Canadian Federal Court Rejects Trudeau’s Use of Emergencies Act in Freezing Crypto

On January 23, the Federal Court of Canada rendered a decision that marked a significant legal milestone: it declared Prime Minister Justin Trudeau’s use of the Emergencies Act to freeze cryptocurrency linked to the demonstrations over the 2022 truck convoy to be an unjustified violation of civil rights.

Under the direction of Federal Court Justice Richard Mosley, the court expressly objected to the freezing of bank accounts and cryptocurrency holdings for protestors. Justice Mosley underlined that using the Emergencies Act as a tool for convenience should not be the government’s first choice, stating, “The evidence is clear that the majority of the provinces were able to deal with the situation using other federal law.”

Limits to Government Authority

Justice Mosley underlined that using the Emergencies Act must be justified by need rather than convenience, even if he acknowledged that the government needs effective instruments. He emphasized that the problem had been effectively handled by other federal law remedies, such as those included in the Criminal Code, negating the need to invoke the Emergencies Act.

Protests broke out in 2022 in reaction to Canada’s stringent COVID-19 standards. The National Emergency Act gave the government extraordinary power to circumvent financial procedures in order to address perceived obstacles faced by protestors. This eliminated the requirement for a court order in order to access and freeze bank accounts.

People who were part in the demonstrations resorted to cryptocurrency in retaliation. Financial institutions were instructed by regulatory agencies, such as the Ontario Provincial Police and the Royal Canadian Mounted Police, to stop dealing with 34 cryptocurrency wallets linked to protest financing.

The court’s decision has cast doubt on the future of individuals impacted by the Emergencies Act, especially in light of their potential to sue the government for damages. The legal drama regarding the deployment of the Emergencies Act during the 2022 demonstrations has continued with the government’s announcement that it plans to appeal the ruling.