Budget 2023: Canada adds an interference office

OTTAWA-

Prime Minister Justin Trudeau’s Liberal government plans to launch a national office against foreign interference, amid a scrutiny of allegations of interference by Beijing in the recent federal election.

Tuesday’s federal budget earmarked $56 million over five years for measures to combat foreign interference, threats and covert activity.

The Gendarmerie is expected to receive most of this money before April 2026 to support efforts to investigate threats and work proactively with diaspora communities at risk of being targeted by foreign interference.

The budget document indicates that the new office will be created within the Ministry of Public Security, but it does not include a timetable for its launch.

The measures come as former Governor General David Johnston assumes his role as special rapporteur, with a mandate to determine whether Trudeau should convene the public inquiry demanded by the three main opposition parties.

The Liberals are also proposing legislative changes that would task a federal banking watchdog with determining whether large financial institutions “have adequate policies and procedures to protect against threats to their integrity and security, including protection against ‘foreign interference’.

The Office of the Superintendent of Financial Institutions would also have the power to take control of a bank “when national security risks exist”.

Ottawa also plans to strengthen its money laundering regime and counter-terrorist financing policies through a series of proposed changes.

The changes would follow an internal assessment that found weaknesses in the way departments share information, few ongoing lawsuits and gaps in how the rules apply to lawyers.

The proposed legislative changes would enact protections for whistleblowers and crack down on people who circumvent reporting requirements using a series of small transactions.

Ottawa would also require banks to report assets held by sanctioned individuals, strengthening existing rules that generally only require such reports for customers suspected of terrorist financing and money laundering.

The budget says the Liberals plan to have a federal beneficial ownership registry in place by the end of this year, having recently introduced legislation to that effect, the terms of which will be made public by the fall.

The Liberal government also says it aims to educate the public this fall on whether Fintrac should be tasked with cracking down on sanctions busting.

In another measure related to terrorist financing, the budget allocates $16 million over the next two years to implement a bill to allow humanitarian groups to work in Afghanistan.

Currently, aid workers cannot operate in this country without paying taxes to the government and therefore run the risk of being prosecuted for financially supporting the Taliban.

The bill proposes a regulatory program for issuing exemption permits. Officials said the funding would be needed to assess permit applications and probe the risk of exemptions benefiting terrorist groups.

This report from The Canadian Press was first published on March 28, 2023.