Michael Sabia, Deputy Minister (GC-FIN)

    The Emergencies Act did. That’s my understanding.


  124. Michael Sabia, Deputy Minister (GC-FIN)

    Freezes an account, ---


  125. Michael Sabia, Deputy Minister (GC-FIN)

    --- not necessarily ---


  126. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah. Yeah.


  127. Michael Sabia, Deputy Minister (GC-FIN)

    I don’t recall. I may -- I honestly don’t recall that. But I mean I think that’s true.


  128. Michael Sabia, Deputy Minister (GC-FIN)

    I think that’s true that they were captured, but nothing ---


  129. Michael Sabia, Deputy Minister (GC-FIN)

    February 15th.


  130. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, now this is an important point because it goes to what we were trying to accomplish here. So that created the possibility that that could occur. In reality, in actuality it never occurred, but it did have a helpful incentive effect, to use that word again, with respect to wanting to find a peaceful solution to these disruptions. So the RCMP's approach to this was, I think, completely appropriate. The risk to the truck owner was there, but action was not taken because if action -- if the action had actually been taken it could have, in certain circumstances, impeded the movement of the truck, which nobody wanted, but it did create an issue of uncertainty that a truck driver would have to assess and therefore, hopefully, encourage the truck driver to leave peacefully, which was the objective all along.


  131. Michael Sabia, Deputy Minister (GC-FIN)

    But it's instructive that that never happened.


  132. Michael Sabia, Deputy Minister (GC-FIN)

    It's positive that it had the effect that it had, which it was creating a possibility that that might happen, but that it never actually happened. That's an almost ideal combination.


  133. Michael Sabia, Deputy Minister (GC-FIN)

    It did.


  134. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, so we were -- no mystery here. We were wanting to track this information, again, as you've said, not with respect to individual names, et cetera, but aggregate data, we were wanting to track that, one, to see whether or not this activity was actually underway, that what we had set out to do was actually underway; and second, again, and this is, you know, very important, we were tracking it because the whole intent here was to have this in place for as short a period as possible so that it could be -- that this kind of activity could be removed as quickly as possible because hopefully it was no longer needed. Because if it had the intended effect of bringing a peaceful end or contributing to bringing a peaceful end to these disruptions, then mission accomplished and this whole thing should go away. So in the interests of being able to do that as promptly as possible, yes, we were tracking this fairly carefully. And as you know, I think the -- I think as of February, what, the 21st/22nd, pretty much all of these accounts had been unfrozen. So it was actually quite -- it came and went quickly, which is what our intent was at the time, because it contributed to the peaceful end in a way that we had intended.


  135. Michael Sabia, Deputy Minister (GC-FIN)

    Well yes, because the disruptions -- as the disruptions were coming to an end, the RCMP was doing a good job of communicating that to the financial institutions, and they were quickly unfreezing accounts.


  136. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, look, I can’t speculate as to what Alex’s purpose was, or behind that email. The Minister wanted to be kept in the loop on the level of activity and whether we were seeing progress here, and we certainly kept her in formed of that.


  137. Michael Sabia, Deputy Minister (GC-FIN)

    Well I think that period from the invocation of the Emergencies Act to when the Emergencies Act was then rescinded or removed was such a short period of time that it’s, you know, I think quite logical. I think there were only -- I can’t -- don’t hold me to the number of five ---


  138. Michael Sabia, Deputy Minister (GC-FIN)

    --- or six transactions that did surface as a result of that, because we’re talking about a period of what? Six or seven days.


  139. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, but the issue there, of course, as you know, is that because the perimeter of what FINTRAC was actively reviewing was probably narrower than it should have been, because it didn’t include crowd funding and it didn’t include payment processors, that clearly that was a gap and that gap needed to be addressed, which we did temporarily -- on a temporary basis in the Employment Act -- the Emergencies Act, and then on a longer term basis, in legislation and regulations that followed.


  140. Michael Sabia, Deputy Minister (GC-FIN)



  141. Michael Sabia, Deputy Minister (GC-FIN)

    To our knowledge, no donors were affected by this -- the order.


  142. Michael Sabia, Deputy Minister (GC-FIN)

    There were no accounts frozen -- to the best of our knowledge, based on the information that we’ve received, there were no accounts from donors that were frozen.


  143. Michael Sabia, Deputy Minister (GC-FIN)

    I think that’s an issue for -- I think that’s an issue for the financial institutions and how the financial institutions administered these things. I don’t think that’s something that is the ambit of the Government of Canada. I think if -- I mean, that’s something that, as you know, in how the credit system works, that’s something that the credit system should be able to deal with on its own.


  144. Michael Sabia, Deputy Minister (GC-FIN)

    Well I guess I would dispute that. I think the Government of Canada made some decisions with respect to the cessation of financial services, the freezing of accounts, to individuals who were involved in illegal activities, and all that those individuals had to do was to leave. And the -- let’s put this -- let’s back up a little bit. The government announced its intention to proclaim or to invoke the Emergencies Act on the 14th. It was very clear, very clear, as of that date, and the Minister of Finance was very clear as of that date, that people involved in these disruptions ran the risk of having their accounts frozen. That was very clear. So there was a period of notice there and it was very clear that all that had to happen was for those people to leave and as -- if they did, their accounts would never have been frozen, or that they would be immediately unfrozen if they did leave. So I think people had reasonable notice and it was a very simple solution. All you had to do was leave.


  145. Michael Sabia, Deputy Minister (GC-FIN)

    But that was never -- that was never in our minds. That was never part of the intent of what we were trying to do, because honestly, I think that the credit system itself ought to be agile enough that those kinds of outcomes not happen.


  146. Michael Sabia, Deputy Minister (GC-FIN)

    But it wasn't.


  147. Michael Sabia, Deputy Minister (GC-FIN)

    But it wasn't any part of our intent ever.


  148. Michael Sabia, Deputy Minister (GC-FIN)

    Isabelle's a lawyer.


  149. Michael Sabia, Deputy Minister (GC-FIN)

    Probably should.


  150. Michael Sabia, Deputy Minister (GC-FIN)

    Some day you'll have to explain to us, who comes up with this ---


  151. Michael Sabia, Deputy Minister (GC-FIN)

    --- classification system?


  152. Michael Sabia, Deputy Minister (GC-FIN)



  153. Michael Sabia, Deputy Minister (GC-FIN)

    And I said that this morning.


  154. Michael Sabia, Deputy Minister (GC-FIN)

    Or this afternoon.


  155. Michael Sabia, Deputy Minister (GC-FIN)

    Well, look, the gap here that crowdfunding and payment processors were not in the ambit of FINTRAC, this was something that people in Finance that had been aware of for some time. This was not a revelation. So the issue here -- so you got to separate two things. On the one hand, this gap needed to be corrected, just because with the rise in importance of crowdfunding, et cetera, this was an obvious oversight. And it was the Department's intention to recommend to the government that this be fixed, and it would have been in the traditional way that you would go about adjusting something like this. So that -- and that was in a -- let's call it a steady state world. So in this circumstance, obviously, we were not in a steady state world. And our intention here was to move as quickly as we could to try to correct this gap. And given the decision of the government to move in the direction of the Emergencies Act, that created an opportunity to address the specific case. But please note that in what we did here, we only applied it to crowdfunding platforms and payment processors who were in somehow, in some control of assets or capital of financing that may be associated with these "illegal activities" as declared by the Emergencies Act. So it was quite limited and it was only in place for, what, a period of six or seven days. We then, this issue having been resolved, returned to the more status quo kind of approach and we did correct this in the April budget I think ---


  156. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, yes.


  157. Michael Sabia, Deputy Minister (GC-FIN)

    Well, legislative amendment or even a regulatory change ---


  158. Michael Sabia, Deputy Minister (GC-FIN)

    --- because they too take ---


  159. Michael Sabia, Deputy Minister (GC-FIN)



  160. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, and not just as easily.


  161. Michael Sabia, Deputy Minister (GC-FIN)

    Just because the regulatory process, there are several steps to it. It is quicker, you are correct, than ---


  162. Michael Sabia, Deputy Minister (GC-FIN)

    --- in typical circumstances than the legislative process, but there are a number of steps.


  163. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, big difference.


  164. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah, but I fail to see, given how narrowly the Emergencies Act was used here in applying it only in a very, very narrow slice of crowdfunding platforms and payment processes, you know, I fail to see how there's really a meaningful distinction, and importantly, that that very narrow change was only in place for six or seven days, and we then corrected it later, as per this process.


  165. Michael Sabia, Deputy Minister (GC-FIN)

    So I think we're kind of both on the same page.


  166. Michael Sabia, Deputy Minister (GC-FIN)

    (Inaudible response)


  167. Michael Sabia, Deputy Minister (GC-FIN)



  168. Michael Sabia, Deputy Minister (GC-FIN)

    Oh, no, go ahead.


  169. Michael Sabia, Deputy Minister (GC-FIN)

    Those things usually cost money.


  170. Michael Sabia, Deputy Minister (GC-FIN)

    I saw the letter but not immediately after it was sent, sometime thereafter.


  171. Michael Sabia, Deputy Minister (GC-FIN)

    We’re not involved in the kind of generalized process that you refer to in the first part of your question. But in the second part, any time we get a letter of this kind seeking funding -- and I’ll let you in on a secret; we get a few of those -- we have -- obviously, those letters they come from, you know, the Mayor of a city of importance of Windsor, or lots of other people, we treat those letters seriously, and there is an internal process around this kind of request, and there will be discussion with the Minister of Finance about it. As -- that’s standard for how we treat this kind of thing.


  172. Michael Sabia, Deputy Minister (GC-FIN)

    I think now you’re negotiating.


  173. Michael Sabia, Deputy Minister (GC-FIN)

    Oh, I’m not sure about planned in advance because the world is a changeable and unpredictable place, so I’m not sure that this is always possible to do, in advance. But if you’re asking me -- to pre-empt, probably, your next question -- whether, you know, trying to find some reasonable outcome here involving the City, the Province, and ourselves, whether we’re open to having some kind of discussion about that, I mean, I think the answer to that is we’re always open to having those kinds of discussions, and we’ll see where it takes us.


  174. Michael Sabia, Deputy Minister (GC-FIN)

    But this isn’t the place to work out a deal.


  175. Michael Sabia, Deputy Minister (GC-FIN)

    It would be if we had advance notice of disruptions of this magnitude.


  176. Michael Sabia, Deputy Minister (GC-FIN)

    Which typically -- typically, we don’t get advance notice.


  177. Michael Sabia, Deputy Minister (GC-FIN)



  178. Michael Sabia, Deputy Minister (GC-FIN)

    Not specifically in the way you put it. we were exploring A, their continuing reading of the economic situation and how that was unfolding, and B, what possible solutions could look like or possible actions that could be taken to try, once again, I’ll repeat myself, to bring this difficult situation to a peaceable end. And that had many forms, and there were a variety of options. The Emergencies Act was nothing more than an option at that point.


  179. Michael Sabia, Deputy Minister (GC-FIN)

    Sure. In the same way that we discuss potentialities that might find their way into all kinds of things all the time.


  180. Michael Sabia, Deputy Minister (GC-FIN)

    Yes, because for a certain category of actions that the government might or might not decide to embark on would require the cooperation of those institutions as those measures would be implemented. So conversation with them seemed to us to make sense.


  181. Michael Sabia, Deputy Minister (GC-FIN)



  182. Michael Sabia, Deputy Minister (GC-FIN)



  183. Michael Sabia, Deputy Minister (GC-FIN)

    Well I think that meeting was -- it was broader than just a discussion of the implementation of the Emergencies Act. There were -- no decisions had been made at that point. That was, to the best of my recollection, a much broader conversation around conditions in the country at the time. There were reports that were inputs into that, meaning from a variety of different agencies across the Government of Canada, including National Security and others.


  184. Michael Sabia, Deputy Minister (GC-FIN)

    So there were a whole variety of things.


  185. Michael Sabia, Deputy Minister (GC-FIN)

    Well if you’re asking me hypothetically could that had happened, I guess, yes, theoretically, that could have happened.


  186. Michael Sabia, Deputy Minister (GC-FIN)

    Well you need to separate things. The Incident Response Group ---


  187. Michael Sabia, Deputy Minister (GC-FIN)

    Well full Cabinet, I have to be reminded of the dates here, but full Cabinet, I believe met on the Sunday evening, ---


  188. Michael Sabia, Deputy Minister (GC-FIN)

    --- but I’m not -- I don’t have a perfect recall as to the timing of that. But I believe there was a full Cabinet meeting on the Sunday evening.


  189. Michael Sabia, Deputy Minister (GC-FIN)

    Well it depends what you consider consultation. I had had some informal consultations, but in the previous weeks, with some of the leadership of some Canadian insurance companies.


  190. Michael Sabia, Deputy Minister (GC-FIN)

    But look, I would say, as I read this now, I think this is poorly drafted.


  191. Michael Sabia, Deputy Minister (GC-FIN)

    They were consulted afterwards.


  192. Michael Sabia, Deputy Minister (GC-FIN)

    I think we were very much aware of the fact that credit unions, for long historical reason, have a substantial presence in Saskatchewan and in some other provinces Canada.


  193. Michael Sabia, Deputy Minister (GC-FIN)



  194. Michael Sabia, Deputy Minister (GC-FIN)

    Thank you.


  195. Michael Sabia, Deputy Minister (GC-FIN)

    I'm sure you're aware that FINTRAC does have enforcement authorities?


  196. Michael Sabia, Deputy Minister (GC-FIN)

    Yes, and the measures were never -- the application of the Emergencies Act was always from the date prospectively, not retrospectively.


  197. Michael Sabia, Deputy Minister (GC-FIN)

    So that this only captures a donation that is going to then a declared illegal activity.


  198. Michael Sabia, Deputy Minister (GC-FIN)

    I think the objective was to try to bring, as I said before, to a peaceable end a set of activities that were -- had then been declared illegal, and the objective was to try to bring that disruption, for all the reasons we discussed earlier this morning that I won't repeat -- to bring that to a peaceable and timely end. That was the objective.


  199. Michael Sabia, Deputy Minister (GC-FIN)

    But that only applied in Ontario, and that’s the whole point. Because money's fungible, as Isabelle says, it can flow anywhere in the country, so one provincial government taking action doesn’t resolve the issue. The issue for the national government was trying to do this on a broad-based approach because that’s the way you contain a situation where money can flow anywhere, which it does all the time.


  200. Michael Sabia, Deputy Minister (GC-FIN)

    I think it was just in the Province of Ontario, was my understanding. I may be -- I'm not a lawyer. I may be wrong about that, but I thought it was just -- with just application in Ontario.


  201. Michael Sabia, Deputy Minister (GC-FIN)

    I am not aware of that, and that is the first time that I have seen this document. And it seems like if you want to pursue that, it's best to pursue that with the Office of the Minister.


  202. Michael Sabia, Deputy Minister (GC-FIN)



  203. Michael Sabia, Deputy Minister (GC-FIN)

    Well, I think it's a shorter time period than that, because I think on February the 21st -- I'd have to check the date -- 21st or 22nd, the RCMP had indicated to the banks given the progress on ending the disruptions that all those accounts should be unfrozen. So it was really in a period from the coming into force of the Emergency Act on the 15th and say the 20th or 21st of February.


  204. Michael Sabia, Deputy Minister (GC-FIN)

    Well, that's our understanding. I mean, we were not involved and don't individual level information here, but that is our understanding.


  205. Michael Sabia, Deputy Minister (GC-FIN)



  206. Michael Sabia, Deputy Minister (GC-FIN)

    Yes, that's correct. It would be much smaller we believe.


  207. Michael Sabia, Deputy Minister (GC-FIN)



  208. Michael Sabia, Deputy Minister (GC-FIN)



  209. Michael Sabia, Deputy Minister (GC-FIN)



  210. Michael Sabia, Deputy Minister (GC-FIN)

    Sure. In the U.S. legislation, since passed, they provide -- there had always been a certain level of subsidy for electric vehicles, and that level of subsidy one way or another was matched because they were quite small on the U.S. side and on the Canadian side. The proposal was a dramatic increase in the level of government subsidy for electric vehicles that were assembled only in the United States. That was -- it is a dramatic increase. So the issue for us was that if that remained the case, and that electric vehicle assembly was done on an American basis not a North American basis, then a Canadian industry would be at a very, very substantial disadvantage, and that in effect, we would either, as a much smaller country, have to match the magnitude of those subsidies or have, in effect, over time the automotive industry migrate into the United States. The automotive industry, you know, is an extremely important part of the Canadian economy, and an essential part of the central Canadian economy. So finding a -- working toward a North American approach to the assembly of electric vehicles was something that was very important to us and to those companies, and especially to autoworkers. So that's why the concern that was being expressed in the United States that Canada's no longer reliable raised such a serious issue for us because if that was the political perception, then our chances of being able to convince Washington to adopt a North American approach to this, which of course required a level of confidence that auto parts and cars could move across the border pretty seamlessly, if we were not successful in doing that then as I say there would be a very severe economic consequence for -- I mean, there are 500,000 workers in Canada directly and indirectly whose jobs depend on - - I mean, it's a very, very important sector.


  211. Michael Sabia, Deputy Minister (GC-FIN)



  212. Michael Sabia, Deputy Minister (GC-FIN)



  213. Michael Sabia, Deputy Minister (GC-FIN)

    Well, I think, because our concern at the time was not only with respect to the Ambassador Bridge, our concern at the time was that while a disruption may have ended in one place there was certainly the very live possibility that disruptions could emerge elsewhere, or in fact, at that same bridge. We had no level -- no reason to believe that those disruptions had come to an end, period, at the time, prior to the time of the Government's decision with respect to utilising the Emergencies Act. And indeed, it was -- that was one of the significant factors that there was no way of judging whether we could find ourselves in a situation of kind of rolling disruptions across various border points of entry. Had that occurred and had we been unable to manage that situation, I think the reaction in the United States, in the politically important State of Michigan and in the Federal Government, would have been to very seriously question Canada's ability to continue to act as a reliable trading partner.


  214. Michael Sabia, Deputy Minister (GC-FIN)

    Yeah. I'd just like to add something here. You know, we talk about 0.1, 0.2 and the impact on growth rates and this and that, and we talk about it in very antiseptic terms. But what we're really talking about here is, you know, and we were already experiencing it, but we're really talking about what does it mean 0.1, 0.2. It's not just a number. It means layoffs. It means lower incomes for workers. It means communities less able to count on certain companies. I mean, there are real human consequences to these numbers, whether it's an auto worker, or whether it's someone in the food sector in western Canada and their ability to pay mortgages, et cetera. I mean, we had a lot of good conversation today about those who were involved in the disruptions themselves, but there's also a dimension of this about, well, what are the rights of the people who suffered the economic consequences of this kind of disruption, because they are real and they are meaningful.


  215. Michael Sabia, Deputy Minister (GC-FIN)

    Well, I think in an ideal world, these disruptions had already gone on. They varied, the length by where they were in the country, but these disruptions had already gone on for a reasonable period of time, so -- reasonably lengthy period of time. So our objective here was we were thinking about this in a, you know, a period of several days or a week, perhaps a bit more than a week. But what we very much wanted to avoid was what Rhys just said, particularly with the automotive sector, where once inventories were down, then the cost of this thing on a week-by-week basis would really escalate, and that's what we wanted to avoid. As it happened, we were able to avoid it, and therefore, the economic effects and the long-term scarring of all of this was, you know, was quite limited. But that's because it was ended quickly.


  216. Michael Sabia, Deputy Minister (GC-FIN)

    No, and it would have been inappropriate for us to.


  217. Michael Sabia, Deputy Minister (GC-FIN)

    Because we should not have -- in the interests of protecting people's privacy, we should not have access to that information.


  218. Michael Sabia, Deputy Minister (GC-FIN)

    It would be law enforcement.


  219. Michael Sabia, Deputy Minister (GC-FIN)

    Law enforcement.


  220. Michael Sabia, Deputy Minister (GC-FIN)

    Which is, of course, why, just to complete the thought, a combination of these two things, information from law enforcement and utilizing the pretty sophisticated technological abilities of financial institutions is the way to maximize the accuracy of these actions, and accuracy matters here for obvious reasons. So we think, actually, that you described it as a hybrid approach. That kind of hybrid approach actually delivered a good result.


  221. Michael Sabia, Deputy Minister (GC-FIN)

    I think the Minister made that comment early -- relatively early in the day on the 14th, although I don’t remember the time, in the context of a broader news conference, I think in the company of the Prime Minister announcing the government’s intention to put in place the Emergencies Act. It was also very, very extensively picked up and reported in the public media through the course of that day and evening.


  222. Michael Sabia, Deputy Minister (GC-FIN)

    And there’s lots of anecdotal material that we heard subsequently of RCMP officers or other officers speaking to truckers or other people who were protesting saying -- giving protesters the opportunity to say, “Look, I am leaving. I’m leaving, you know, tomorrow,” et cetera. As I understand it, in those cases law enforcement authorities were quite flexible; as long as they had an undertaking that the person was leaving, they did not take the further step of then freezing that bank account. So I think there was quite a lot of good common sense I how this was applied, and gave people the opportunity to, you know, just go home.


  223. Michael Sabia, Deputy Minister (GC-FIN)

    So for my part; look, you always learn from experiences. And this was a highly unusual experience. And as an organization, speaking on behalf on the Department of Finance, as an organization, I mean, we would be misguided not to try to learn from it. I think we did what we needed to do in very compressed periods of time, and I think just history, I think the record shows that we were able to -- in taking the actions that we took, we were able to minimize the damage to the national economy. And that means, I want to emphasize this point again, that means minimizing the damage to people. It’s not antiseptic stuff, and it’s not just about companies. It’s about people. It’s about workers. It’s about paychecks. And we ought not to lose sight of that when people like us talk about, you know, point one and point two. It’s about people. So given that, yeah, can we do things, like think through protocols of activity if these very unusual circumstances were ever, and I hope they never do, arise again, and would we be better positioned if we had thought through in advance protocols of exactly what to do, and when to do it, and with whom to consult? Now circumstances vary, so who you’re going to consult with varies, but could we make that better? Sure. Because you can always learn. And we’re open minded about that, and we will. But again, and I won’t say more on this, I’ll just say, in the circumstances, and I think the record shows this, we were able to avoid some potentially very, very serious consequences for, in effect, millions of people who could have been affected by this.


  224. Michael Sabia, Deputy Minister (GC-FIN)

    Well, Commissioner, you’re going to get a biased answer, ---


  225. Michael Sabia, Deputy Minister (GC-FIN)

    --- because my biased answer is, for all the reasons I just said, economics is not about economics. It’s about people and it’s about the welfare of people. So one way or the other, and you’re in a much better position than we are to decide whether or not it’s in public order or some other category, et cetera. I won’t venture into that world. You’re much more experienced and I would be impertinent to venture a view on that. But do I think threats to Canada’s national economy warrant being taken very seriously and integrated somehow? In this kind of -- in these kinds of legal structures? My answer to that is unambiguously yes, just because they are of the importance that they are to people. So my answer is yes. And if there’s ambiguity around those issues, then clarifying, I think, that ambiguity would be a very useful thing. If there is ambiguity.


  226. Michael Sabia, Deputy Minister (GC-FIN)

    Thank you.