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

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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 is appearing before the Public Order Emergency Commission as it reviews the government’s decision to invoke the Emergencies Act on Feb. 14 to clear anti-public health measure protests in Ottawa and deter border blockades. 

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)

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.

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.”

The government cited the risk to Canada’s economic security when it invoked the Emergencies Act last winter. 

WATCH | Deputy prime minister explains discussions with White House official

Deputy prime minister explains text discussions with White House official

Deputy Prime Minister Chrystia Freeland tells inquiry she and White House director of economy Brian Deese discussed how trade harm caused by the self-described ‘Freedom Convoy’ wouldn’t just be felt temporarily.

Transport Canada estimates the blockade at the Ambassador Bridge, a key trade corridor, brought an estimated $2.3 billion in trade to a standstill.

The commission has heard already that during the convoy protests, the federal government was trying to convince the United States to scrap a plan that would exclude electric vehicles assembled in Canada from a proposed consumer tax credit, which would give an advantage to companies manufacturing electric cars on U.S. soil.

Freeland called it “life or death” for Canada’s auto industry.

“That would have been a disaster for us,” said Freeland, describing what she believes would have happened if the Biden administration hadn’t expanded the tax credit to cover electric vehicles produced throughout North America.

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

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 expressed concerns about how the government planned to 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.”

The speakers also questioned Canada’s relatively strict pandemic measures, which at the time were the strongest in the OECD.

Freeland assured speakers on the call that she would take whatever action was required, saying “all options are on the table.”

“I am very resolute in ending this occupation of our democracy,” she said.

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.

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 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.

Several members of Prime Minister Justin Trudeau’s staff are 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 will offer a rare glimpse into the inner workings of the Prime Minister’s Office and likely will face questions about the deliberations that went into the invocation of the Emergencies Act.

Read More: U.S. concern about convoy blockades meant a ‘dangerous moment for Canada,’ Freeland tells

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