Sanctioning Dissent
Part 1: Will Canada’s new ‘Framework for Consumer-Driven Banking’ bring the feds one step closer to being able to use ‘financial tools’ to suppress political resistance?
“WTF is going on, Canada? Why can’t we do this?” said Andrew Dale, an executive with the business-focused financial company Float. Dale was quoted in a recent article by CBC business reporter Anis Heydari and he was referring to the changes the government plans to make to banking, announced in the recent federal budget. For Dale, “open banking” is taking the feds too long to implement compared to other countries like Australia, which have done it much faster.
In another CBC piece on the recent budget, reporter Catharine Tunney summarized what “open banking” will mean for Canadians in two sentences: consumers will have easier access to their financial data “across multiple institutions, apps, and services,” and it will involve new legislation and “taps the Financial Consumer Agency of Canada to oversee and enforce the system.”
The Globe and Mail had a similar take: don’t worry, it’s all good. The “explainer” by Abigale Subdhan and Jacob Dube, either quotes directly from the government statement or re-words it, always maintaining the government’s positive spin. Even though the article at one point provides the subheading “What are the pros and cons of open banking,” the reporting is mostly positive, interviewing advocates only, with no mention of the most worrying aspect of the announcement.
While this new way of banking is being sold to us as a tool of convenience, for our benefit—with language like “open” and “consumer-driven”—it’s mostly good for the financial and technology industries (fintechs) as it will result in an “explosion of innovation.” Issues around security, fraud and data privacy for the consumer seem to be an afterthought.
My spidey sense is telling me there is something more that we should be paying attention to.
Some background on the 2024 Budget announcement
Two pages of the 430-page 2024 federal budget titled, “Fairness for Every Generation,” are devoted to announcing that the government will be implementing “consumer-driven banking,” or “open banking,” which it describes as “a way for people and businesses to securely transfer their financial data to different service providers, including banks, credit unions, and accredited fintechs.” From the budget document:
The potential of consumer-driven banking includes new apps and tools to help Canadians better keep track of bills, track a budget, collect and compare information to allow for better decisions when exchanging currencies or investing in the stock market, secure a loan, find a better deal on insurance, or track monthly rent payments to build up credit scores.
The document goes on to explain how before any of these “new financial tools” can be put in place, there needs to be a “framework”—legislation to establish Canada’s Framework for Consumer-Driven Banking. The government says it plans to do this in two steps, one piece of legislation will be introduced this spring and another in the fall.
While the budget is pretty short on details about how “open banking” will actually play out on the ground, one of it’s features will be that it can be used to establish and build a “credit score.” The budget reads (the italics are mine):
Through consumer-driving banking, people without established credit, such as young people and new Canadians, could build their credit scores through services that use transactional data or other payment data, rather than being limited to traditional ways to build credit history, which is not equally available to every generation. Tools that enable Canadians to use confirmation of timely rental payments to build a credit score are an example.
Using Tiktok to appeal to young renters, Prime Minister Trudeau explained this new way of building up a credit score.
But, does this mean, conversely, that if you’re late on your rental payments it will lower your credit score? And what other non-traditional measures will the government come up with to boost or, yes, take away from someone’s credit score?
It seems to be very murky territory to me.
There is also a whole section in the government “explainer” that the CBC and The Globe and Mail didn’t feel it was necessary to report to Canadians [italics are mine]:
To protect the integrity and security of the Consumer-Driven Banking Framework and maintain Canadians’ confidence in the financial sector, the Framework will include safeguards and provide authorities to the Minister of Finance that align with existing financial sector statutes, such as the Retail Payment Activities Act, the Bank Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. These authorities will enable the Minister to refuse, suspend, or revoke access to the Framework for national security-related reasons.
I reached out to the Department of Finance to find out what this actually means and how it might affect individuals, like you and me. I also wanted to know if these would be new powers for the minister, and whether being cut-off from “access to the Framework” could potentially look anything like what happened to some of the protesters when the government invoked the Emergencies Act a couple of years ago.
According to Caroline Thériault:
The Consumer-Driven Banking Framework is unrelated to the invocation of the Emergencies Act on February 15, 2022… [the] framework will provide an interface for consumers, who choose to opt-in, to securely and freely share their financial data with accredited financial service providers of their choice. This will eliminate the need for screen-scraping –an unsecure practice currently used by many banking services and apps. This will enhance the security of Canadians and of our financial system.
Theriault also provided this clarification – “participants” are the financial providers and other companies that would enrol in Canada’s Consumer-Driven Banking Framework, whereas “consumers” include individuals and small businesses (italics are mine).
To become a participant in the Framework most entities will be subject to accreditation requirements, except for federally regulated banks, provincially regulated credit unions, and provincial crown corporations that act as banks. All participants, regardless of their requirement to seek accreditation, will need to certify and maintain compliance with security (including national security) and technical requirements to access the framework. If an entity’s access is revoked, this means that the Financial Consumer Agency of Canada, including for reasons related to national security determined by the Minister of Finance, would take away their accreditation or certification, as applicable, and they would no longer be able to offer consumer-driven banking services to consumers, or access consumer data through the framework. This would apply only to entities and not to consumers participating in the Framework.
For reasons related to national security determined by the Minister of Finance.
Does this mean that if the minister of finance decides someone is a national security threat they will be able to force “participants” to comply with national security requirements which might involve cutting off/ freezing the assets of that “consumer” – that is, the individual or small business that is deemed to be a “threat”?
It’s not entirely clear without seeing the system function, but open banking—the digital integration of the financial system—will likely also facilitate the adoption of digital ID and a central bank digital currency (CBDC) – both of which Canada is on course to implement—and can increase the government’s visibility of a consumer’s financial transactions.
I’ve touched on the worrying aspects of this digital transformation in a 3-part series titled Remote Control but suffice it to say here that governments can and already do use digital systems to monitor and augment political and social control, under the guise of “convenience” and “inclusion.”
As previously reported, data systems, including the surveillance that often comes with them, discriminate and further disadvantage those who are already marginalized or socially excluded. According to Linnet Taylor, who heads up Global Data Justice, data systems “amplify inequality: for richer citizens it’s a way to ease one’s passage through the world… for poorer citizens… it’s a way of formalizing precarity.”
As Taylor points out, people often “resign themselves” to the roll out of these new data systems rather than “engage with them politically.” But she says the problem is these systems will not automatically be socially or economically just, or respect an individual’s autonomy. As we’ve seen elsewhere, they won’t automatically respect democratic principles either.1
At this juncture, it’s worth being reminded of the emergency economic measures that took hold after the Emergencies Act was invoked.
Screen grab from drone video taken of the big rigs converging on Wellington Street in Ottawa as part of the “Freedom Convoy” on January 28, 2022. The invocation of the Emergencies Act allowed for the use of “financial tools” against organizers without due process or proper notice.
“Financial tools” and the invocation of the Emergencies Act
You will recall that on February 14, 2022 the federal government declared a public order emergency and invoked the Emergencies Act in response to a blockade that began in late January when a “freedom convoy,” that included a number of big rigs, converged on Ottawa’s downtown core in opposition to the federal government’s requirement that Canadian truck drivers crossing the US border be fully vaccinated to avoid testing and quarantine requirements. The government was also responding to the border blockades at the Ambassador Bridge between Windsor and Detroit, at Coutts, Alberta, and at Emerson, Manitoba—blockades that the government claimed were having an impact on trade and the economy. Demonstrations erupted spontaneously across the country, including here in Halifax, where protesters expressed frustration and anger about ongoing public health measures, including lock-downs, mandatory masking, school closures, and provincial vaccine policies that prohibit the unvaccinated from accessing non-essential services.
As part of invoking the Emergencies Act, the government also issued the Emergency Economic Measures Order, which allowed law enforcement agencies to work with financial service providers in Canada to “monitor and disrupt financial activity” associated with what the government kept referring to as “illegal blockades,” though this characterization is highly debatable. 2
The Order allowed law enforcement to share the identity of so-called designated persons participating in the protests with financial service providers, and allowed for the “temporary cessation of financial services,” including all bank accounts, credit cards, investment assets, and insurance policies of vehicles used in the blockades.3
Canada’s deputy prime minister and finance minister, Chrystia Freeland announced at the time that by invoking the Act, the government was “broadening the scope of Canada’s anti-money laundering and terrorist financing rules as part of its effort to end the blockades so that they cover crowd-funding platforms and the payment service providers they use”—what Freeland later described as “the lacuna.” 4
It was an authority the government felt that the Department of Finance’s financial intelligence unit—FINTRAC—should have, but taking the legislative path to obtain that authority would take too long.
Three days later, Freeland, flanked by the ministers of public safety and emergency preparedness, followed up with reporters on Parliament Hill on the new financial tools she had at her disposal:
Since Monday’s announcement I’ve spoken directly with the heads of our major banks and with the director of FINTRAC… our absolute priority is ending these illegal blockades and occupation. It gives me no pleasure to impose any of these measures. In fact, we do with great sorrow. But do not doubt our determination to act to defend our democracy, to defend our economy, and to restore peace, order and good government. So, let me repeat what I said on Monday: if your truck is being used in these protests, your corporate accounts will be frozen, the insurance on your vehicle will be suspended, the consequences are real and they will bite. It is time for you to go home…
We now have the tools to follow the money, we can see what is happening, and what is being planned in real time, and we are absolutely determined that this must end, now and for good.
Freeland also told reporters that the government would “introduce legislation to provide these authorities to FINTRAC on a permanent basis.”
So, despite the revocation of the public order emergency, some of the authorities that were only made possible by invoking the Emergencies Act, soon became permanent in law—a subject we’ll return to.
Deputy Prime Minister and Finance Minister Chrystia Freeland (right) testifying at the Public Order Emergencies Commission (POEC), November 24, 2022. Freeland is being cross-examined by Canadian Civil Liberties Association lawyer Ewa Krajewska.
As previously reported here, here, here, and here, when the Emergencies Act was invoked, the Canadian Civil Liberties Association (CCLA) questioned the legality and constitutionality of doing so, and argued that the Ottawa and border blockades did not meet the extremely high threshold laid out in the Act. The CCLA took the federal government to court over the matter and in January of this year, the Federal Court of Canada agreed with the CCLA and concluded that the government’s decision was unreasonable and not justified on the facts of law and that the regulations violated the Charter right to freedom of expression and the right to security against unreasonable search and seizure. The government is appealing the decision.
One of the key aspects of the emergency orders that the CCLA took significant issue with was the use of “financial tools,” or the freezing of the financial accounts of “designated persons,” stating they were “too broad.”
According to the CCLA, by February 23, 2022, when the declaration of emergency was revoked, the RCMP had disclosed that de-banking or freezing involved a total of 57 “entities” (and 257 financial products, including personal and corporate accounts and credit cards) to financial institutions, including individuals and owners or drivers of vehicles involved in the blockades, and 170 Bitcoin wallet addresses to virtual asset service providers.
“As a result of accounts being frozen, money that families use to buy groceries, pay their rent, and pay child support was cut off. Notwithstanding the government’s intentions, the impact of freezing the accounts spread beyond those participating in the blockades,” say the CCLA.
For instance, in his testimony, one of the convoy organizers, Tom Marazzo, who lost his job at Georgian College because he was unvaccinated, told the CCLAs Ewa Krajewska in the Public Order Emergencies Commission (POEC) hearings that when his accounts were frozen, his family “luckily had cash in the house” to cover the costs of his son’s heart medication for myocarditis. All of Marazzo’s accounts were affected, including his joint accounts, affecting individuals that were not involved themselves in the protest. He also said he was never notified by his bank that his accounts and cards would be frozen.
Similar stories were told by other protest organizers.
The emergency orders that came into force allowed for the freezing of personal assets with no notice or due process. The orders ultimately relied on law enforcement and financial institutions to use their discretion and engage in selective enforcement to avoid the worst consequences of their over-breadth, according to the CCLA in their final submission to the POEC.
On May 2nd a draft of Bill C-69 the Budget Implementation Act, passed First Reading in the House of Commons. The bill includes The Consumer-Driven Banking Act, but the regulations are not yet out for review.
I reached out to Anaïs Bussières McNicoll, the current CCLA Director of Fundamental Freedoms, for a comment on the latest budget announcement about “open banking” and “consumer-driven banking,” in light of what took place in early 2022. McNicoll said the CCLA is monitoring the issue closely and will be assessing it more fully once they’ve had a chance to review the bill and its associated regulations.
Tom Marazzo, former Georgian College instructor who lost his job because he was unvaccinated, speaks at a press conference during the Ottawa protests in February, 2022.
Incremental legislative amendments, one budget at a time
Looking back at the federal budgets since 2019 (there wasn’t one produced in 2020 because of the pandemic) it’s clear that with each new budget, legislative amendments giving new authorities have been announced that strengthen and extend the reach of Canada’s anti-money laundering/ anti-terrorist financing regime.
The 2019 budget noted a “rapidly changing and evolving world,” where “risks to our democracy as a result of disinformation campaigns” mean that “we must be vigilant in upholding the rule of law, and detecting, assessing and responding to the things that challenge our security and threaten our values.”
The budget notes that Canada’s democratic institutions “have increasingly come under threat from foreign influence and disinformation campaigns, fuelled by new technology and the rise of social media. This has created new avenues for malicious actors to interfere with the democratic process, as evidenced by numerous attempts to influence election outcomes around the world, including in well-established Western democracies.”
The government pledged nearly $20 million over four years to the Department of Canadian Heritage to launch the Digital Democracy Project, which would develop policy on online disinformation in the Canadian context.
While it’s unclear which “well-established Western democracies” or which elections are being referred to in the budget document, it’s probably safe to say it might be pointing to Russia’s alleged meddling in the 2016 United States election. The fact that this so- called interference was shown to be lacking evidence and was actually fabricated, points to a very significant problem with government’s labelling something disinformation—governments with the help of the corporate media can be pretty good purveyors of it themselves.5
The 2021 budget also announced further domestic security measures.
The Emergencies Economic Measures Order—part of the Emergencies Act—required crowdfunding platforms to register with FINTRAC “if they were in possession or control of property that is owned, held or controlled by or on behalf of a designated person under the Regulations,” but these obligations were understood to be temporary, and were revoked once the Emergencies Act was.
But as previously stated, Freeland promised at the time that there would be legislative amendments that would make the obligations of payment service providers and crowd funding platforms to monitor and report suspicious activity that “may involve attempted money laundering or terrorist financing,” permanent.
This is exactly what happened just a few weeks later. In the 2022 federal budget Freeland announced the amendments and crowdfunding platforms and services are now required to to register as money services businesses with FINTRAC.
The 2022 budget document also starts to broaden the scope of what represents a security threat. It reads:
“The rules-based international order is built upon a shared commitment to democracy and the rule of law. However, those values are being challenged by hostile forces, including state actors like Russia, criminal organizations, and the wilful purveyors of disinformation that threaten public institutions.”6
In the 2023 federal budget more legislative changes were announced, this time to the Criminal Code and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which gave law enforcement the ability to freeze and seize virtual assets with suspected links to crime; and establish powers to FINTRAC to disseminate strategic analysis related to the financing of threats to the safety of Canada.7
As previously stated, the 2024 Budget Implementation Act contains the Consumer-Driven Banking Act, which was just tabled in the House of Commons and passed first reading. The related regulations have not yet gone out for review.
As we know, the devil is always in the details.
[Stay tuned for Part 2 of this series where we’ll explore further how banishment from the financial system is being used to punish dissent.]
In her book, The Age of Surveillance Capitalism, Shoshana Zuboff tries to reassure her readers when she says that China’s social credit system is set against a backdrop that is very different from that of the west. China has a long history of being saturated with surveillance, profiling, and government censorship, she says. But despite these differences, we should be paying attention to it, because there are warning signs that it’s happening in our society as well.
While Chinese users are assigned a character score, the US government urges the tech companies to train their algorithms for a “radicalism” score; while China’s “cyber-sensors” can suspend internet or social media accounts if their users send messages containing “sensitive terms” such as “Tibetan independence,” or “Tiananmen Square,” the US government is engaged in content moderation on big tech platforms; while China’s system can block a citizen from accessing credit cards if their score is too low, Facebook has filed a patent to conduct “mining and analysis of social media data for credit scores,” she writes.
The Public Order Emergency Commission’s “Roundtable Discussion: Fundamental Rights and Freedoms at Stake in Public Protests and Their Limits,” can be found here.
As it turned out, insurance policies never ended up being cancelled because, according to the CCLA, the RCMP “exercised its discretion not to provide information to insurance companies due in part to timing, and concerns that if an individual’s insurance was cancelled it would be difficult for them to safely leave the blockade.”
In Vincent Bevin’s 2020 book The Jakarta Method: Washington’s Anti-Communist Crusade and the Mass Murder Program that Shaped the Word,” Bevin lays out how “black operations”—essentially disinformation campaigns—led mainly by the US through its Central Intelligence Agency (CIA) and the UK through its “intelligence” service MI6, were used to seize control in countries such as Guatemala and Indonesia in the 1960s. Bevin says that the corporate media has always been captured but with the advent of social media and the internet, there’s been a rise in independent/ civilian/ citizen journalism and as a result there is an increased need to control the message.
Furthermore, according to author, constitutional lawyer, and journalist Glenn Greenwald, while attention is being placed on “Trump boomers on Facebook, or Q-ANON sites, or teenagers on 4-Chan,” the most “aggressive, frequent, and most toxic purveyors of disinformation”… “are the corporate media outlets in conjunction with their partners in the intelligence community.”(System Update, Dec. 16, 2021) Stories that Greenwald and others would categorize as official disinformation include “Russiagate,” which falsely accused Russia of influencing the US election, the suppression of the Biden laptop story, which was originally blamed on Russian disinformation, the Havana syndrome, which was originally blamed on Russian military intelligence, and the US denial of involvement in the sabotage of the Nord Stream 2 pipeline, also blamed on the Russians.
Excellent, comprehensive article, Linda. The “Framework “ has a very Orwellian/Huxleian vibe. Or Eggers’ “Circle”. The right to civil disobedience is on its deathbed.
Thanks so much for doing this deep dive. This is information that every Canadian should have. We need to get rid of these WEF bozos.