The threat of foreign interference in Canada’s politics and banks is the target of new spending in Budget 2023 along with plans to give the country’s financial watchdog more powers to tackle emerging risks.
The dollar figures in Budget 2023 are relatively small – $48.9 million in cash for the Royal Canadian Mounted Police over three years to protect diaspora groups from intimidation and harassment, and $13.5 million over five years for Public Safety Canada to establish a “National Counter-Foreign Interference Office.
But the modest dollar figures are a nod to what has become a major political issue for Prime Minister Justin Trudeau’s government, after months of reporting on alleged foreign interference – particularly from the Chinese government – in Canadian domestic affairs.
“Authoritarian regimes, such as Russia, China and Iran, believe they can act with impunity and meddle in the affairs of democracies – and democracies must act to defend ourselves,” the budget document, tabled by Deputy Prime Minister Chrystia Freeland on Tuesday, read.
“No one in Canada should ever be threatened by foreign actors, and Canadian businesses and Canada’s public institutions must be free of foreign interference.”
According to the budget documents, the RCMP funding is being earmarked to boost the force’s ability to investigate foreign interference, and to “proactively engage” with diaspora communities at greater risk of being targeted by foreign powers.
“Foreign interference” can include a broad range of activities – including outright intimidation, aiding candidates perceived to be sympathetic to foreign powers, or pushing narratives through friendly media outlets.
But after months of reporting from Global News and the Globe and Mail, more attention is being paid to the impact of foreign interference on Canadian politics and on diaspora communities in Canada – which national security observers suggest are the primary targets of attempts of intimidation and harassment by foreign powers.
The budget document specifically references “hostile proxies intimidating diaspora communities in Canada because of their beliefs and values.” But it also makes mention of the theft of Canadian research and the “infiltration” of “public and research institutions” – an issue that has been increasingly the focus of the Canadian Security Intelligence Service (CSIS) in recent years.
The Trudeau government has asked former governor general David Johnston to review intelligence and the government’s actions on the foreign interference file, with the goal of determining whether or not the issue warrants a full-scale public inquiry.
The move came after months of Global News’ reporting on alleged foreign interference schemes by Beijing. Before appointing Johnston, Trudeau pointed out that the government created a special panel of senior public servants to review foreign interference activities before the 2019 election.
While the government has acknowledged ongoing foreign interference in Canada, that panel did not determine the activity threatened the integrity of the 2019 and 2021 elections.
Conservative Leader Pierre Poilievre, whose party supports a public inquiry, accused Trudeau of being “aware the dictatorship in Beijing” was interfering in Canadian elections and “did nothing.”
“It’s not just more money, we need a prime minister who protects our democracy,” Poilievre told reporters.
Poilievre went on to reference Davos, Switzerland – the location of the World Economic Forum’s (WEF) annual conference – before saying nobody outside Canada’s borders should control domestic policy. The WEF is a common target for conspiracy theorists, including the false claim the organization is secretly taking over governments.
While talk about foreign interference in recent months has focused on Canada’s elections, the budget makes it clear the government also views risks to Canada’s banking sector.
The budget suggests the government will “expand the mandate” of the Office of the Superintendent of Financial Institutions (OSFI) to make sure financial institutions have policies to protect against security threats, “including protection against foreign interference.”
A federal official speaking to reporters at the budget lock-up explained OSFI already takes into consideration security issues, but that the government wanted to emphasize that national security – and foreign interference – is explicitly part of the watchdog’s mandate.
“Budgets are policy documents, they send strong signals to markets, to stakeholders and market participants about (governments’) direction,” said Sahir Khan, executive vice president at the Institute of Fiscal Studies and Democracy.
“(The Liberals) are signaling vigilance, that they’re going to be more proactive. And they’re telling financial institutions that they will be more active and proactive in the supervision … to ensure the security of our financial system.”
The budget document also proposes increasing information sharing between OSFI and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), as well as between those two organizations and the minister of finance.
“Canadians must be confident that federally regulated financial institutions and their owners act with integrity, and that Canada’s financial institutions are protected, including from foreign interference.
While the rest of Budget 2023 is largely silent on funding for Canada’s national security agencies, it does include $60 million for CSIS update their information technology systems.
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