44th Parl. 1st Sess.
November 23, 2022
- Summary:
Bill C-249, also known as the Encouraging the Growth of the Cryptoasset Sector Act, aims to develop a national framework to support and promote the cryptoasset sector in Canada. The Minister of Finance will be responsible for creating this framework, which will focus on reducing barriers to entry into the sector, protecting individuals working in the sector, and minimizing administrative burdens. The Minister will actively consult with designated persons from the provinces and territories who have experience in the cryptoasset sector. The framework will be developed based on these consultations and will be open to public submissions and comments. Within three years of the Act coming into force, the Minister will prepare a report outlining the framework, which will be tabled in Parliament and made available to the public. It's important to note that this Act does not require provinces to take specific actions that fall within
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Uqaqtittiji, I will be splitting my time with the member for Winnipeg Centre.
I acknowledge all of the work that has been done by the New Democrats for indigenous rights, now and before my time. Jordan's principle emerged out of the work of former MP Jean Crowder's Motion No. 296. This motion was followed by Bill C-249 tabled by former NDP MP Pat Martin in 2008. Both called on the government to immediately adopt a child first principle based on Jordan's principle.
Jordan's principle is now one of the most important programs run by the federal government to uphold its obligations to indigenous children, thanks to the NDP. Bill C-262, introduced by former NDP MP Romeo Saganash in 2016 finally forced the breakthrough that led to the government passing the United Nations Declaration on the Rights of Indigenous Peoples Act in 2021.
New Democrats fought for investments in the last budget, and we secured $4 billion over seven years for the for indigenous, by indigenous housing program. From the beginning, I knew this amount was not enough. Much more investment is needed. The NDP agreed to the urban, rural and northern indigenous housing strategy, knowing it could make a dent in the current situation. If the NDP did not fight, we would not have gotten anything for housing. When the Liberals and Conservatives will not step up, New Democrats do.
Last week, the Conservatives voted against the supplementary estimates, which included investments for Indigenous Services Canada at $6.8 billion and investments to Crown-Indigenous Relations and Northern Affairs Canada at $3.2 billion. These total over $10 billion in departmental funding that indigenous peoples rely on, which the Conservatives voted to deny.
As for the Liberals, they are not much better. We have heard from the Nuu-chah-nulth Tribal Council that there are massive backlogs at Indigenous Services Canada for issuing status to registrants. This leaves infants waiting 18 to 24 months to get their health benefits. This is absolutely unacceptable.
We hear about the huge backlogs to address Jordan's principle issues. We hear about the backlogs to address payments for services through the non-insured health benefits program. We have heard that Indigenous Services Canada is changing funding formulas for education without even talking to indigenous communities.
Indigenous Services Canada set a goal of 2030 to eliminate the infrastructure gap, but they have no hope of achieving that at current investment levels, as it is a $349.2-billion first nations infrastructure gap. Indigenous peoples have offered solutions, but they are consistently ignored.
Not only are they making cuts to investments to improve the well-being of indigenous peoples, they are planning to cut staff in their department. According to their website, they anticipate cutting staff by 1,000. Imagine how much worse these backlogs will be. They will keep indigenous peoples marginalized.
Grassy Narrows is still waiting for its mercury care facility, despite repeated assurances from the Liberal government that it would be built. Tataskweyak Cree Nation in Manitoba had students with no school to go to as the school remained closed because it had no heat. It is still waiting for a new school after their roof caved in last month. That school, when it was built originally, was already overcrowded.
There are many more examples across the country. The Liberals love announcements and photo ops, but they disappear when it is time to actually flow the funds that indigenous peoples need. The urban, rural and northern indigenous housing strategy is one such example. It was announced in 2022, and it was supposed to be released in 2023. It is now December 2023, and we have not seen the release of those funds.
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I declare the motion defeated.
Is the hon. member for Kingston and the Islands standing on a point of order on technical reasons?
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Pursuant to an order made on Thursday, June 23, the division stands deferred until Wednesday, November 23, at the expiry of the time provided for Oral Questions.
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Madam Speaker, I do have a degree in economics. I want to talk about why this bill is so important and ask the member to reconsider.
When Bernie Madoff ran his Ponzi scheme, we did not seek to ban email or ban phones because he used those to lure victims, and we did not try to vilify the entire investment services industry because of one bad actor. What we did was seek to strengthen safeguards to ensure that bad governance and “too good to be true” schemes were not taking place anymore. We sought to educate people so they would not be lured into schemes, and most importantly, we said we need to do these things so this sector that is important to our economy can continue to grow.
I am very concerned by, in Parliament, the words and speeches on this bill, which is fully amendable. It can go to committee, and every single different party can edit the scope of the framework. I made it purposely non-partisan. The reason “growth” is in the title is that the toothpaste is out of the tube on Web3 technologies, and cryptocurrencies are but a small, infinitesimal drop in the bucket of how our economy and our society are changing by blockchain technology.
It is called “Web3” for a reason. If we think about Web1 as our just being able to read a site on the Internet, and then Web2 as being things like Facebook where we can read and write, Web3 means that individuals can own data and digital assets. For each of us in this place, and probably in the broader Canadian economy right now, the production value of our data might be greater than the value of the labour we provide. Thus how can we sit here and say we should not be putting together a growth framework that provides all the safeguards we have been talking about here for an area of the economy that we so desperately need?
I represent a riding in Alberta, and I hear, day after day, colleagues of different political stripes talking about how the people who work in my community in natural resource-based jobs need to transition away from these jobs into digital-economy based jobs. Digital asset jobs are the very jobs we all are talking about. It is those jobs, but we have had the Bloc Québécois who, on behalf of their colleagues and the people in Quebec, make the argument that we need fewer natural resource-based jobs and more digital economy jobs, and the speech they gave was that we need to not support this growing more, but to restrict it, and similarly the government said the same thing.
I do not want to ascribe motive, that this is what my colleagues meant to say, but I want them to understand what investors hear when they listen to this debate, and investors are listening to this. They say not to invest in Canada, because politicians in Parliament are willing to get cheap political points. We are talking about making a decision on an industry over cheap political points, instead of doing something that resembles work at committee.
I could have picked any private member's bill. I could have picked the national day for something and gotten a big win, but instead I tried to pick something that was one of the hardest things for us to deal with as a Parliament, and I tried to do it in a non-partisan, non-prescriptive way, so that if this bill got to committee, everybody in this place could amend it. Why would we leave this to happen behind closed doors in the government, if it happens at all, without the input of industry?
If we allow that to happen, the result is things like Ethereum, Vitalik Buterin's organization, which now has a market cap of over $150 billion. All of those jobs and all of that capital, even though he is Canadian, are in Switzerland, because they have a legislative framework. The Americans have a legislative framework. The Europeans have a legislative framework, yet we are sitting here trading partisan barbs, instead of talking about how we grow a sector that could be the solution to all of our job problems in this country.
Yes, we need safeguards. Yes, we need better rules, but we are the ones who are supposed to do that. Why are we abdicating this responsibility? I do not want to look back in 10 years on this debate and say we missed an opportunity because of partisanship. Members should go back to their colleagues on Wednesday, have a caucus meeting and support this bill through to committee stage.
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Madam Speaker, we have already stated our position on this bill. I will not elaborate on the fact that cryptocurrency or cryptoassets are not well understood, that they are growing rapidly, that we have no control over them and that they facilitate money laundering and speculation. We have already talked a lot about those aspects.
It is hard to know the implications of all of this, even after talking to economists. Since the Bloc Québécois has already gone over much of that, I want to provide more of a macroeconomic analysis. That is something I know a little more about.
The existence of cryptocurrency causes problems with state economic intervention. Let me explain why. In his 1776 work, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith made the groundbreaking assertion that money and currency were just a veil and not worthy of our attention. According to Adam Smith, money and currency are like watching a play with the curtains down: The actors perform the play behind the curtains, but the spectators see only the curtains and cannot observe the economic life that takes place behind the curtains. This is why, according to Adam Smith, we should take an interest not in money and currency, but in the actors, in the economy in the true sense of the word, and in the different economic forces that interact.
Later on, it was suggested that money is not necessarily something useful. During the crisis of the 1930s, GDP fell by 40% over three years and the unemployment rate was 25%. Very little was done to help the unemployed. It was a catastrophe.
Upon analyzing that economic crisis with some hindsight, it is pretty clear that all the factors that could contribute to a collective collapse were there. Monetary delinquency was one of the reasons why that crisis was so severe, and I use the term “monetary delinquency” because, at that time, people did not believe that monetary policy was very important to the economy. The various players had been allowed to act in a decentralized way, and people later realized that this had aggravated the crisis. During that severe economic crisis, interest rates went up, which further depressed economic growth, after it had already naturally dropped off.
This is where another great economist, John Maynard Keynes, came in and said that governments had a role to play and that they must intervene in the economy. He began telling the government that it had to use its two arms of intervention, the fiscal or budgetary arm and the monetary arm. He helped people understand that monetary policy can be very important to the economy and can change the macroeconomic situation in different countries.
Keynes said at the time that intervention was needed in those two areas, and it just so happens that the Bank of Canada was created in 1935. The bank was created precisely so that the Canadian government could intervene more intelligently in order to ensure the economic well-being of Canadians.
The fundamental objective of the Bank of Canada is to ensure the economic well-being of Canadians. Top economists have worked at Canada's central bank, which is renowned around the world. It is one of the leading banks because it takes its role seriously, it is intelligent and it is there to serve the economic needs of citizens. No leading economist believes that the Bank of Canada does not act in the interest of the well-being of Canadians. By the way, it is beyond the reach of political power.
This led to the creation of monetary policy using fluctuating interest rates to intervene in the economy. Little by little, some economists noticed that the Bank of Canada could influence production, but only in the short term. When it intervenes, its actions tend to have long-term effects on inflation. This is when monetarists came on the scene saying that the Bank of Canada's only job was to control inflation. To understand this, we must go back to the 16th century when Jean Bodin came up with the quantity theory of money.
He was saying that printing money always leads to inflation. Back in the day, the great explorers of America came with a lot of gold, which was the currency at the time. Prices skyrocketed while production had not really changed. That is when it became clear that the important thing when working on and dealing with currency is to keep an eye on long-term inflation.
In the 1990s, the Bank of Canada used the central bank only to control price levels. Its fundamental objective of ensuring the well-being of Canadians turned into an economic objective. The Bank of Canada ensured that prices remained stable. Inflation was allowed to oscillate between 1% and 3% with an ideal target of 2%. The Bank of Canada was the second bank in history to be that transparent, after the Bank of New Zealand.
Why is it so transparent? It is very simple. Between the time when the Bank of Canada intervenes on interest rates and the time that its actions impact inflation, there are several economic agents who intervene. Plus, that time span can stretch up to two years. It is very complex. The economists at the Bank of Canada are not clowns; they are not performers who get overly agitated. No, they are intelligent, hard-working people. They have extraordinary tools. They can tell us the value of the money supply at a given time and how much money, in its various forms, is circulating in the economy. That is what the Bank of Canada does. The more accurate and transparent the bank is, the greater the impact and efficiency. The goal is to improve the central bank's efficiency.
Then cryptocurrency comes and puts a wrench in the works. By introducing cryptocurrency into the economy, by giving it an increasing role, the central bank's connection to interest rates becomes weaker. There is also an impact on the consequences the inflation rate has on the economy. In the end, this is another currency that is out of the bank's control, that is unfamiliar and that will, quite simply, disrupt the well-informed connection that has been created between the Bank of Canada and inflation.
Bodin's quantity theory of money states that the greater the money supply, the more it feeds inflation. This means that the more cryptocurrency there is, the more money there will be, and the more inflation there will be. Conservatives, who fight inflation day and night, want to bring in another money product to further increase inflation. Do they have an economist in their party?
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Madam Speaker, thank you for the opportunity to talk about Bill C‑249, an act respecting the encouragement of the growth of the cryptoasset sector. I would also like to thank my colleague from Calgary Nose Hill for bringing this important matter to our attention.
This bill would require the Minister of Finance to develop a national framework to encourage the growth of the cryptoasset sector and, in developing the framework, to consult with persons working in the sector who are designated by provinces and territories. I believe this bill merits careful study. I realize that it is well-intentioned, but we must also consider the risks it poses to the country and to all Canadians. Financial innovation can certainly provide significant benefits, such as making payments more efficient, offering a broader range of services and reducing costs for consumers. This change may also make financial services more inclusive and more responsive to the changing needs of consumers and businesses.
In fact, on March 22, the government announced its intention to move forward with open banking in Canada. Open banking, or consumer-directed finance, is a system that enables consumers to transfer their financial data between financial institutions and accredited third parties in a secure and consumer-friendly manner.
Modernizing the open banking system and payment services will benefit consumers and businesses by offering more choices in the financial services sector at lower cost. These initiatives will also enhance the security and soundness of the Canadian financial system. The government remains committed to modernizing payment services in a way that is responsible and prudent. This modernization must benefit Canadians while maintaining the security and integrity of the financial system.
However, getting back to Bill C-249, it is important to understand that, while cryptoassets are innovative financial products, they pose very significant risks to consumers and to the security and integrity of the Canadian financial system.
The recent protests in downtown Ottawa and at border crossings across the country are an excellent example. Indeed, cryptoassets greatly contributed to funding the protests, which threatened the country's national security for several weeks. Without a doubt, it is vital that any regulatory regime governing cryptoassets balance innovation in the financial system with any possible associated risks in order to ensure that our financial system is safe and secure and benefits all Canadians.
This bill merely seeks to promote growth in this sector, but this approach definitely does not serve the fundamental interests of Canada.
I will now speak about cryptoassets and illegal activities. I would like to remind my colleagues that cryptoassets play an important role in facilitating illicit activities such as fraud, cybercrime and money laundering, among others. This is because not all cryptoasset transactions are subject to the same rules to counter money laundering and terrorist financing, or to the same consumer information requirements.
It is important to understand that cryptoassets are decentralized and based on blockchain technology. This means that cryptoasset transactions can take place beyond our borders, either on numerous exchange platforms, of which there are eight at present, or on peer-to-peer exchanges. Clearly, this creates significant risks for the consumers and investors who participate in these activities. For example, the lack of a framework to protect consumers and investors makes them more vulnerable to fraud.
We were reminded by recent protests in Canada that were financed with cryptoassets that there is also a real risk for our national security. Unfortunately, Bill C‑249 does not address any of these risks.
Instead of blindly supporting the growth of cryptoassets, I think the government should focus its efforts on finding solutions and properly take into account the role that cryptoassets play in facilitating illicit activity.
What is more, given the more global nature of cryptoassets, I think the government needs to work with the provinces to adopt an approach to cryptoassets that is consistent with international standards and best practices. By adopting such an approach, we would limit the risk to Canada's financial system and protect the interests of Canadians.
In conclusion, imagine if every senior had invested their savings into cryptocurrency on the recommendation of the Conservative leader. What position would they be in today?
The bill introduced by the member for Calgary Nose Hill raises some rather complex questions. To me, the main problem is that Bill C‑249 seeks exclusively to encourage growth in the cryptoasset sector, without taking into consideration the major risk it poses to the financial system and Canadian consumers.
As I was saying, cryptoassets play a major role in facilitating illicit activity such as fraud, cybercrime and money laundering, among others. Recent demonstrations across the country are a good example. We have to assume that there is always a risk.
It would make more sense for the government to work on a comprehensive approach to the regulation of cryptoassets that would both support growth and limit the risks to the financial system and consumers.
According to the Conservatives, cryptocurrency is still a good investment. The recent drop in cryptocurrency would have jeopardized the investments of middle-class families and seniors. However, seven months ago, during his leadership campaign, the leader of the Conservative Party encouraged Canadians to avoid inflation by investing in cryptocurrency.
Today, we know that sound financial management does not involve cryptocurrency. Right now, our government is taking a more comprehensive approach and working to more strictly regulate cryptoassets in order to support growth, limit the risks to the financial system and help consumers. Today's cryptocurrency will do nothing to balance consumers' investments.
I am grateful to have had the opportunity to talk about cryptocurrency. I hope all members will unite to vote against this bill.
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Madam Speaker, I welcome the opportunity to speak to Bill C-249. The member for Winnipeg North's speech is a fine reason why the Liberals are dropping in the polls in popularity with Canadians. I wonder if he would say the same thing about any other tradeable asset in Canada. After all, Canada does depend on trade and regulations.
First, before I get into the speech on why we need to move forward and have an open view of getting this bill to committee, I want to thank my good friend and colleague from Calgary Nose Hill for introducing this very important legislation, as was said by the other members as well. Her passion and zeal for good public policy is to be commended. She has an innate ability to cut through the claptrap and get straight to the point. She is results-oriented and always comes to the table with a plan. Her private member's bill is a great example of just that.
I know she has carefully crafted the legislation to allow the Standing Committee on Finance ample room to put forward amendments once expert witnesses have had an opportunity to testify. Unlike some legislation with crafters that guard against any amendments, my colleagues in the House will find that the hon. member for Calgary Nose Hill is ready to work with everyone.
This legislation will start the conversation about how the Government of Canada can begin the process of developing a national framework to protect investors and to encourage the growth of blockchain technology across the country. None of us is so naive as not to notice the recent uptick in media coverage on cryptoassets. The markets are down. Some NFTs have failed spectacularly.
When cryptocurrencies are being written about by political commentators, we know they have finally broken through to the mainstream. With the recent collapse of FTX and the financial fallout felt by many, there is no better time for Parliament to start this conversation.
Those involved in the industry want a regulatory system that will help them build trust, and that is a key point. They want a system that will provide clear guardrails and more stability for all those involved. Legal clarity and better education will lead to more innovation. I also want to stress that we cannot let this issue get polarized to the point that it becomes too toxic to discuss.
The fact that the industry is being disparaged for political reasons is short-sighted and thoughtless. I would encourage all my colleagues in the House to go back to their respective caucuses and stress the need to support this bill and to turn down the rhetoric. I will tell members why as we move forward.
During the first hour of debate on this bill, my colleague from Calgary Nose Hill laid out a compelling argument for why it is time for the Government of Canada to start working on a national framework. As she said in her speech:
Many innovators and proponents of cryptoassets in Canada are actually calling for the federal government to use its convening power to provide policy clarity to the industry. The current lack of clarity, particularly on safeguards to protect those working in the space, is seen as an impediment to investment.
Across the country, there is a mix match of policies. While we respect the jurisdiction of the provinces, the federal government can help facilitate a much more harmonized set of policies for cryptoassets. There are some recent examples of this happening in other countries.
Recently, the President of the United States issued an executive order for the federal government to start drafting a plan. The EU has also started working on a plan so that various countries and industries are in sync. The acceptance and use of cryptoassets is on the rise. That includes cryptocurrencies, utility tokens, security tokens and stablecoins. Cryptoassets will only continue to grow in prevalence in the years ahead.
According to the latest statistics, close to 5% of Canadians now own a cryptoasset. Across the globe there are now thousands of cryptoassets, and more will be made available in the years to come. Regardless of whether someone wants to invest in or purchase a cryptoasset, hundreds of thousands of Canadians are currently engaged in the industry. It is about time we started to think about a national framework and to get various jurisdictions working together.
The Canadian securities administrators are now working in collaboration with the investment industry. They even released guidance for platforms to ensure they are in compliance with regulatory requirements. Securities regulators in individual provinces are now starting to regulate crypto-trading platforms to protect Canadian investors. Last week there was a meeting on Parliament Hill with many of Canada's leading blockchain companies. It was encouraging to hear how they too want to start engaging with policy-makers.
In Canada, we have some of the best and finest innovators in this growing industry. They have the talent and the solid foundation to further expand their operations. They are optimistic about the future of blockchain technology. Our government should also have the same optimism and can-do attitude. What we do not want to see happen again are more lost opportunities, such as when Ethereum, which was mostly designed and developed in Canada, moved to Switzerland.
Other countries are quickly realizing the potential of the entire industry and are quickly seizing this moment. As companies are looking around at countries in which to set up shop, I want Canada to be at the top of their list. I want Canada to be known as a jurisdiction where governments work with and listen to those in the industry, while also educating the public and protecting its investors.
Those in the industry are already talking about making our country a blockchain hub. They see this technology as a way to have a more transparent Internet, and one that will help drive better skills training for the jobs of tomorrow.
The Web3 economy is here and as Morva Rohani, the executive director of the Canadian Web3 Council said, “blockchain and related technologies have unleashed a wave of innovation and creativity for a generation of entrepreneurs.”
The key to this speech is that, at its core, this is what this bill is all about. As the industry grows, I want to see those jobs and the wealth created by those innovators' ingenuity stay right here in Canada. I want Canada to be the best place in the world for the Web3 economy and blockchain innovation.
As with many new innovations, they have the capacity to be used in many ways that were never originally imagined. For instance, blockchain technology can be utilized in various financial services, including remittances, digital assets and online payments, because it enables payments to be settled without a bank or other financial institution taking a cut. Furthermore, the next generation of Internet interaction systems, including smart contracts, reputation systems, public services and security services, are among blockchain technology's most promising applications.
As the Canadian Web3 Council said during their meeting on Parliament Hill last week, blockchain technology can be used for social good. Whether it be energy, climate and the environment, or health care and even agriculture, the potential of this budding industry is endless.
In closing, I urge all of my colleagues to vote in favour of this bill. Let us send it to the finance committee and have the thorough consultations that are long overdue. I believe that it would be prudent for all of us to continue to learn more about blockchain technology. This is an exciting opportunity for the Canadian economy, for our innovators and, most importantly, to help create the jobs of tomorrow.
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Madam Speaker, it is a great honour to rise in the House and discuss what the Conservative Party has put out as its key platform for dealing with inflation: cryptocurrency. It is a really good opportunity to look at what the Conservative leader has as an economic vision. It is perfect that it is happening here just after the weekend, when FTX, the crypto exchange site, collapsed, destroying 32 billion dollars' worth of savings in 48 hours. That is a record for a complete financial collapse. Could we say that money was vaporized?
If we look at what we have offered as New Democrats for responding to inflation, we put forward the need to get children dental care. The Conservative leader, whose kids get their own dental care paid for by the taxpayer, opposed that and said all that money to help children would vaporize. We talked about doubling the GST tax credit. The Conservatives were against it. They said that money would vaporize because of inflation. Of course, there was our work to get rent support for low-income housing, and the Conservatives were dead set against that. They said inflation would vaporize it. What did the leader of the Conservative Party offer as his one solution for fighting inflation? It was Ponzi schemes and cryptocurrency.
The Conservatives had a two-part strategy. One was to spin cryptocurrency as something we could buy a shawarma with and put our life savings into. The second part of the Conservative strategy is even more important to look at. It was his full-on attack on the basic principle of having financial regulations to keep people from being scammed.
I really appreciate the member for Calgary Nose Hill for bringing forward legislation that talks about the need for legislation. She has rightly pointed out that if we do not have regulation, this dark money system could easily be a forum for money laundering and terrorist financing. Who else would want to have a financial system with no checks and balances so we cannot trace where the money goes?
I appreciate that there are members of the Conservative Party who are not in the thrall of whack-job economics. Unfortunately, her leader is a complete devout believer in whack-job economics, because he is dead set against this principle of regulation. He said, “Canada needs less financial control for politicians and bankers and more financial freedom for the people.” He has referred to financial regulations as “cobwebs” that need to be blown away. Of course, he has his other great folk devil, the gatekeepers. We have to attack the gatekeepers, which is why he wants to get rid of the Bank of Canada. It is a full-on attack of basic regulations.
The reason we have these so-called cobwebs is that time and time again we have seen hard-working people's savings wiped out by flim-flam artists: Bre-X, Bernie Madoff, junk bonds and the derivative market that destroyed the savings of millions of people. They would love this leader of the Conservative Party. They would embrace him. They embrace the notion of freedom as the freedom to swindle, the freedom to hustle and the freedom to rob people of their savings.
The leader of the Conservative Party was promoting crypto, but then we found out he was an investor in crypto. I think that is really telling because with a Ponzi scheme, we only get our money back if we sucker other rubes into put their money in too. We had the leader of the Conservative Party using his platform to tell Canadians who were worried about their savings to invest in crypto. He thought, “This is where I'm going to get my money back.” That is highly irresponsible, because who pays the price when $32 billion just vaporizes? It is not Goldman Sachs. It is not Jeff Bezos. It is ordinary working-class and middle-class people who are afraid they do not have enough savings.
I met many people who were investing in crypto because they were guaranteed that it was going to give them the kind of return on investment they could not get anywhere else. They trusted the leader of the Conservative Party.
Of course, he explained what his financial knowledge was: He stays up late into the night watching YouTube videos. I stay up late into the night watching YouTube videos too. I love watching old Motown videos. When I have to fix my toilet, YouTube is a great place to learn how to fix my toilet. However, one thing I learned from the pandemic is that just because buddy with a baseball cap sitting in his mother's basement claims he is an expert on immunology and vaccinations does not mean YouTube is a good place to get medical advice.
What we have learned is the leader of the Conservative Party stays up late into the night learning economics. It is not really too bright to trust the leader of the Conservative Party when he gets his economic vision from YouTube. He is saying he is going to get rid of regulations, he is going to get rid of the Bank of Canada and he is going to get rid of all the cobwebs that have protected people from financial scams year in, year out.
That takes us to the collapse of FTX. There were a lot of of dodgy crypto sites, but this was supposed to be the good one. This was a really good one, apparently. It was set up in the Bahamas, of course, because there is almost no regulation there. They have very limited financial regulation and it is set up as a tax haven with no reporting obligations to anybody. It is like an opaque, financial black box. Is that not exactly what the leader of the Conservative Party thinks is good for getting people investing and believing in crypto?
FTX did not have a board of directors and was not under the oversight of any American regulators, such as the SEC or the CFTC. It is this black box run by a bunch of 20-year-olds who probably would love to party with the leader of the Conservative Party as they talk about crypto conspiracies. However, here is the thing: We found out that FTX also ran a hedge fund, so people were putting their savings into and trusting this black box with no accountability or regulatory oversight. It was moving anywhere from between $1 billion and $10 billion into this side hustle. That is why we have proper financial regulations.
It is really irresponsible for the leader of the Conservative Party to feed on the fears of people in a time of uncertainty by hustling a Ponzi scheme. That is what he was doing. He was saying to trust him on the Ponzi scheme because he was going to get rid of any regulation so people could not really tell what was happening, but that Ponzi scheme would be there for people whenever they needed it. It was not, and we have seen the results.
I am certainly pleased that the member for Calgary Nose Hill is one of the few Conservatives willing to stand up in the face of this party that has now committed to anti-science, anti-vaccination and anti-economics. The Conservatives feel that any kind of regulation on hustlers and swindlers is somehow an attack on freedom: It is the freedom we all enjoy to take our hard-earned savings and get hustled by some scam artist down in the Bahamas. That is not what we should be doing.
We have to have rules in place, we have to have oversight and we have to ask questions about a system that is supposed to be financial and is trading something that does not exist in order to have no financial tracking of it. If we have an ability to transfer money through sites without tracking, of course it is going to be where money is laundered and where criminal activities are. Is that the freedom the Conservative Party believes is so important to protect: the freedom of gunrunners and gangs to clean money through cryptocurrency? We need to shine a light on this practice.
For the people who lost $32 billion in savings in 48 hours, what kind of freedom do they get? Those are hard-working people who trusted this guy while he was standing there eating a shawarma and telling everyone this is the best thing to do. Their kids should not get dental care and should not get the GST, but what they should get is an investment in cryptocurrency with no oversight and they will be better off.
The Liberals are not clear on this either. Before crypto collapsed, they were thinking this was pretty good stuff too. In fact, I know the Liberals invested in cryptocurrency in the Deputy Prime Minister's riding. Before we start promoting these kinds of dodgy financial hustles, we need to ask what rules are in place to protect people and their savings and to have proper oversight. That is something the leader of the Conservative Party refuses to do and he needs to be accountable for it.
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Madam Speaker, this morning I have the privilege of rising to speak to Bill C-249 on the cryptoasset sector, which was introduced by my Conservative Party colleagues.
This bill seeks to require the Minister of Finance to develop a national framework to encourage the growth of the cryptoasset sector within three years after the coming into force of the act.
The bill states that, in developing the framework, the minister must consult with persons designated by Quebec and the provinces and with experts from the cryptoasset sector. Bill C-249 also provides for reporting and tracking requirements in relation to the framework.
In a sector that is more ideology-driven than factual, the bill points out that cryptoassets have significant economic and innovative potential for Canada and that the government must focus on lowering barriers to entry into the cryptoasset sector, protecting those working in the sector and minimizing the administrative burden.
I will not keep members in suspense for very long. I will say right now that the Bloc Québécois will be voting against Bill C-249.
Before getting into more detail about our position, I would like to remind the House and my Conservative colleagues of some financial advice that the leader of the Conservative Party and member for Carleton gave to all Quebeckers and all Canadians last spring. It is no secret that the new leader of the Conservative Party of Canada dreams of bitcoin and other cryptoasset fantasies at night.
Barely seven months ago, in April, he organized a small staged media event when he went to a restaurant in London, Ontario, and paid for a shawarma in bitcoin. He took the opportunity to recommend that Quebeckers and Canadians invest their savings in cryptocurrency to shield their money from inflation.
What reasoning did the leader of the Conservative Party use to offer this advice?
He used a simplistic—and frankly dishonest—intellectual shortcut to blame the big bad central bank for the inflationary crisis and in the same breath presented the decentralized cryptocurrencies, regulated by the very free market, as a magic solution against inflation.
The problem with the supposed freedom of cryptocurrencies like Bitcoin is that they are also free to crash and burn. I say this with great empathy and compassion for anyone who went through this, but the outcome was quite dramatic for those who followed the financial advice of the Conservative leader by investing in bitcoin in April 2022. Just six months later, they could only watch helplessly as close to 70% of the value of their hard-earned savings had evaporated. Poof.
I would like to hear what the Conservative leader has to say to all these constituents who trusted him and who now must surely feel he has cheated, betrayed and abandoned them. While he claims to care about helping families put food on the table, how can he take advantage of his position and the credibility his role gives him to trot out such irresponsible and dangerous financial advice?
As I indicated earlier, the Bloc Québécois will vote against the Conservative bill. My colleagues and I are convinced that, while cryptoassets do have innovative potential in some regards, the regulatory framework around them must be fleshed out and strengthened so as to make the digital and financial ecosystem in which they operate more transparent and accountable.
Unlike the Conservative Party, we believe that legislative action focused strictly on the growth of the sector, as proposed in the bill, on lowering barriers to entry, and on minimizing the administrative burden would be inappropriate and irresponsible.
The sector has experienced indisputable and dramatic growth in recent years. What it really needs now is not support for growth but a real regulatory framework that limits the risks associated with possession and transactions of cryptoassets.
There are still many issues that require us, as decision-makers, to act with caution and diligence in this matter.
The first issue is, of course, the volatility of cryptocurrencies, which is still extremely high and often inexplicable. It can be correlated to media exposure, and an event as trivial as a simple tweet has previously caused fluctuations of several thousands of dollars in just a few hours for some currencies.
That is why many professional investors see the use of cryptoassets as more of a lottery than a serious investment. Similarly, Paul Beaudry, Deputy Governor of the Bank of Canada, considers them to be more of a tool for speculation than a real means of payment, as its supporters want to present it.
Another issue that cannot be overlooked when we talk about cryptoassets is energy consumption, which ultimately leads us to energy production. That certainly is in the Conservative Party’s wheelhouse. To put it simply, cryptoassets are created by mining. This is not mining from the earth, but rather mining done by many very powerful computers operating at full power to perform extremely complicated calculations.
It is also estimated that the total activity generated by cryptomining uses as much energy as a country like Norway, about 130 terawatt hours. By comparison, Hydro-Québec's electricity sales only reached 50 terawatt hours in 2020. I think that we will have to reflect on what we really want to focus on and what we want to do with our energy production.
It appears euphemistic, then, to say that cryptoassets are energy intensive. As Europe is going through an energy crisis, we must ask ourselves whether priority should be given to these activities rather than heating our homes, schools and hospitals. Moreover, the environmental impact of these activities must not be forgotten. For jurisdictions that do not have the opportunity to produce clean energy like Quebec, the pollution caused by cryptomining is extremely significant.
The third issue regarding cryptoassets, which we cannot ignore, is their use to finance criminal and terrorist activities. There is a real and documented possibility of taking advantage of the cryptoasset sector to launder money and finance terrorist activities due to two aspects inherent in these activities: anonymity and the proliferation of instant transactions.
The launderers take advantage of this sector operating outside of conventional banking systems to convert the proceeds of criminal activities into legal tender. There currently exists a regulatory vacuum, one which organized crime certainly takes advantage of.
I will give a concrete example. At this time, current legislation allows people to convert up to $1,000 per day into cryptocurrency at an automated teller machine without having to verify their identity. There are currently no fewer than eight companies that operate such machines in Quebec and a single person can exchange several thousands of dollars per day. Obviously, this is a real boon for criminal organizations.
Terrorists can use it for similar reasons. Since it is difficult to identify the actual recipient of a wallet, money can be transferred from one side of the world to the other to finance terrorist activities without alerting the authorities responsible for our protection. So much for this party claiming to be the champion of law and order.
My time is coming to an end. I will conclude by reminding you that the cryptoasset sector has grown by leaps and bounds over the past few years. However, there have been bumps along the way, and it is now clear, given the crash of bitcoin and several other cryptocurrencies, that it is better to be cautious and responsible when it comes to this technology, which is a minefield of risks and uncertainties.
Unlike the Leader of the Conservative Party and his party members, who seem to be looking at cryptoassets through rose-coloured glasses, the Bloc Québécois prefers to focus on transparency and responsibility. We are—
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Madam Speaker, the point is that, as he is the leader of Canada's official opposition, there is no doubt that many people would have invested in cryptocurrency based on his recommendation. Those who did make that investment would have suffered a 60% loss or higher. Imagine being a person on a fixed income. Even if people were not on fixed incomes and invested $10,000, they would have lost $6,000-plus of that $10,000.
I am disappointed by the policy enunciations coming from the Conservative Party today. Many would argue that we are looking for policy ideas. The Conservatives are very good at critiquing and opposing everything. We have taken a number of options for Canadians to help them through the inflation issues. Whether it is rental support, or doubling the GST, or dental support or permanent relief on interest for students, these are the types of policy ideas we have come forward with and the Conservative Party has said no to most of them. The only idea the Conservatives have generated to fight inflation is cryptocurrency. They need to take this issue back to the drawing board, and the leader of the official opposition owes Canadians an apology.
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Mr. Speaker, it was not that long ago when the leader of the Conservative Party was out canvassing, trying to generate support. We understand and appreciate he got overwhelming support from the Conservative Party membership.
It was really interesting. There was a number of aspects of the leadership convention that sparked a great deal of public policy debate, but one in particular was the issue of cryptocurrency. That is why I am somewhat surprised that the Conservative Party has legislation that deals with cryptocurrency. Members can recall that not that long ago the leader of the Conservative Party said that one of the best ways to fight inflation in Canada would be to invest in cryptocurrency.
I can recall, vividly, the leader of the Conservative Party making a purchase, suggesting that Canadians get on board, as if we were falling behind, and invest in cryptocurrency, not recognizing the true value of the Canadian dollar. He told Canadians that one of the best ways to fight inflation would be to invest in cryptocurrency.
Imagine those Conservative delegates, and possibly others, who listened to the leader of the Conservative Party and invested in cryptocurrency, many of whom might have been seniors on fixed incomes, using part of their life savings to invest in something that was being recommended by the leader of Canada's official opposition party.
The Deputy Prime Minister and Minister of Finance has talked a great deal about what we have been doing to support Canadians from coast to coast to coast during this difficult time, a time in which we do see inflation. which concerns all of us. While we are trying to make policy decisions to support Canadians, the Leader of the Opposition is still, to this very day, demonstrating a lack of good judgment by not coming forward and saying to Canadians that he made a mistake back then, that it was not appropriate for people to invest in cryptocurrency, let alone hedging it on inflation. We now have a bill that the Conservatives want, in a very real way, to put on the Canadian agenda.
Cryptocurrency is a worldwide currency with which nations around the world have to deal. In Canada, whether it is the national government or provincial governments, we have to deal with it. It was a surprise to hear the endorsement and the degree to which the Conservatives came onside, and the lack of a response to the statements being made just months ago by the leader of the Conservative Party.
It makes me wonder how many Conservative members followed the advice of the Leader of the Conservative Party. I have said in the past that one way to find out would be to pose that question to those members. How many Conservative members have invested in cryptocurrency? I do not see any hands up. I cannot say who is here and who is not here, but I suspect there might have been some—
Some hon. members: Oh, oh!
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The hon. member will have seven minutes to complete his speech.
The time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the Order Paper.
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Madam Speaker, as I stood up, someone heckled, “Explain Bitcoin.” I can tell members that as much as I would like to think that I have a fairly decent understanding of money supply and how that works, when it comes to cryptocurrency, there is a learning curve that is still required on my part to be able to articulate it in the fashion in which members opposite would like to hear.
However, I can tell members that it is something that is of great concern for all Canadians. The impact it is having in society, not only here in Canada but worldwide, is quite significant, and I think there is a keen interest from a number of stakeholders, whether governments, financial institutions, consumers or producers, in regard to what cryptocurrency is, how it continues to evolve and what impact it is going to have on modern-day society.
As has been pointed out by members on all sides of the House, there are probably more questions regarding the whole concept, which I understand has now been around for over a decade in one form or another, than there are actual answers, so I do believe that we need to see more work done on this particular file.
When I went to university, I had a very basic study of some economic policies, which I enjoyed, and one does get an appreciation of what money supply is. When the member opposite was waving a twenty-dollar bill from his seat as a prop or whatever one might want to call it, the cash that we see in our society is a fraction of the money supply. I think that what we have witnessed over the last many years is different forms of currency coming through in order to facilitate the purchasing and selling of product, whether it is a service or a widget. However, we all know, for example, that at one point in time it would have been through the barter system and, quite frankly, there is, to a certain degree, some people who participate in the barter system. I say that, because at the end of the day, much like currency, whether it is the Canadian or U.S. dollar, it is always going to be there in some form or another, and I feel fairly confident of that.
When we hear about cryptocurrency and the manner in which it is expanding, it is quite significant, and I will expand on that point when the debate comes up next.
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Madam Speaker, I want to thank the member for Calgary Nose Hill for the bill that she brought forward to attempt to make Canada a leader in the crypto space, which we kind of already are.
I heard a couple of comments today from speakers about growth. We have to have certainty before we can continue to grow. This is trying to provide certainty to the industry so that people know the rules as they go forward. A couple of years ago, there was a framework specifically around cryptoasset trading platforms. The Canadian securities administrators, with all of their provincial trading commissions, put this together and it set a framework. It is a very public document worked on in collaboration. It established, for exchanges that wanted to be exchanges in this country, a path to that goal. In Ontario, my home province, we have had a number of spot exchange-traded funds in this province, which is significant. The United States does not even have that yet. It only has future exchange-traded funds.
In addition to that, Bitbuy, just in the last quarter of 2021, worked with the OSC IIROC to be a market maker: to be an exchange and a marketplace for cryptoassets to be traded, because this framework was done three years ago. Just as the member for Calgary Nose Hill provides, let us get the experts and the industry to come together so we can get this moving forward. In the United States, people only wish that they had a spot ETF. Let us not get mixed up on the growth. What the member for Calgary Nose Hill is trying to say is let us not get in the way of growth. Let us make sure that industry has certainty so companies will want to come here and invest their billions of dollars.
The market cap of the cryptoassets is $2 trillion. That is in 13 years. The market cap of gold is $10 trillion. Therefore, it is $2 trillion for crypto and it is $10 trillion for gold. How long has gold been around? It has been around since the earth was established. There is $100 trillion in real estate, so there are huge opportunities here. We have to continue to push forward. That is what they want.
I will give an example. Let us look at all the different entities that businesses have to deal with. I made a list. They have to deal with the securities administrations and their provincial administrations, including the OSC and all the ones in all the provinces. IIROC is one they have to deal with. CRA is on the list, for how they are going to be taxed. The entities include the Department of Finance, potentially, the Bank of Canada, potentially, and on and on. When we say that it is the wild west and it is not regulated, that really is not the case, in my opinion. Obviously, people are transferring money into investment accounts, and it is monitored in many different ways including how it is backed, how it is secured and where the assets are held. It is not really the wild west, I would say, and I am sure the chair of the OSC, the executive director and the president would all love to have a comment on that. There is regulation, but we need more certainty because of the investment.
One example is Bitcoin mining, or miners in general, and how they are taxed by the CRA. Where is GST applied? Where is HST applied? When is the actual tax triggered? There is a dispute right now with the CRA as to where and when that occurs. This is what the member for Calgary Nose Hill is talking about. Let us have the framework of industry experts get around the table and say, “Hey, what the heck, are we charging HST every time we mine a Bitcoin?” That does not make any sense. This is not a service business. This is a mining company, just like Kinross Gold or somebody else. That is what we are talking about.
In regard to illicit activity, I am going to say right now that this is the last $20 bill I have. There is more crime done with twenties than will ever be done with cryptocurrency. What I will say is that the amount of crypto crime is decreasing. From 2020 to 2021, it decreased by almost 60%. Why is that? Only a stupid criminal would do a crime with crypto, because it is a public ledger and that wallet has an address.
There was a case where a couple defrauded billions. It was thousands of Bitcoin, and they held onto it for five years. The minute they tried to transfer that money in the fall of 2021, the FBI picked them both up and charged them. Only an idiot criminal, and there are some out there, would do it with this. They are going to go with cash or something else. They are not going to do it with that.
My colleague from Quebec made a comment. We are always getting to know each other, which is great. In Quebec, for example, there are a number of Shakepays. There are Shakepays in Montreal. I am sure some of my colleagues have heard of Shakepay before. Also, there is a Bitcoin mining company. There is about five or six. It is called Bitfarms. There is more than just Bitfarms, but Bitfarms is a $1-billion company traded on a public stock exchange. It went through all the regulatory burden to become publicly traded in la belle province.
I think it would be great if Bitfarms, Shakepay and a number of these Quebec-based companies reached out, did a little government relations, and explained to the government, not in an embarrassing way, but in an informative way, that this is a new industry of 13, 14 years, and explained that CRA income tax issue. That would be great.
To my good colleague from the NDP, who I had the honour of serving with on the industry committee, Bitfarms is 100% renewable energy from Hydro-Québec. It is green. By the way, there is a North American mining council whose mandate is to be a leader in renewable energy. There are great initiatives coming out of this. There are solar initiatives in the southern states, and wind initiatives. Some of the greatest innovation in green energy is actually going to come out of crypto. It is hard to believe, but it is true.
The best and brightest minds. When I was going to university, and that was quite a long time ago, people were learning how to chisel rocks. Now, the best and brightest minds are going into the crypto space. We want the best and brightest to graduate from these great universities and work in Canada. We do not want them to go to Silicon Valley.
In fact, the crypto space is not even in Silicon Valley, it is in Miami and Toronto. That is where we want people to be. The U.S., the UK and the European Union are all working through this process we are proposing here because they see the value in this one-time opportunity to be the world leader in this space. That is what we are trying to do here with this bill.
There is much to talk about. We are having executives from Bitbuy and WonderFi come to speak to us in a couple of weeks. They are going to explain the process they went through to be market-makers in Ontario. They would love to talk to all members of Parliament to explain how the process works and how the regulation works. We are not trying to slow things down.
Business wants certainty. This is how we are going to do it. As well, there is FINTRAC and know your client rules. These are money services businesses. They know what they are doing. They have to go through all these things to do it.
The last thing I will talk about quickly is remittances, as well as Bitcoin, the lightning network and Strike. Twenty-four percent of the GDP in El Salvador is in remittances. That is where somebody in Canada or the U.S. transfers money to a relative. Honduras, Haiti, Jamaica, there are all sorts of them, and they are all over 20%. They go to a money market and they get hosed. I am not against money markets, but I am just saying they get hosed. They can do this with Bitcoin, lightning and on the Strike network. It is that quick, and it costs nothing. That is making a difference.
Two million people in this country are unbanked. This industry is giving people a leg up. We have to make sure that all the technology is in Canada and the innovation is in Canada, so we not only make the lives of Canadians better, but subsequently, give opportunities and livelihoods to people who have never even had a bank account. It has been a real thrill to speak on this.
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Madam Speaker, my thanks go to the member for Calgary Nose Hill for bringing this bill forward. As others have mentioned, I think this is a really important discussion. Whether we would like it or not, whether people want to be boosters of the industry or critics of it, there is no doubt that this industry is growing, that it is significant and that it is beginning to play a significant role in a number of different financial affairs in a number of different ways. I do think it makes sense to begin having conversations about how we can regulate that space in the public interest.
I appreciate some of the points that have been made about what I might call the aesthetic of the bill, the language that was chosen and the way that it speaks about the industry, but I am going to present a little bit of a different view, I think, in saying that I do not think we should let that get in the way of trying to continue the conversation that was started by this bill just today.
I think we have heard some really important concerns. They are not new. We have heard these concerns out and about, so to speak, about cryptocurrency. We have heard concerns about the way in which it can be used to launder money and the way in which criminal organizations appear to be using cryptocurrency to advance their own illegal agendas. We have also heard concerns elsewhere, outside the debate tonight, about the speculative nature of cryptocurrency and the way it acts for some, apparently, in the way that a gambling addiction does: People get addicted to trying to make quick money off cryptocurrency and exhibit a lot of patterns that are similar to folks who have gambling addictions.
I also want to raise an emerging area of concern in respect to cryptocurrency that has to do with the environment: the amount of real-world energy and real-world costs to the cryptocurrency industry for something that may prove to be fundamentally speculative in value. We are hearing of coal plants and gas plants, for instance, in the United States, that had been heading toward decommissioning but have been given new life and are producing new emissions in order to satisfy the needs of these industries. That is all the more reason that it is imperative for legislators to take on this task sooner rather than later. It is not as though this bill is the gateway to launching the cryptocurrency industry. It is here; it is already active; it is growing exponentially; and it is having real effects.
Oftentimes in this place, we are stuck talking about industries that have been carrying on without any form of regulation, as is the case with this particular industry right now. It is operating, and there are no rules. It is the Wild West. We often talk about things that have been around for a long time that have no regulation. It becomes, as time goes on, even more difficult to regulate in the public interest once the die is cast for industries like this. I think of some of the problems we are experiencing now with social media and some of the attempts that have been made even just recently to try to bring some order to the social media universe and to try to mitigate some of the harms that an unregulated social media space can have for democracy, among other things.
All of that is to say that I welcome this bill, even though I may not like all of the language. Certainly I have been reassured by the debate tonight that if this bill were to go to committee, there would be a lot of people around the table who would have the right concerns and would be interested in figuring out how we can regulate this space in the public interest so that Canadians who wish to do so can avail themselves of whatever benefit there is to this industry. It is reassuring even to have a table where we can talk about what the real benefits are, versus just a kind of participation in a game of speculation in which there are winners and there are losers. I think I am not wrong in saying that predominantly a lot of young men in particular seem to like to invest in cryptocurrency. Some of them have done very well for themselves; some of them lost the shirt off their back, and it will be a long time before they recover from their foray into the world of cryptocurrency.
I think it behooves us as legislators to talk about this. Whether the language of the bill is a little more boosterish than I might like is beside the point. I do not think it is fatal to the project. I would welcome the opportunity to get into this more at committee to ask these very questions, to invoke some of the real expertise from outside this chamber and to help us all learn more about it as legislators. It would also create a forum for the Canadian public, who have a lot of questions about cryptocurrency and what exactly it means, and maybe whether they should invest in it or just ignore it because it is a Ponzi scheme.
I think a lot of Canadians are looking for a credible source of information. A committee would provide an opportunity not only for legislators but for Canadians to follow along to hear from not just industry experts, I hope. I would want to hear from people whose business is consumer protection. They could talk about the impacts I was referring to earlier. They might include addictions specialists who are looking at the gambling aspect of cryptocurrency as experienced by some people. I would also want to hear from people who are watching the environmental impacts of the industry and have something to say about how it ought to proceed. That is not all. I see some heads shaking in the Conservative benches, but that is not about saying no to the industry. I know there is a movement afoot that had suggested how changes to coding language could significantly reduce the environmental impact of cryptocurrency.
For me the real point is that these are things we should be talking about, and we should not be talking about them 20 years from now, as is so often the case with legislatures when it comes to new industries and new technologies. This is usually because it is really hard to find agreement in these kinds of places and we tend to be hypersensitive to the connotation of using this kind of language to describe it as opposed to that. I understand that. I am guilty of it myself. I say “guilty”, but I do not think it is a bad thing in certain contexts. In this case, I really do welcome the opportunity to dive further into this. It is why I am prepared to support the bill at second reading, and I believe my colleagues in the NDP are prepared to support the bill at second reading, in order to try to create a forum to get into these matters more.
There is a real public interest in continuing these conversations, and I am quite reassured by the debate tonight. There are a lot of members of Parliament from all sides of the House who are live to the real concerns and real risks of this industry and also appreciate that there may be some positive potential. We may want to get straight on what that positive potential really is. If we find that this is just a speculative enterprise and it does not add any real value, then perhaps we should be skeptical of it. I do not pretend to know that answer at this point. As a member of the finance committee, I would appreciate the opportunity to delve more deeply into it, and supporting the bill for me and for my NDP colleagues is an opportunity to advance that discussion in a forum where we might hope to make some progress on regulating this industry.
I note that the bill calls for the minister to table a framework. We do not have a regulatory framework in the bill and it does not really authorize anyone to make a regulatory framework. It just calls for a minister in the government, whatever the government of the day may happen to be, to table a document that, as is the wont of this place, will lead to more conversation. There will be more opportunities to criticize. If it is too boosterish, there will be opportunities to criticize that. If it is too heavy-handed from a regulatory point of view and certain people feel that this shuts down the positive opportunity of the industry, whatever that may be, there will be an opportunity to provide feedback on that. Doubtless there will be a government bill at some point before the industry is actually regulated in Canada.
I see this as an important first step in establishing the conversation and taking it seriously here on Parliament Hill. That is why I am pleased to provide my support to the bill today, notwithstanding some of the legitimate criticism that we have heard here tonight.
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Madam Speaker, I would like to begin by thanking the member for Calgary Nose Hill for Bill C-249, which is a subject that I find to be most interesting.
The bill is about cryptoassets, cryptocurrencies and virtual currencies. It is truly fascinating because it covers extremely innovative technologies that are being adopted by the more formal economy. We know that cryptoassets and cryptocurrencies are based on transactions authenticated by blockchains. These transactions can take place person to person and on the web, but without any intermediary. It is understandable that those who love technology, especially in the banking world, are fascinated by this and why we can see that there are a certain number of significant risks associated with the development of cryptoassets.
Bill C-249 is basically a bill that promotes cryptocurrencies. One of its main objectives is to ensure the growth of cryptocurrencies. This is one of the fastest-growing sectors, and the market is already doing the work on its own. It is not like Alberta's oil. We do not need public money for it. The industry is self-sustaining.
The bill then talks about the need to lower barriers in a sector to which there are no barriers. This is about regulation. This is an incomplete bill that starts to unravel from the very beginning. The bill then claims we must minimize the administrative burden in a sector where there is virtually no administrative burden.
I do want us to talk about cryptocurrencies. I want us to analyze the sector and consider the state's role and the need for regulation, but this is not a great start. To me, Bill C‑249 sounds like an ad for cryptocurrencies.
This brings me back to yesterday's speech from the Conservative member for Abbotsford. I am bringing this up today because it really stood out to me. Yesterday during the Conservative filibuster, when the member for Abbotsford talked about all the criticisms he made during the prebudget recommendations, I was quite surprised to hear his comment. I was at the Standing Committee on Finance. The committee was discussing the prebudget recommendations and the member for Abbotsford did not make a single recommendation. This year, the Conservatives did not propose a single recommendation. They proposed nothing.
We brought in our witnesses—people from Davie in Quebec City, which still does not have its fair share of federal shipbuilding contracts, our farmers, our community organizations and our businesses, all of whom offered up proposals to stabilize our supply chains—and we made proposals, but the Conservatives had nothing, nothing at all.
Yesterday, the member for Abbotsford said something in connection with Bill C‑249. He said that when parties have pre-budget recommendations—which they did not, of course—they have to set priorities, practise statesmanship and start with what is most important. To me, given the current conditions, the economic recovery, coming to the end of the pandemic and having so much work to do, I am surprised that the Conservatives would use their time in the House to introduce this kind of bill.
Speaking of setting priorities, I decided it was important to get out there and talk to people dealing with the negative repercussions of cryptocurrencies. Such people exist, and I wanted to hear what they had to say. I think it is worthwhile, especially as I also think we need stricter regulations and Bill C‑249 is noticeably lacking.
Consider the Vancouver police, for example. It does not get much more hands-on than those folks. They believe that cryptocurrency ATMs are being used as conduits to move the proceeds of crime. That worries me. The lack of regulations in this area worries me.
As my colleague from Lac-Saint-Jean said earlier, the Toronto police have also indicated that cryptocurrencies in general are problematic. They are known to be a money laundering tool that can facilitate criminal transactions, such as the sale of narcotics and guns, and that is certainly what has materialized.
The member for Calgary Nose Hill was saying that although this is true, any payment method can be used for the same purpose. However, there are varying degrees of ease. Person-to-person transactions without intermediaries and without state regulation make things easier. I am very surprised that Bill C-249, without any hint of a regulatory proposal, comes from the law and order party.
The U.S. Department of Justice has just created a new director position to tackle fraud specifically involving cryptocurrencies. That is in the United States.
In its budget, which was just tabled, Quebec highlights the need to better protect Quebeckers against cyberthreats and expresses the will to combat tax evasion strategies more effectively, which reflects a willingness to do the hard work to ensure that the cryptoasset sector develops in a secure and fair environment for all. That is what the Quebec government is saying, and, in this place, we defend Quebec's interests.
For its part, the IMF, which is attuned to the issue of global monetary and financial stability stated the following:
Crypto assets and associated products and services have grown rapidly in recent years. Furthermore, interlinkages with the regulated financial system are rising. Policymakers struggle to monitor risks from this evolving sector, in which many activities are unregulated. In fact, we think these financial stability risks could soon become systemic in some countries.
Based on what the IMF experts are saying, I feel that they have placed the cart before the horse by introducing a bill that is essentially a tool to promote an industry that is already doing very well.
There is a host of risks for consumers. I like that the title of the bill refers to cryptoassets. We have stopped calling it “cryptocurrency” because it is not really currency and it does not play the same role as currency. It will therefore not replace currency.
Currency is a store of value. Its purpose is to retain value. However, cryptoassets are assets that fluctuate tremendously based on factors such as speculation. This makes the ill-informed investors—if we can call them that—who put their money into them more vulnerable.
Currency is also a unit of account. Until Quebec becomes independent and starts using the Quebec dollar, we will still use the Canadian dollar, which does the job very well. In fact, the value of cryptocurrencies is still assessed against the Canadian dollar. It is also a medium of exchange.
Cryptocurrency also functions as a medium of exchange, but it is a very decentralized medium that can, as I said earlier, facilitate criminal transactions, under-the-table transactions and many others. The fact that it is decentralized makes it all the more important to regulate it. I am worried about that, and so is the Bloc Québécois. We know that we are not the only ones who think that way.
Paul Beaudry, the deputy governor of the Bank of Canada, spoke to us about bitcoin. We know that there are a lot of different cryptoassets and cryptocurrencies, but he told us that Bitcoin was more for speculation than for payment. If we have reached the point where the Bank of Canada is worried about these issues, then perhaps we should be asking the Bank of Canada whether this bill addresses its concerns and meets its expectations. I would venture to say that the bill does not.
I now want to talk about our support for the bill. This bill is at second reading, the stage at which we vote on the principle of the bill. This bill could be improved, and my colleague spoke about that. It could be amended in committee. However, given the need for a framework, for regulations and for consultations with stakeholders, I strongly believe that we would end up having to rewrite the entire bill by making the amendments we would be comfortable with.
The bill would be rewritten so much that I do not think the amendments we would want would even be in order as part of the committee's study of this bill. We therefore think that it might not be a constructive use of parliamentarians' time to send this bill to be studied in committee. For these reasons, the Bloc Québécois will very likely not be able to support the principle of this bill.
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Madam Speaker, I am thankful for the opportunity to speak today on this important private member's bill. I want to thank my colleague across the aisle, the member for Calgary Nose Hill, for bringing the bill to the House of Commons.
How Canadians use money and make payments is changing, thanks to the emergence of new digital technology. Bill C-249 seeks to understand the benefits of cryptocurrencies and these new technologies. I commend the member opposite for inspiring discussion on this emerging economic sector. This is an important debate to be had.
I first want to highlight the benefits that cryptocurrency has on Canada's economic growth and the future of money in our country.
Billions of dollars of wealth has been created in the cryptocurrency space. Companies are getting on board. Walmart, Reebok and IBM have implemented crypto and blockchain solutions to maintain the transparency and integrity of their supply chains. Internationally, cryptocurrency is a useful tool. After the illegal invasion of Ukraine by Russia, the Ukrainian government pivoted to accept donations of cryptocurrency to fund its military defence and humanitarian aid. They raised over $100 million in support.
Even residents in my riding use cryptocurrency for personal investment opportunities, and I am sure the same can be said for constituents in ridings across our country. It is a popular and growing investment. There are undeniable benefits to cryptocurrency, and the hype to invest is certainly growing. However, the sector does remain under-regulated.
Governments around the world have their work cut out for them to craft legislation and regulate this new technology. Bills like Bill C-249 make important contributions to the debate on how to regulate cryptocurrency. However, I am concerned that it is narrow in scope. While it certainly highlights the benefits of cryptocurrency, I am concerned that it does not necessarily address the risks involved in the cryptoasset sector. Specifically, it does not address the potential vulnerability and financial instability inherent within the cryptoasset industry. These risks, vulnerabilities and instabilities need to be accounted for as we move forward.
As we transition into a digital world, governments must ensure that cryptoassets have proper oversight. Things like cybersecurity provisions must be established for these sectors. Simply, as cryptocurrencies rise in popularity, Canada needs the proper regulatory infrastructure in place to guide, shape and inevitably regulate the growth. Without these safeguards, we put the safety and security of Canadians at risk.
Of utmost concern to me is that we cannot overlook the dark elements that can be a consequence of the unregulated growth of cryptoassets. Around the world, people in the black market are trying to legitimize their wealth by venturing into the crypto space. This illegal and unregulated activity has posed unintended, or perhaps intended, consequences to economies and democracies around the world.
Over the last month, we have seen the Russian oligarchs use cryptoassets to circumvent western economic sanctions and enable the illegal invasion of Ukraine. This allows Russian oligarchs to preserve their wealth amidst the Russian economic crash. It is undermining the international community's economic sanctions and, most importantly, it is enabling the perpetuation of the atrocities that Russia has been committing against Ukraine.
Closer to home, there is also evidence of the use of cryptoassets in illegal activity as well. Just last month, cryptocurrency was identified as enabling the illegal occupations and blockades here in Ottawa, Windsor and Coutts. Digital currencies allowed protesters to receive global donations without any obstruction or regulation. The freedom convoy's own cryptotoken was designed in such a way as to make it difficult for our law enforcement to connect the individual donors to the actual funds, and this is an evolving problem.
Without proper regulation, the presence of cryptocurrency and its illegal activities will continue. Digital currencies undoubtedly appeal to people looking to evade the scrutiny of law enforcement. They are decentralized, which makes it difficult for government to know what is happening. To this point, I reference Matthew Burgoyne, a leading Canadian digital currency lawyer. He stated that, when faced with scrutiny, “crypto can simply be transferred to another wallet address...and it can continue to be transferred in an effort to obscure the original source, or in an effort to remove the funds as much as possible from the wallet that was frozen.”
As digital currency moves from wallet to wallet, it gets harder to track by law enforcement. Without proper regulation at the federal, provincial and territorial levels, cryptocurrency could become a vehicle for abusive transactions, facilitating money laundering, terrorist financing, criminal activity and tax evasion. Transactions involving cryptoassets are also vulnerable to fraud. There is currently inadequate investor and consumer protection for these activities.
The safety and security of Canadians' financial activities are of course always of central concern to our government. Therefore, as we move forward and we craft policy and cryptocurrency legislation, our legislation must ensure that we adequately address these risks. It cannot simply focus on promoting unbridled growth of the cryptoasset. I fear that this is what we would do with the current version of Bill C-249. Our policies must also clearly delineate the shared jurisdictions of this file. Under our constitutional conventions, the federal government must consult with the provinces and their securities regulators on possible regulations to cryptocurrencies. Currently, I do not believe that this bill would do that.
In addition, international institutions and partners also play a key role in our policymaking. Cryptoassets are a transnational asset. Regulating them requires co-operation among countries. We should ensure that international experts from other jurisdictions are included in our policy-making as we move forward.
We must understand the risks of digital currencies just as much as we understand and promote the benefits of them. Cryptocurrencies have numerous benefits locally, federally and internationally. There is no doubt of that. However, without thorough regulations being implemented, these benefits may be outweighed by the risks. There are real conversations that need to be had as citizens, as members of Parliament and as governments, on what the future of money is going to look like. Those conversations must happen sooner rather than later as more and more Canadians invest in cryptocurrency.
Although I do not believe that in its current state this bill adequately addresses those risks, I thank the member for Calgary Nose Hill for bringing this important discussion forward and being open to how it evolves as it moves through the House.
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Madam Speaker, I would answer my colleague's question in the context of my Bloc colleague's question. The industry itself is not inherently bad or good. It is what we as a country choose to make of it. Any province, including the province of Quebec, would have huge investment opportunities chased away if we overly politicize this. I hope that does not happen.
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Madam Speaker, I thank the member for Calgary Nose Hill for putting the bill forward in such a non-partisan manner.
There is a huge opportunity for Canada. We just need to look at what happened with Ethereum. Ethereum was largely developed in Canada, but has moved to Switzerland. Why? It is because countries like Switzerland and Japan have clearly laid out national rules that explain what kind of development, what kinds of tokens, what kind of crypto, what kinds of applications can fuel the blockchain industry, particularly when we look at the opportunities of Web 3.0.
I have spoken with people in this space, innovators who simply want to be able to get a bank account so they can start. Unfortunately, there are many misconceptions with regard to the industry. I was hoping that the member might be able to point out some of the challenges Canadian innovators have had and continue to have.
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Madam Speaker, that is an odd question. Regular currency can be used to conduct illegal activities as well. The challenge that the Toronto police outlined in that example is that the framework that might be used to detect or prevent that in this emerging space is something that is worthy of discussion and the federal government, as I have outlined in this bill, likely has a convening role in that regard.
What I worry about is that the industry itself is becoming polarized, as per that question. I would like to see the industry not be labelled bad or good, but that we talk about how we put a policy framework in place that both encourages growth and also safeguards those who are working in the space and those who are consumers.
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