Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

The scope of financial entities that are being roped into the government's Emergencies Act measures to choke off funding to blockade participants extends well beyond the banks and crowdfunding platforms that Deputy Prime Minister Chrystia Freeland focused on in her announcement Monday.

In detailed Emergencies Act regulations published late Tuesday in the Canada Gazette, the government listed more than a dozen financial entities that are being told they "must determine on a continuing basis whether they are in possession or control of property that is owned, held or controlled by or on behalf" of anyone who is participating in prohibited actions under the Act.

Included in that list of financial entities are those who "engage in the business of dealing in securities or to provide portfolio management or investment counselling services."

"I think this caught everyone off guard last night," said Greg Taylor, chief investment officer of Purpose Investments, in an interview Wednesday.

"Across Bay Street and across the financial industry in Canada, I think everyone is looking through these rules and really trying to figure out what it means to them and what they need to do to make sure that they are onside. Certainly this is a surprise."

Taylor added that it's unclear if the Emergencies Act requirements go above and beyond anti-money laundering rules and terrorist financing rules that are already in place for the asset management industry.

Under the regulations, the entities are being directed to inform the Royal Canadian Mounted Police or the Canadian Security Intelligence Service "without delay" if they have exposure to assets that are believed to be intended for use by protesters participating in the blockades and other activities covered by the Act.

Lorne Steinberg, president of Montreal-based Lorne Steinberg Wealth Management, which has more than $700 million in assets under management, said the new measures won’t be onerous for his industry, particularly since anti-money laundering rules are already in place to monitor for “suspicious” activity.

“We know our clients pretty well. We only send money to the client’s bank account. … The banks are more in the crosshairs of all this,” he said. He added that for him, the news is “honestly no big deal.”

The emergency measures also spell out that financial entities tasked with sniffing out funding will be provided with immunity from any potential civil litigation as a result of their actions under the Act.

Representatives from the Investment Industry Association of Canada and the Portfolio Management Association of Canada were not immediately available for comment Wednesday.